Leaders make weaker investment decisions when they assume every stakeholder defines value in the same financial terms as the organisation funding the investment.

A business case can be economically unattractive to one stakeholder and highly valuable to another.

A health intervention may increase costs in a housing program while reducing hospital use. A public infrastructure project may deliver social access benefits that do not appear as cash revenue to the agency. A customer may pay a premium for identity, trust or community rather than pure functional utility. An employee may value flexibility more than a marginal increase in pay. An investor may accept weak financial economics because of emotional attachment to an institution.

These situations complicate investment analysis—but they do not make it arbitrary.

They require leaders to define whose value is being measured, what form that value takes and whether the organisation responsible for funding can actually capture or justify it.

The Strategic Context

The supplied sources provide three useful perspectives.

First, Christopher Huth's study of actual and potential investors in financial instruments issued by European football clubs found that club attachment was an important influence and that traditional investment objectives were less central for supporter-based investments. The study used 760 completed questionnaires and concluded that some supporters expected an emotional return that compensated for their financial effort. This is a specific behavioural-finance finding in a specific context, not a universal statement about investors.

Second, Davison and colleagues' systematic review of health-focused housing interventions shows that ROI depends on the costs and benefits included and on the perspective from which they are counted. They distinguish narrow ROI analysis from broader cost-benefit approaches that can include societal effects.

Third, the supplied transport impact-assessment methodology evaluates effects by affected group, duration, reversibility, magnitude, mitigation and residual significance. It demonstrates a decision architecture in which not all material consequences are monetised.

Together, these sources support a central proposition: value is multi-dimensional, but it still needs disciplined boundaries.

What Leaders Commonly Misread

The first misread is equating value with revenue.

Revenue is value captured by the organisation, not necessarily total value created. A service can create substantial customer or social value while the provider captures little of it. Conversely, a profitable activity can impose costs on other stakeholders that sit outside the financial model.

The second misread is assuming non-financial value cannot be governed. If a benefit is difficult to monetise, organisations sometimes either ignore it or assign an invented dollar value that gives a false sense of precision. Both responses are weak.

The third misread is combining stakeholder benefits without identifying who receives them. A program may claim taxpayer savings, health benefits, community outcomes and organisational revenue in one total value figure even though each belongs to a different beneficiary and measurement logic.

The fourth misread is assuming rational economic behaviour is the only credible behaviour. Huth's football-club research shows that in supporter-oriented financial instruments, attachment can materially influence willingness to invest. Similar mechanisms may exist in brands, communities, charities or mission-driven organisations, but those extensions require evidence rather than assumption.

The fifth misread is using stakeholder value as a shield against financial discipline. A project does not become strategically sound simply because it has intangible benefits. Non-financial value still requires evidence, prioritisation and trade-off decisions.

Reframing the Issue

A stronger investment question is:

What forms of value are created, who receives them, who pays, and which value dimensions matter to the decision-maker's mandate?

This creates a stakeholder value map with four elements:

  • value type: financial, strategic, social, environmental, emotional, capability or other;
  • beneficiary: shareholder, customer, employee, community, government, partner or another group;
  • payer: the party providing capital, bearing operating cost or accepting risk;
  • capture mechanism: the way the funding organisation receives or justifies the benefit.

The capture mechanism is critical. A company can create customer value and capture it through price, retention or market share. A government agency may justify value through policy outcomes rather than direct revenue. A hospital may save costs through reduced emergency use. A charity may pursue mission outcomes as the primary result.

Different institutions legitimately use different value functions.

Strategic Analysis: Emotional Return Is Still a Real Decision Driver

Huth's research is strategically useful because it challenges the assumption that all investors pursue conventional return, liquidity and risk objectives with equal priority.

In the football-club setting, strong attachment changed the investment decision. Some supporters treated financial instruments partly as a means of supporting the club rather than as a conventional investment product.

For leaders, the important insight is behavioural rather than sector-specific: a stakeholder's utility can include identity, belonging, mission and participation.

A strong brand may therefore command loyalty that cannot be explained by price-performance ratios alone. A community initiative may gain participation because people identify with its purpose. A member-owned organisation may generate engagement through governance rights as well as financial benefit.

But emotional value should not be romanticised. It can also increase tolerance for poor financial performance and weaken challenge. The same attachment that creates support can create overinvestment or resistance to change.

That is why behavioural value belongs inside governance, not outside it.

Strategic Analysis: Social ROI Depends on Perspective

The housing-and-health review identified nine studies meeting its inclusion criteria and reported positive ROI across the included interventions, while also noting significant limitations in methods, search scope and generalisability. Some programs reduced hospitalisations or emergency-department utilisation; other interventions generated broader taxpayer or societal benefits.

The executive lesson is not that every social intervention generates positive ROI. It is that the numerator and denominator depend on perspective.

If a housing agency pays for an intervention while a health system captures most of the financial savings, the intervention may have a positive system-wide economic case but a weak budget case for the housing agency. Without cross-agency funding or shared-benefit mechanisms, socially valuable investments can remain institutionally unattractive.

The same problem appears in enterprises. One business unit may fund a data-quality program while another captures the productivity gain. A maintenance team may incur cost to protect revenue owned by operations. A cyber program may reduce enterprise risk without creating a visible departmental return.

Investment governance must therefore align funding responsibility with benefit ownership where possible.

Related article: The Business Case Is Only as Good as Its Counterfactual

Strategic Analysis: Some Impacts Need Significance, Not Monetisation

The Caboolture to Maroochydore corridor appraisal methodology offers a useful alternative where consequences are difficult or inappropriate to express solely in dollars. It considers who is affected, whether impacts are reversible, how long they last, whether they can be mitigated and how significant the residual effect remains.

That structure is valuable for executive decisions involving safety, environment, cultural heritage, community impact or other consequences where monetisation may be contentious or incomplete.

The discipline is to avoid two extremes:

  • forcing every impact into a financial value; or
  • allowing qualitative claims to remain vague and unranked.

Qualitative value can still be governed through explicit criteria, thresholds and evidence.

Decision Framework

Use a four-ledger investment model for decisions with multiple stakeholders.

Ledger 1 — Enterprise economics

What cash flow, cost, return and risk accrue to the funding organisation?

Ledger 2 — Strategic capability

What capability, option, resilience or competitive position is created that may not be fully captured in near-term cash flow?

Ledger 3 — Stakeholder outcomes

Who experiences material benefits or harms, and how will they be measured?

Ledger 4 — Externalities and obligations

What environmental, social, regulatory, safety or community effects sit outside the direct financial exchange?

For each ledger, define evidence, owner, threshold and time horizon.

Do not collapse the ledgers into one synthetic score unless the weighting logic is transparent and governed.

From Strategy to Execution

Immediately, business cases should state the perspective of each claimed benefit. “Savings of $10 million” is incomplete unless the paper identifies whose savings they are.

In the medium term, programs with cross-functional or cross-agency benefits should establish benefit-sharing and funding mechanisms. If one area pays while another benefits, governance must resolve the misalignment rather than assuming cooperation will emerge automatically.

Qualitative impacts should be evaluated using explicit significance criteria. The transport appraisal source demonstrates the value of considering duration, reversibility, affected groups, mitigation and residual effects. Those principles can be adapted without copying historical regulatory thresholds.

Longer term, leaders should understand how stakeholder preferences affect the business model. If customers value trust, identity or community, those attributes may be economically relevant even when they are not separately priced. If employees value flexibility or purpose, workforce strategy should not assume compensation is the only driver.

Related article: The Metric You Optimise Becomes the Organisation You Build

Signals to Monitor

Warning signs include:

  • business cases claiming “social value” without naming the beneficiary or measurement method;
  • one function paying for benefits captured elsewhere with no governance mechanism;
  • intangible benefits being assigned arbitrary financial values to force a positive ROI;
  • financial metrics dominating decisions where mission or statutory outcomes are central;
  • stakeholder attachment being mistaken for permission to ignore financial sustainability;
  • adverse externalities being excluded because they sit outside the project budget.

Source Notes

Key sources include Christopher Huth, “Who invests in financial instruments of sport clubs? An empirical analysis of actual and potential individual investors of professional European football clubs”, European Sport Management Quarterly 20(4), 500–519 (2020), DOI 10.1080/16184742.2019.1684539; and Genevieve Davison, Dan Ferris, Adam Pearson and Ruth Shach, “Investments with returns: a systematic literature review of health-focused housing interventions”, Journal of Housing and the Built Environment 35, 829–845 (2020), DOI 10.1007/s10901-019-09715-6.

The article also draws conceptually on the Caboolture to Maroochydore Corridor Study: Final Impact Assessment and Land Use Transport Strategy, Chapter 4, February 2001. Complete authorship/publication metadata should be confirmed before publication. [SOURCE DETAILS REQUIRED]

Questions for the Leadership Team

  1. Whose value are we measuring in our current investment framework?
  2. Which initiatives create benefits for one part of the system while another part bears the cost?
  3. Where are we ignoring important non-financial outcomes because they are difficult to monetise?
  4. Where are we using vague intangible benefits to excuse weak economics?
  5. Which stakeholders make decisions based on identity, trust, mission or attachment rather than price and financial return alone?
  6. What externalities or residual impacts are missing from our current business cases?

Closing Perspective

Financial return is indispensable where capital must earn an economic return. It is not a complete theory of value for every organisation, stakeholder or decision.

The stronger approach is not to abandon economics, but to make the value boundary explicit. Identify what form of value is created, who receives it, who pays, how it is captured and which outcomes are central to the organisation's mandate.

When leaders do that, non-financial value becomes governable rather than rhetorical—and financial value becomes more honest about what it does and does not measure.