The Leadership Capital Index

CHAPTER 1When Leadership Matters to Investors, It Matters More

“How much is that doggie in the window?” asked Patti Page in a 1952 novelty song. Investment analysts and others have asked essentially that same question since companies have been publicly traded: “How much is this company?” (With a strong subtext of “How much is this company worth to me?”)

A dog’s value comes from its recognizable traits (breed, age, health, temperament), but also from its personal value to the owner (relationship, history, companionship). Similarly, a company’s value comes from its tangible assets like products, receivables, technology, and facilities—the assets that show up on the balance sheet and are as easy to see as the surface of a dog. Company value also ...