I recently read an article in Inc. magazine that laid out a perfectly logical way to evaluate not only yourself as a leader but also your company as a whole. The article attempts to go beyond company financial reports as an accurate measure of success to try and quantify leadership qualities such as innovation and charisma.
David Ulrich, a University of Michigan business professor and co-founder of leadership consultancy The RBL Group, and his colleague Allan Freed, say financial reports only reflect a small part of a company’s success. The pair writes in Harvard Business Review that investors are attributing more weight to a company’s leadership than they have before when evaluating a business.
The duo’s research has revealed that some investors believe that financial reports only show 50 percent of a company’s value. But without an established benchmark to measure leadership, it’s difficult to assess how much value a specific leader adds. To access the remaining 50 percent of a company’s value, Ulrich and Freed created a “leadership capital index.”
The Individual Leadership Index determines how the leader performs in certain areas including Personal Proficiency, Strategist, Executor, Managing People and Leadership Differentiator. The Organizational Index tackles Culture Capability, Talent Management, Performance Accountability, Information and Work Practices.
If you’ve been reading my blog or are familiar with The Alternative Board, these topics probably resonate with you. They did with me. These are exactly the type of pillars we work with when providing mentorship and guidance through The Alternative Board-Denver West.
This is just one way to start thinking about either your leadership or the leadership of your management team and how it affects the health of your company. If you would like to take the next steps in evaluating your company’s leadership, contact me.
By Blair Koch
