Dave Ulrich on measuring the market value of leadership

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In a new book entitled The Leadership Capital Index: Realizing the Market Value of Leadership, published on Monday 19 October 2015, author Dave Ulrich, one of the most influential personalities in the field of human resources management, introduces a metric called the "leadership capital index", which is described as a way to measure the value of companies from the perspective of leadership. It thus complements such financial confidence indices as Moody’s or Standard & Poor’s.

Leadership capital index

The index should inform investors about a company management's ability to deal with business problems. Along with colleagues from the RBL consulting company, Ulrich created the index based on interviews and surveys among investors and input from dozens of studies on the impact of leadership on the success of companies.

The index has two components, individual and organisational. The first part evaluates personal qualities of the CEO and top managers; the latter focuses on systems these leaders create and apply. Both components consist of five factors.

Individual

  1. Personal qualities to lead effectively

  2. Strategic thinking

  3. Ability to execute and fulfil promises

  4. People management

  5. Ability to adapt to customers' expectations

Organisational

  1. Ability to create corporate culture focused on customers

  2. Talent management

  3. Performance accountability

  4. Sharing information within the organisation

  5. Ability to adapt working practices to rapid changes

"The intersection of HR and investor fields benefits both. HR becomes even more central to the business and investors have more comprehensive data to determine firm value. A leadership capital index is a wonderful beginning of this journey," Dave Ulrich told HR Magazine.


Author and book

Dave Ulrich is a professor of the Ross School of Business at the University of Michigan and a partner of the consultancy firm RBL Group. He has published over 200 articles and book chapters and written 30 books. He is the author of the concept of HR Business Partnership, described in his 1996 book Human Resource Champions and further elaborated in HR from the Outside In from 2012. The latter title appeared in Czech under the title Nová éra řízení lidských zdrojů – ze servisu partnerem in 2014 and is called "the bible of HR business partnering".

ULRICH, D .: The Capital Index Leadership: Realizing the Market Value of Leadership, Oakland: Berrett-Koehler Publishers, 2015. 312 p.

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Article source HR Magazine - a leading British magazine and website focused on HR
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