Leadership Capital Index : Realizing the Market Value of Leadership

When it comes to evaluating a firm, leadership matters.

We know that financial outcomes can predict about 50 percent of a firm’s market value. Intangibles like strategy, brand, talent, R&D, innovation, risk, and so on account for the rest. But leadership underlies them all. And despite how important we know it is, we’ve been forced to rely on subjective and unreliable ways to measure its impact—until now.

In this landmark book, leadership scholar, author, and consultant Dave Ulrich proposes a “leadership capital index”—a Moody’s or Standard and Poor’s rating for leadership. Drawing on research from investors and business leaders, and synthesizing the work of dozens of consulting firms and leadership experts, Ulrich analyzes two broad domains, each comprising five factors. The individual domain includes personal qualities, strategic prowess, execution proficiency, interpersonal skills, and fit between the leader’s style and the organization’s market promises. The organizational domain encompasses a leader’s ability to create customer-focused cultures, manage talent, demand accountability, use information to gain competitive advantage, and set up work processes to deal with change.

Ulrich details rigorous metrics and methods for evaluating leaders on each of these factors. The result is a groundbreaking book that will be of vital interest not only to equity and debt investors but also to boards of directors, executive teams, human resource and leadership development professionals, government and ratings agencies—and of course to leaders themselves.

Dave Ulrich is the Rensis Likert Collegiate Professor of Business Administration at the Ross School of Business, University of Michigan, and a partner at the RBL Group consulting firm. He is the author or coauthor of over thirty books, including The Why of Work, Leadership Brand, and HR from the Outside In. He has received a Lifetime Achievement Award from ASTD (now ATD), has repeatedly been named to the Thinkers50 list of thought leaders, and has been designated the #1 most influential international HR thought leader by HR Magazine.