Are Your Leaders Worth $300M?

In the September 21, 2009 issue of Forbes magazine, Tom Van Riper asks the provocative question of Miami Dolphins’ Executive Vice President of Football Operations Bill Parcells.  Can a person like Parcells really have an impact on the business value of an NFL franchise?

Van Riper successfully argues that Parcells adds millions to the enterprise by his presence and competencies.  But is this really such a provocative question?  Should it come as a real surprise to any of you running companies?  The question we all should be asking is whether the current leaders on our team are adding value to our enterprise.

In his seminal work on building great companies, Jim Collins asks the provocative question, “Would you hire your leadership team again?”  We all know leadership is essential for long-term success, but we should intuitively know that leaders do indeed add value to the enterprise.  Earnings, intellectual property, plant and equipment all have a balance sheet value, but their use is minimal without the leadership to leverage such assets.

During the dot com era (I feel like I’m referencing a geologic era of the Phanerozoic eon), a number of business ventures were funded because they had the right leadership team.  Investors were willing to put their money on a management team with a proven track record.  Now those days are long gone, but investors still look for great leadership teams when making the decision to part with their money.

In 2003,  I joined a growing company and when I shared my decision with a colleague familiar with the market, he said “Oh, they have all the good people.”   Bill Parcells calls himself a “talent accumulator”.  If you want to build the business value of your company, I would suggest you take the “Big Tuna’s” advice and begin to accumulate the best leadership talent available.  Become your market’s “talent accumulator.”

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