What CHROs Can Use From Private Equity Due Diligence

Below is a concentrated, C-suite-ready set of lenses drawn from the PE diligence playbook. Think of these as the critical “pressure points” PE firms press on. Any executive can use these same pressure points to:

• Review their own business for blind spots and growth levers.
  
  
• Evaluate a company they’re considering acquiring.
  
  
• Assess a potential employer before accepting a C-level role.
  
  

This is the material inside your research that maps directly to those practical purposes.

1. Financial Reality Check

Purpose for C-suite: Confirm whether the business model is durable, cash generating, and clean enough to scale.

When to use: Quarterly business reviews, pre-acquisition assessments, executive job due diligence.

Key PE Questions You Should Use

• Are earnings real and repeatable, or boosted by one-time events?
  
  
• Does profit actually convert to cash, or is working capital hiding issues?
  
  
• Is customer concentration putting the business at risk?
  
  
• Are accounting practices conservative, normal, or aggressive?
  
  
• Are margins stable, falling, or artificially inflated?
  
  Use this to understand whether you’re stepping into a solid company or one with hidden cracks.
  
  

2. Market and Competitive Position

Purpose for C-suite: Know whether the strategy sits in a “good neighborhood” and whether the company can actually win.

When to use: Strategic planning, entering new markets, evaluating an employer’s future.

Key PE Questions You Should Use

• Is the market expanding, flat, or shrinking?
  
  
• What big forces could reshape demand (tech, regulation, customer behavior)?
  
  
• Does the company have real differentiation customers care about?
  
  
• How strong is its competitive moat?
  
  
• What’s the total growth runway (TAM)?
  
  Use this lens to avoid joining or acquiring a company in a dying market, or one with no defensible edge.
  
  

3. Go-to-Market and Revenue Engine

Purpose for C-suite: Determine whether the business can reliably generate and scale revenue.

When to use: Sales audits, pre-acquisition vetting, assessing whether a new employer has a growth engine or just a hope.

Key PE Questions You Should Use

• Is there a real sales process or just heroics?
  
  
• Is pipeline forecasting accurate or wishful?
  
  
• Can marketing generate scalable demand beyond founder relationships?
  
  
• Are pricing practices disciplined or random?
  
  
• Are the economics of each customer segment actually profitable?
  
  
• Does the company grow existing accounts, or churn through clients?
  
  Use this to spot whether the company’s future is believable, or dependent on a few individuals.
  
  

4. Operational Strength and Scalability

Purpose for C-suite: Understand whether operations can support growth without breaking.

When to use: Business reviews, acquisition due diligence, evaluating whether a company is prepared for scale.

Key PE Questions You Should Use

• Are operations delivering at or above industry benchmarks?
  
  
• Is there room to scale with current assets or will you hit capacity ceilings fast?
  
  
• Is there deferred maintenance or hidden capital expenditure risk?
  
  
• Is IT infrastructure modern and secure enough to grow?
  
  
• Are quality, reliability, and supply chain stable?
  
  Use this to understand whether growth will be smooth or painful.
  
  

5. Legal, Contract, and Compliance Health

Purpose for C-suite: Avoid stepping into legal landmines, contract traps, or regulatory exposure.

When to use: Considering a C-suite role, M&A evaluation, risk reviews.

Key PE Questions You Should Use

• Are there any change-of-control clauses that could kill revenue?
  
  
• Are major contracts assignable, renewable, and enforceable?
  
  
• Is the company in good regulatory standing?
  
  
• Is there pending litigation that could hit future cash?
  
  
• Does the company actually own its IP and data?
  
  Use this to spot hidden risks that often aren’t visible until you dig.
  
  

6. Management, Talent, and Culture

Purpose for C-suite: Know whether the leadership bench and workforce can execute the next stage of growth.

When to use: Executive team audits, hiring decisions, personal job diligence.

Key PE Questions You Should Use

• Is the leadership team capable of the next level of growth?
  
  
• Are there glaring skill or role gaps?
  
  
• Is the org over-dependent on a few “indispensable” people?
  
  
• Is turnover healthy or signaling deeper issues?
  
  
• Will key people stay post-acquisition or post-leadership transition?
  
  Use this to predict whether the team will accelerate or drag the company.
  
  

7. Value Creation and “Fixability”

Purpose for C-suite: See the business the way PE investors see it - as a system with levers that can be pulled.

When to use: Prioritizing strategy, evaluating whether a company can be turned around or scaled.

Key PE Questions You Should Use

• What improvements could quickly change trajectory?
  
  
• What are the biggest bottlenecks in revenue, operations, tech, or talent?
  
  
• What should happen in the first 100 days to create momentum?
  
  
• Which issues are fixable, and which are structural?
  
  This helps leaders focus on the levers that matter most.
  
  

8. The Executive Job Candidate Lens

If you’re evaluating whether to join a company, use these PE-style questions:

“Should I join this business?”

Ask:

• Is the market strong enough to support the next 3 to 5 years of growth?
  
  
• Is there a real revenue engine or will I have to build one from scratch?
  
  
• Are the financials healthy or hiding red flags?
  
  
• Will operations break under growth?
  
  
• Is leadership aligned or fractured?
  
  
• Are there legal or regulatory clouds?
  
  If the answers don’t add up, the role may be more risk than opportunity.
  
  

9. The Acquisition Lens for C-suite Leaders

When you’re part of an M&A diligence team, use this guide to cover all angles:

• Can this deal actually create value or are we buying a problem?
  
  
• Where are the hidden risks?
  
  
• Where are the quickest wins?
  
  
• What must be fixed immediately post-close?
  
  
• What assumptions in the model need to be stress-tested?
  
  This helps you anticipate integration challenges and set realistic expectations.
  
  

10. The Executive Business Review Lens

Use PE questions in your regular business reviews to keep yourself honest:

• Are results real?
  
  
• Are we in a good market?
  
  
• Is our GTM engine predictable?
  
  
• Can operations support growth?
  
  
• Are we protected legally?
  
  
• Do we have the right leaders and enough talent?
  
  This creates the same discipline PE investors demand from their portfolio companies.
  
  

If you’re a CHRO who’s ready to meet the most amazing group of peers, consider www dot CHRO Partners dot com 

Post:

Most executives only use private equity thinking when a deal is on the table. That’s a mistake.

PE firms have a simple way of spotting whether a business is healthy, scalable, or hiding problems… and every C-suite leader should be using the same lens.

I pulled together a short guide on how to think like a PE investor when you’re:

• Reviewing your own company
  
  
• Evaluating a potential acquisition
  
  
• Deciding whether to take a C-level role
  
  

If you want a clearer picture of the business you’re stepping into, this will help.

Read it here.