What Does An Operating Partner Do?

My updated POV on the weirdest job I’ve ever loved

This week, I gave a speech for the Private Equity Association of Chicago on value creation in PE. I started that speech by reading the audience an essay I wrote a few years back. Here it is — updated to include my perspective on what it takes to do the operating partner job well, and how to apply those lessons to your work.

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What Is It That You Do Here?

Working at Bain & Co. came with some great perks.

One of those was the summer offsite.

We all looked forward to it: For the break from making slides. For the chance to celebrate promotions and business school acceptances.

But mostly, for the videos.

After a big group dinner, several hundred Bainies would shuffle into a room at the Grand Geneva convention center, swarm the open bar, arrange themselves around a projector screen, and await the creative offerings of our teammates. The content was surprisingly well-produced, even if it was stuffed with the nerdiest of inside jokes that only a consultant could love.

An example: One year, I wrote and co-starred in a short titled “Slow Jam The Data Request,” a spoof on an old Jimmy Fallon bit where we combined a backing track of extremely cheesy 90’s R&B with an overly performative ask for an employee headcount file. I fully expect the video to surface at an amusing but inopportune moment later in my career. (For that and other reasons, a run for public office is probably off the table at this point. I’m fine with that.)

But my favorite Bain offsite video used a far simpler concept.

Using a creative twist “Kids Say the Darndest Things”, a dozen Bainies recorded cellphone videos asking their parents a simple question:

“What do you think I do at work?”

As you might expect, the responses were both endearing and hilarious.

My own mother was a big hit as she shared her take on what her strategy consultant son did for a living - and I quote:

“I think you… help companies make more money…even though you don’t really work for those companies…is that right?”

My Mom got a big laugh but… she also sort of nailed it?

In one very uncertain line, she captured the core function of my job and the inherent nebulousness of it.

When I left Bain to join ParkerGale Capital a few years later, I touched on that nebulousness in my goodbye email. Here’s some of what I wrote:

“We are lucky. We solve interesting problems for some of the most successful businesses on the planet. And we do it surrounded and supported by exceptionally smart, nice, fun people.

Is this sort of a weird job? Sure it is. Coherently explaining what we do for a living can be challenging. Does it come with moments of fatigue, frustration, and (sometimes) real pain? Absolutely.

But it’s worth it.”

I meant that. All of it.

The part about the role being occasionally painful. The part about my career being difficult to describe.

But mostly, the part about the uniquely satisfying payoff from this strange variant of a job well done.

Now, more than seven years later, I have a very different job but very similar feelings. I’m an operating partner for a small PE fund. We buy software companies and help them get a little closer to what consultant-Paul would have called “full-potential”: The type of company employees love working for and the kind of company other investors take notice of.

Readers reach out almost every week now with questions about this operating partner job. And when I catch up with people curious enough to ask, I often tell them that this is “the weirdest job I’ve ever loved.”

Why do I say that? What is the job really?

What does a PE Operating Partner actually get paid to do?

The way I see it, and the reason it’s both so weird and so great, is that it’s not just one job. It’s four jobs.

Here’s what they are:

Job 1: Be the Keeper of the Standard

Operating Partners need to have a strong POV on “what good looks like” within their area of the company. You need to be good at noticing and pattern-matching what the best teams do differently. You need to build the conviction that “If we do X, that will probably lead to Y”, where Y is some measure of performance that increases the value of the company.

You need to create what NFL coach Bill Walsh called “a standard of performance.” You also need to hone the ability to detect if that standard is being met. The hard part here is building that standard and those playbooks and those templates with a mix of both belief and humility.

You need a strong belief that doing things this way will build a better business, but you also need the humility to recognize that translating said standard into the unique handwriting of each business is not only a necessary part of the job, it might be the most important part of the job.

Every company is different, and every company needs different things from you to apply your playbook effectively and to make it stick.

It’s that “last mile” work (tweaking your approach, reinforcing it in the right ways, and making it stick) where the real value is. Knowing what to do isn’t worth a damn thing if you can’t find a way to make it happen.

It’s also on you to keep the standard updated over time. Folding in the earned secrets picked up along the way keeps your standard fresh, credible, and tailor-made to your flavor of investment.

It’s also just good product management. If you’re not talking to customers (the executives actually using your playbooks, approach, and examples) and making adjustments based on what you learn, you’re almost certainly missing something.

Job 2: Create Agreements That Improve the Business

Yes, you need to have a standard and means to diagnose problems inside your companies. I wouldn’t be very good at my job if I couldn’t spot issues within sales, marketing, or leadership team dynamics.

And while operational playbooks and “how-to” guides are great, nothing actually happens without buy-in from the management team and the people that work for them.

Good PE ops people are a weird kind of strategic diplomat— adept at both spotting the gaps and getting people on the same page about how to fill them.

I’m constantly looking for the impactful, controllable, measurable things that need fixing. But I also have to keep a sort of awareness for which of those things can be fixed. For which things people are ready to fix.

That’s the hard part of this gig, and the thing that my Mom nailed in her wise-but-funny summary: Yes, it’s my job to help our companies make more money. But help is defined in the mind of the recipient.

If I can’t get our management team to agree that something’s off-track or that addressing it will lead to us becoming a bigger, better business, I can’t hope to make a difference.

A diagnosis isn’t worth much if you can’t convince someone to take their medicine.

Job 3: Help Keep Score

You can’t know if you’re winning or losing if you can’t see the scoreboard. People who are good at this job are good at building simple, consistent reporting. They can measure things in a way that cuts through the chatter and makes it obvious when you’re off-track.

Funny enough, getting this reporting thing right is a sneaky way to build the #1 predictor of a high-performing team: A trait called psychological safety. When you have psychological safety, you operate in an environment where it’s easy to fix the broken stuff, because it’s easy to talk about the broken stuff: The employee who isn’t performing, the product that’s clearly missing something, or a strategy that isn’t playing out the way you hoped.

Why does good reporting help with this? A simple, objective scoreboard makes it obvious to spot what’s on-track vs. off-track. But more importantly, it creates a natural on-ramp to talk about what’s on-track vs. off-track. As I like to say, you can’t fix a secret.

When you nail your reporting, there are no secrets.

Only visible, solvable problems.

Job 4: Create a Demanding + Supportive Environment

PE gets a bad name for raising the bar on people without giving them the resources they need to meet it. If you’re going to ask a company to do things it’s never done before, you better be there to teach, coach, and pitch in, especially when things get hard.

How do you do this well? You need to strike the right balance between asking for more and lending a hand. I think about this balance as a sort of invisible ledger. When I ask people to give a bit more, I know I’ll have to engineer a give of some sort  (e.g.,  training, content, support, or just some simple encouragement )  to keep things in balance.

But building a winning culture also means being opportunistic. It means recognizing when there’s a wave to ride and encouraging people to drop in and ride it. Every once in a while, a big opportunity comes along that (a) promises to meaningfully move the needle and (b) almost everyone actually wants to learn more about.

That opportunity right now? It’s AI. And I think everyone’s AI strategy needs to start by teaching their people to use it, giving them the space they need to practice, and encouraging them to share what works—not just inside their own business, but across the portfolio.

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Final Thoughts

I shared this essay with my audience of PE associates knowing full well that literally none of them work in PE Ops. At the end of my speech, I asked them:

How many of you are operating partners or even part of the operations team?

Zero hands went up. (Just as I hoped.)

Then I asked a hypothetical:

So why did I even read that to you? How does that apply to you?

Here’s what I told them:

Operating team, deal team, CEO, management team… it doesn’t matter.

It’s everyone’s job to make the business better.

And at any given moment, your company needs you doing at least one of those four jobs:

1. Writing things down, building the playbook, and creating and reinforcing the standards that will help you win

2. Being a strategic diplomat—engineering conviction and agreement among and between people about what needs to happen next

3. Helping to keep score, and creating simple, effective reporting that makes it obvious if we’re winning or losing

4. Creating a team, environment, and culture where people feel challenged but supported

And here’s the good news. Everyone has natural strengths that line up against one of those jobs.

I left the audience this week with three questions to consider.

And if you’re reading this, I’d like you to consider them too.

1. Which of those four jobs, using your natural strengths, are you already armed to do?

2. Who inside the business needs that kind of help the most?

3. What would taking the very first step look like?

Answer those questions, and you’ll be onto something.

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Want to learn more about what an Operating Partner actually does in the first year of a new investment?

Check out my episode of the PE FunCast: “You Just Bought a Company… Now What?” on YouTube at the link below, and subscribe to the PE FunCast on Substack for a whole lot more from me and the team at ParkerGale.