Riviera Partners recently released The Future of Tech Leadership, its latest trends report that sheds light on the swiftly changing executive hiring landscape. The findings of this year’s report underscore significant shifts in leadership requirements, the increased focus on artificial intelligence (AI), and how companies are maneuvering through economic uncertainties. But what do these insights mean for public equity-backed businesses?
In this article, Ned Lanphier, Partner in Riviera Partners’ Private Equity Practice, shares his perspectives on these trends and the implications for hiring and leadership in 2025 and beyond.
The report highlights AI’s growing role in tech investments, with 75% of companies making it a top priority. Are new roles being created to meet these demands, or are companies taking a different approach to integrating AI?
Ned: Private equity firms are mindful of AI, but it is already an established component in most of their businesses. Within the private equity environment, there aren’t many entirely new roles emerging specifically for AI. Instead, operating partners and advisors from private equity firms are implementing portfolio-wide strategies and policies, and they offer support to help execute them.
What are the key leadership qualities and technical backgrounds PE-backed firms are looking for as AI becomes more central to their strategy?
Ned: PE-backed companies want leaders with a broad technical background and a proven track-record in budget-constrained environments. PE firms are often focused on improving margins, so they value leaders who can achieve technical goals within these financial constraints rather than simply spending to accomplish objectives.
When it comes to AI specifically, they often seek leaders with an educated perspective on when and when not to implement it, as well as the cost benefits of doing so. That expertise is frequently more important to portfolio companies than having a dedicated AI architect or a single role focused solely on AI. The priority is on ensuring that new leaders understand how to implement AI cost-effectively.
With economic pressures affecting hiring, the report notes that companies are being more deliberate, especially with technical roles like engineering and product. What changes have you observed in how PE-backed firms are approaching these roles?
Ned: I wouldn’t necessarily say “more deliberate.” Instead, they’re broadening the scope of roles, adding additional areas of ownership to each position so they can achieve similar outcomes with fewer hires.
The report suggests that companies are showing more preference to “pragmatic” CEOs, rather than, say, high-profile visionaries. How has demand for hands-on executives evolved in the PE space?
Ned: As private equity firms continue to strategically approach hiring in order to improve cost efficiency, they’re prioritizing a more hands-on approach, which is now a factor in all of our scorecards. For PE-backed companies, the days of having a strategic leader who is more of a “thought leader” than an actual implementation leader are gone. They’re looking for executives who are deeply involved in executing business strategies, who take ownership, and who are willing to tie more of their compensation to performance.
How do the expectations for CEOs in PE-backed companies differ from those in larger, more established enterprises?
Ned: PE-backed CEOs are expected to execute on the investment in a three-to-four-year timeframe.
Remote and hybrid work remain popular, with top talent often preferring remote roles. How are PE-backed companies managing the balance between asking for an in-office presence and attracting high-level talent that often prefers the remote work option?
Ned: There’s a movement towards bringing more talent into the office or at least into a hybrid setting. However, PE firms are more concerned with securing top-tier talent, so they would rather have an “A” talent in a “B” location than a “B” talent in an “A” location. Generally, we find that executives located within a two-hour direct flight can still be successful in these roles, but we are seeing more of our clients’ requesting executives relocate.
That said, every investment is different, depending on the existing team’s setup and whether there is a central hub or multiple locations. Overall, the preference is for high-caliber talent regardless of their exact location.
PE-backed companies often face intense pressure to cut costs and boost efficiency. How is this shaping the types of leadership roles they’re filling, especially technical roles like CTOs and VPs of Engineering?
Ned: PE firms generally seek leaders with a proven track record of success. This can be someone who has held a VP role in a larger business, provided that their previous responsibilities align with what they would be managing in this next investment. However, the core technical aspects of these roles haven’t significantly changed in recent years.
Are you seeing any trends in how PE-backed companies are structuring their C-suites to meet both operational and innovation goals?
Ned: In 2020 and 2021, private equity investments often split product and engineering into separate roles. During the economic pressures of 2022 and 2023, fewer companies bifurcated these roles, but we’re now seeing a shift back, as private equity firms recognize the efficiency and accountability that comes from having both a product leader and a engineering leader.
The report indicates that, overall, leaders agree that companies are consolidating middle management roles and putting more on the plates of others. Is the same shift happening in PE portfolio companies?
Ned: PE firms will always invest where there is a need and a clear correlation to ROI. That said, many PE-backed companies have thinned out their mid-tier ranks, expecting their leaders to be actively involved in every component of the investment.
The report mentions that top talent is increasingly open to new opportunities, with compensation, leadership quality, and company trajectory as the main factors. Do you see these priorities changing for candidates interested in PE-backed roles?
Ned: Compensation is often more important for early-career professionals, while seasoned executives with confidence in their ability to impact an investment tend to focus on scope of ownership, investment trajectory, alignment with the PE firm, and the projected exit multiples. These candidates are more likely to accept lower cash compensation in exchange for a potential outsized equity payout.
While CTOs currently lead most AI initiatives, newer roles like Chief Data Officer or Chief AI Officer are still uncommon. Do you expect to see more of these roles in the next 12-24 months, particularly in PE-backed companies?
Ned: Depending on the scale of the investment, a Chief Data Officer or Head of Data is likely to become more common over time. This role is especially useful in companies formed through M&A, with multiple data sources, aiming to drive cost efficiencies through better data management. These roles are cross-functional, impacting pricing, packaging, bundling, road mapping, and more. In some cases, the Chief Data Officer might report to a CFO or a Chief Product Officer rather than a CTO.
We expect data roles to grow in importance, though the title of Chief Data Officer might only be seen in businesses of a certain scale where it adds significant value.
When a company is considering adding a role like Chief Data Officer, how do they decide whether to create a new position or expand the responsibilities of an existing leader, like the CTO?
Ned: It largely depends on the scale and complexity of the investment. In some cases, adding a Head of Data, Data Analytics, or Data Engineering has become popular. This role may not always report within the engineering org, as there are multiple functional areas it could support. However, capturing, linking, and analyzing data is increasingly vital for almost all of the businesses we work with.
Connect with Ned Lanphier on LinkedIn
Explore more Future of Tech Leadership insights
- 5 Takeaways from the Future of Tech Leadership Report (and What Execs Should Do Next)
- Future of Tech Leadership report homepage
About Riviera Partners
Riviera Partners is a global driver of innovation for today’s most influential companies – expertly placing executive talent in the crucial areas of IT, software engineering, product management, security, AI/ML/Data, and design. Riviera combines over two decades of recruiting expertise with a proprietary platform that uses machine learning to score and predict the best candidate for a company’s specific needs, driving successful outcomes. As a result, the company has become the go-to talent partner for leading private equity investors, venture capitalists, public companies and technology innovators.
