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At this year’s PEI Human Capital Conference in New York, one theme came through loud and clear: expectations for leadership teams in software and SaaS are evolving faster than ever.
From how investors assess AI capability to how they think about succession planning in a longer hold environment, the conversation has shifted from theory to execution. What follows are the key takeaways I heard consistently across investors, and what they mean for building leadership teams today.
Executives Without AI Literacy Are Already Behind
It’s no surprise that AI dominated the discussion. But what has changed is the level of specificity investors now expect.
The question is no longer “Is this leader thinking about AI?” It is “How are they using it, and what impact is it driving?”
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Across the C-suite, expectations are becoming more tangible and function-specific:
- Sales leaders are expected to demonstrate how AI is improving territory design, pipeline generation, and conversion.
- Finance leaders are leveraging it to enhance forecasting, scenario planning, and FP&A efficiency.
- Operators across the business are being evaluated on how AI is driving productivity at the team level.
As a result, we are seeing a clear evolution in how talent is assessed. Scorecards are being rewritten to include AI literacy, not as a standalone skill but as an embedded capability within each function.
Recent data reinforces this shift. Bain & Company reports that nearly half of executives say a lack of in-house AI expertise is slowing adoption, underscoring how quickly AI literacy is becoming a core leadership requirement.
Investors want real examples. Not ideas or frameworks, but execution.
Where has this leader implemented AI?
What changed as a result?
How did it improve outcomes?
At the same time, there is an acknowledgment that this is a moving target. What “good” looks like today will look different in six months.
That is why the most valued leaders right now are not necessarily the ones with all the answers. They are the ones leaning in, experimenting, and learning in real time.
For a deeper look at how AI is reshaping executive hiring across software and SaaS, including what investors are prioritizing and how leading companies are building AI-ready teams, download our latest AI talent report.
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The Talent Market Is Tight and Getting More Specialized
Despite broader macro uncertainty, the market for top leadership talent remains highly competitive.
What is changing is how that talent is found and evaluated.
We are seeing a clear shift away from generalist approaches. The firms that are winning today are those with deep specialization, people who not only understand the role but are deeply connected to the talent ecosystem around it.
Knowing where to find talent is no longer enough. Being trusted by that talent is what makes the difference.
At the same time, searches themselves are becoming more complex. Traditional profiles do not always map cleanly to what businesses need next, which is forcing investors and operators to rethink how they define the ideal candidate.
This is where creativity in scorecard design matters. Broadening the aperture, while still maintaining a high bar, requires a nuanced understanding of both the market and the role.
If You Don’t Have a Bench, You Have a Risk
Another theme that came up repeatedly is that succession planning is moving higher on the priority list.
Investors are increasingly focused on what sits beneath the executive leadership team. Not just who is leading today, but who is ready to lead next.
High-potential programs are becoming more common, with sponsors taking a more active role in ensuring there is a strong pipeline of future leaders inside the business.
Even with this increased focus, gaps remain. Gartner reports that only a minority of organizations feel confident in their ability to effectively fill senior leadership roles internally, reinforcing how critical it is to proactively build a strong bench.
The rationale is straightforward.
The companies that scale most effectively are the ones that do not have to start from scratch every time a leadership gap emerges.
Instead, they have already built a bench.
Longer Hold Periods Are Rewriting the Talent Playbook
With hold periods extending, many companies are now operating beyond the original talent assumptions made at the time of investment.
That raises an important question.
Is the current leadership team built for the next phase of growth?
In some cases, the answer is yes, with the right support. In others, it requires a change in leadership.
Increasingly, investors are looking for ways to augment rather than replace.
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Bringing in proven, at-scale talent beneath the executive layer can:
- Support continued growth
- Reduce execution risk
- Create a natural succession path over time
This approach allows companies to evolve their leadership structure without disrupting momentum and positions them more effectively for exit.
The Bottom Line
Across all of these themes, one idea stands out. Expectations for leadership are becoming more dynamic, more specific, and more tied to execution.
AI capability, functional depth, network-driven talent access, and proactive succession planning are no longer differentiators. They are quickly becoming the baseline.
For investors and operators alike, the challenge is keeping pace with that shift.
For leaders, the message is clear. The bar is not just rising. It is moving.
If you are planning to hire for your portfolio companies or expand your leadership team, now is the time to map the market.
Connect with our team to start the conversation before timing becomes a constraint.
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