How TMT companies win the confidence of investorsThe leadership premium |
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Background
This paper quantifies the difference leaders make – and identifies the capabilities needed to achieve a ‘leadership premium’. It confirms that analysts look beyond the bottom line to the long‑term potential of an organisation when making their valuations, and that they judge this potential by the quality of leadership. The findings of The Leadership Premium are relevant to any TMT company with a public listing today. Ignore them and you could expose your organisation to increased risk.
This paper is the fourth in the ‘Digital Leadership’ series looking at the challenges faced by one of today’s fastest‑moving sectors – technology, media and telecoms. Driven by interviews with financial analysts in key markets, it reveals the extent to which perceptions of leadership move share prices – and how leaders in the TMT sector can win market confidence and increase shareholder value.
Key findings
Analysts value effective leadership at a premium – and levy a discount for ineffective leadership.
They want to see leaders who have the mental agility to think clearly and quickly, the practical skills to implement strategy effectively, and the ‘softer’ skills needed to build teams and relationships. They do not, though, expect to find all these attributes in any one individual.
Leaders who fail to communicate effectively and honestly lose the confidence of analysts. So, too, do those who take an autocratic approach to management. In preparing for the challenges ahead, organisations in the TMT sector need to be aware of the ‘leadership premium’.
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The leadership premium (PDF)
