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The Value Creators – Ranking tomorrow’s high-potential companies via a ‘Digital Index’

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Samuel Robberts

July 1st, 2022

The Value Creators – Ranking tomorrow’s high-potential companies via a ‘Digital Index’

Which factors are most predictive of deal transactions within the tech-enabled theme?

Via a robust suite of data-driven analytical tools, the Leadership Dynamics platform helps businesses understand how leadership affects the success-propensity of a leadership team in achieving their value creation goals. This is at the heart of what we do.

Armed with these insights, businesses can make informed adjustments to improve their value-creating outcomes. Indeed, the top-performing and fastest-growing businesses aren't just maximising revenue, they're maximising their leadership potential.

As such, we contend that financial growth isn't the only indicator of organisational success. To highlight this, we have started publishing a quarterly 'digital index' as a league table of businesses. The results for Q1 2022 have already been published. If you would like to receive Q2 results then please submit your details here

What is the Digital index? 

Using our data-driven insights and our experience of monitoring the UK and European market since 2015, we've identified three significant factors that allow us to predict primary transactions within the tech-enabled sector: 

1.     Company growth signals

2.     Company change signals

3.     Company investing signals

The digital index score ranks companies on their likelihood to engage in future transactions. Businesses are given a numerical score on a scale of 300, with 300 being the highest propensity for future transactions. The Q1 2022 index covers enterprises from the UK, DACH, Nordics, and Benelux.

Digital Index Top 10

We identified the top ten companies that are most likely to be looking for investment and receive investment for the first time.

This small sample demonstrates a trend toward companies signalling 'company change' compared to those signalling 'company growth' and 'company investing.' However, the enterprise with the highest digital index score, EVA Global, demonstrated potential through company growth.

If we move farther down the list to examine the top 11 to 25 companies overall, we see the trend continue with eight companies showing potential from company change signals. It is interesting to note a significant increase in businesses demonstrating company investing in this section (seven out of fifteen). No companies in this bracket were highlighted for company growth.

Top 10 risers

We think it's important to note which companies have made significant progress in their development relative to their digital index scores. The following companies made the most significant leaps between their previous and current rankings and demonstrated a greater likelihood to pursue investment for the first time. As the table notes, the biggest risers this quarter demonstrated company change.

Leadership Dynamics and functional balance?

As part of the Digital Index programme, we have exclusive use of Leadership Dynamics, a digital analytics tool that Venture, Private, and Growth Capital funds and their portfolio firms utilise both before and after a deal. It offers multifaceted perceptions of a leadership team's competence, and complementarity. The Top 10 Fastest-Growing Assets in the Tech-Enabled Sector were better-predicted thanks to it.

In addition to assisting clients in simulating various leadership team configurations in the software and assessing the effects of specific Executive Changes on the exit value, Leadership Dynamics identifies the ongoing leadership development needs within the team. Its main goal is to assess the leadership team's likelihood of success.

We use functional balance, representation, and evaluation of leadership teams to gauge how likely they are to contribute to the overall success of the company. This enables us to plot the level and kind of functional experience held by each leader across the various leadership positions within the team, in which assessments of individuals and teams are based on how well they can physically and behaviourally accomplish their business goals and how well they can comprehend how future events or problems will affect their performance as a team or as a corporation.

If you want to find out more about the Leadership Dynamics platform please reach out to Samuel Robberts, Chief Product Officer at SR@draxexecutive.com who will be more than happy to walk you through the full capability of our product.

EVA Ranks No 1, What made EVA Global stand out from the crowd?

EVA Global is a managed services provider and charge point operator for the e-mobility industry. EVA Global took the top spot on the Q1 2022 digital index with company growth as its primary growth signal.

EVA Global’s team is currently structured with three direct reports to the co-CEOs and founders. Their leadership team have spread out functional responsibilities, although there is a heavy concentration on revenue function.

 

Please contact Ruby Sheera and Patrick Jones from the Technology and Technology Enabled Practice who have worked with the Leadership Dynamics team to produce this index. For more information on how to maximise the potential of your leadership team please reach out to Ruby at rs@draxexcutive.com and Patrick at pj@draxexecutive.com

The DRAX Digital Index is powered by Leadership Dynamics.

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