Your portfolio company has missed plan twice. The board is discussing a new CEO, and as the operating partner, you're being asked whether to support the change.
You know the CEO's forecast and how they explain the miss. You may know much less about the decisions, handoffs and resource constraints behind it.
Before recommending replacement, I'd ask what a new CEO would actually change, and why the current one can't.
A leadership change can be necessary. It can also consume time without removing the obstacle. If the next person inherits the same unfunded commitments and unresolved decisions, you haven't finished the job by filling the seat.
I would diagnose the operating system before settling the talent verdict. But system-first doesn't mean the CEO gets a pass. Building and changing that system may be the work you hired them to do.
Name the miss against the investment case
Start with the three to five changes carrying the value creation plan, not a general judgment that the team lacks urgency. Perhaps the deal depends on raising realized prices, expanding into enterprise accounts or reducing delivery costs. For each move, write the result expected by now, what actually happened and the operating evidence behind the difference.
Then test the plan itself. Did customers reject the offer? Did the economics change? Did the investment case leave out work the business needed? A leader can execute a flawed thesis diligently.
Keep external causes separate from internal constraints. A market contraction or the loss of a major customer's budget may explain part of the shortfall. A chair who knows the customers and the business can make a sound case for backing the CEO through that disruption. That support still needs a credible response from management; it isn't a promise that the original plan will recover.
Also separate the event from the response. The CEO may not control the shock. You can assess how early they surfaced it, what options they brought and what they changed.
Find the constraint, and who can change it
Choose the missed move that matters most to the investment case. Trace recent work behind it with the people responsible, using actual decisions and records rather than the board deck alone. Check who can approve the necessary tradeoffs, whether functions pass usable information to each other, whether the data can support the call and what the incentives reward.
Suppose the growth thesis requires enterprise sales, but deals keep failing technical validation. The CRO may need better qualification. Product may lack a required capability. Or the sponsor may have underwritten the revenue while declining to fund the engineering work it depends on. Those explanations call for different remedies.
Ask what the executive has already done about the obstacle. Did they identify it, propose a workable tradeoff and escalate it to someone with authority? Or did they leave it unresolved and keep forecasting the same result? A constraint outside someone's authority and a constraint they won't confront are different evidence about their performance.
Put the sponsor's commitments in the review too. If the investment case assumed help from a pricing specialist or an operating team, was that help actually available? Promised portfolio support is not delivered capacity.
Share the specific gaps with management and let them challenge the diagnosis. They may reveal a real constraint you missed. Agree what they will change and what requires a sponsor or board decision. Keep individual assessments confidential; openness about the work doesn't require circulating personnel judgments.
Test a repair without taking over
If the evidence is mixed and the company has room to learn, agree a bounded operating change with the incumbent. In the enterprise-sales example, that might mean tightening qualification and allocating capacity to the specific technical gap, with a clear owner for each. Decide what you should see before revenue arrives, such as qualified opportunities completing technical validation, and when a commercial result should follow. Compare like opportunities where possible rather than celebrating one convenient win.
Look at both the work and the executive's contribution. Did the leader make the difficult allocation, secure cooperation and follow through? A plan they present confidently is not the same as capability they've demonstrated.
The operating partner can bring expertise and remove a sponsor-side obstacle. Be explicit about where that help ends. If your team quietly takes over the executive's job, improved results tell you less about whether the executive can run the business after you leave.
Don't treat the repair as a controlled experiment. Several things may change at once, and results can lag. Improvement doesn't establish that the leader was blameless; continued underperformance doesn't isolate the leader as the cause.
This is a proposed decision practice, not a validated test of executive ability or a promise of better returns.
Give the review a deadline
The check needs a clock. Set the decision date when you open the review, based on cash, customer exposure and how quickly useful evidence can arrive. A long expected hold doesn't make delay free. A short one doesn't make a rushed replacement wise.
Where evidence already shows that the executive can't or won't make the required changes, system repair and replacement can proceed together. Serious integrity or safety concerns need prompt handling through the appropriate process, not a diagnostic grace period.
For an acquisition or a new appointment, a roughly 100-day checkpoint can help organize early operating commitments. It isn't a universal deadline for proving that a leader can scale. A long sales cycle may not produce revenue by then, but you should still know whether agreed decisions and milestones happened. Establish expectations at the start, while leaving room to revise assumptions with management.
During the review, use a short weekly check on work that can move weekly. Reuse reliable operating data and automate routine reporting where useful. Don't commission another reporting burden to prove that people are busy.
At the decision date, an extension needs a reason: what new evidence will arrive, by when, and why is it worth the cost of waiting?
Decide who can do the next job
The board's choice may be to back the incumbent with specific support, add a missing capability, change responsibilities or appoint a different leader. If the thesis no longer holds, revising it belongs in the same discussion. Replacing the CEO is not a substitute for admitting that the investment plan needs to change.
Compare realistic alternatives. What can the incumbent deliver with agreed support? What would an available successor bring, how long would the transition take, and which constraints would remain? Don't compare the executive you know with an imaginary candidate who has every strength and no dependencies.
A change can be justified even when the current CEO didn't cause the miss. The company may now need a turnaround leader, an integration leader or a different commercial capability. The question is fitness for the work ahead, not whether you can make one person responsible for every disappointing number.
If replacement is the answer, carry the diagnosis into the search brief: the outcomes, the repairs the new leader must lead, and the authority and support you will provide. Before approving the appointment, ask one final question: which obstacle will this person be better equipped to remove, and which decision still belongs to us?
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