Fully Invested - Helping Business Owners and Management Teams Maximize Business Value | Raising Growth Capital and Financing; Mergers and Acquisitions; Sell a Business; Buy a Business; Commercial Real Estate Finance; Valuation

How Leadership Impacts the Value of Your Business


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How Leadership Impacts the Value of Your Business
hosted by: David Mariano, Director and head

of the firm’s Buy-Side advisory practice






How Leadership Impacts the Value of Your Business
Historically, bankers, investors and buyers have relied on a “gut feel” when trying to gauge the impact of leadership and other intangibles on the value of a business. But what if there was an index to help us do this more effectively?

I recently ran across and article from Harvard Business Review by Allan Freed and Dave Ulrich about developing a new way to measure the true market value of leadership. I thought this was interesting for a couple reasons:

Intangibles have always been difficult to measure, but I like that someone is trying to come up with a better way. The article proposes the leadership capital index as a tool to measure and influence value, similar to financial confidence indices like Standard & Poor’s and Moody’s.
Whether a business owner wants to sell or not, an index like this could still be used as a tool to create value in a business. The framework could be useful for investors and owners alike.


 Key questions in this episode:

* What non-financial elements of a business help to determine its value?
* What is the predictor in determining the value of intangible aspects of a business?
* What is a leadership capital index and whom will it help?
* Can using this new index help to create value in a business?

 Key points in this episode:

* Calculating the market value of leadership.
* Why buyers and investors are looking at other aspects of a business besides the financial metrics.
* How the new index will help investors look at the readiness of a company’s leadership to meet business challenges (at 3:20).
* Why business owners should begin to look at their leadership in a different way.
* The ten elements in the leadership capital index.
* How a leadership capital index can help business owners, investors and advisors (at 5:07).

Resources mentioned in this podcast

* Click here for access to training and templates
* Harvard Business Review “Calculating the Market Value of Business”


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Fully Invested - Helping Business Owners and Management Teams Maximize Business Value | Raising Growth Capital and Financing; Mergers and Acquisitions; Sell a Business; Buy a Business; Commercial Real Estate Finance; ValuationBy Western Reserve Partners LLC