That’s right, this subject many people consider fluffy adds value to the capital value of your business. Don’t believe me? Then try this. What is the share or sale value of your organisation today? Now add up the material assets of the organisation. Consider the value of any longer term contracts and proprietary systems to the organisation value. If the organisation value is more than this then you have the intangible value of your organisation. That intangible value can be attributed to the value of your brand and of your organisational culture. Effective leadership brings value to the tangible and intangible components. Superior leadership will separate your organisation from the others when it comes to the value of the intangibles. Leadership is therefore essential to maintaining and increasing the value of your organisation.
Let’s take this a step further. Your organisation’s value will be further increased if it develops a “leadership brand”. Consider the change in the share price of companies’ as senior executives leave or are engaged. The proof of this to me is the efforts our Public Relations specialists put into managing these events because they know they have to optimise the impact on the share price. While our Public Relations professionals can do exemplary work, they can only create the desired impression for a limited period of time unless there is substance to the leadership calibre and depth of the organisation. An effective leadership brand therefore will:
- Add to company value (i.e. share price)
- Differentiates your leaders in the market
- Create value in the eyes of investors, employees and customers
Here is my definition of Leadership:
“The creation and maintenance of confidence and trust within the followers to effectively pursue a shared vision that delivers ongoing value to the organisation’s stakeholders.”
Or put more simply,
“A good leader is someone people trust to follow.”
To position leadership as such a critical contributor to company value, makes it strategically straightforward that the ongoing acquisition and development of effective leadership capability is essential. The management of the leadership capability of your organisation deserves the same (or perhaps more) attention as the relevance and quality of, your products, systems, physical assets, reputation and investor relations.
I hope, in this short space, I have provided enough thought and evidence to convince or reaffirm in you, the importance of leadership and its development. In future blogs I will discuss some of the strategic approaches to leadership development.
Let me leave you with this question:
“How much is your leadership adding to the value of your organisation?”