Assume you don't have the full picture

A CEO friend of mine was told by his private equity partner to focus on acquisitions. So he hired a head of M&A, built a pipeline, and spent six months sourcing deals. Then he brought a great deal to the board for approval.

The partner said no. And the CEO was told that all M&A activity would be on pause until further notice.

The CEO came to me angry and confused. He was upset that the partner had changed his mind without an explanation. He was embarrassed in front of his team. And he felt his time and job were disrespected.

Much later, after a rocky period between the CEO and the partner, the CEO found out the real reason. Two other companies in the fund had gone sideways, so the investment committee pulled back risk across the entire portfolio. The PE partner was simply complying with a direct order.

This type of thing happens all the time. The partner makes a decision that, to the CEO, makes no sense. And the relationship starts to fracture.

This is the point where most CEOs do the wrong thing. They take it personally. They push back aggressively, or quietly check out. They lose trust.

The best ones do something else. They learn to see the world from the partner's perspective.

A PE partner has a full career that you don't see. Fund cycles matter: a fund in year three has more patience and money, where a fund in year eight needs exits. Promises matter: a partner is held accountable to the deal thesis they had approved, so some requests are simply keeping a commitment. Fund dynamics matter: if other investments in the fund are struggling, the successes may get more scrutiny and less room for risk. And individual careers matter: a junior partner with something to prove behaves differently than a senior one who is secure in their position.

The skill is to see every request through the PE partner's lens. Understand fund cycles. Watch the other deals the firm is doing, and learn the pattern of their strategy. Know what your deal thesis promised. Track how the rest of the portfolio is doing. Pay attention to interpersonal dynamics. And listen to every request assuming you don't have the full picture.

Of course, this does not mean blind compliance. When a CEO thinks the direction is wrong, he should say so. If the disagreement is critical, put it in writing. But if he is overruled, he has to execute. The owner has final call.

There will always be a gap between a CEO and his board. The partner has obligations and constraints that aren't yours to know. But you can do your best to understand them, learn from them, and accept them.

There will never be perfect alignment. But identifying the gaps, and narrowing them, is the job of the CEO. And it starts with empathy.