The planet’s best-run companies are almost all technology firms.
That’s the most striking conclusion from the latest Management Top 250, an annual ranking of the most effectively managed companies on the planet compiled by Claremont Graduate University’s Drucker Institute. The ranking’s top seven spots went to technology companies: Microsoft, Apple, IBM, Amazon, Google parent company Alphabet, Cisco and Intel, respectively. HP grabbed the tenth spot.
“There is something going on in technology right now around just basic management. These top tech firms are very well managed,” Zachary First, the Drucker Institute’s executive director, tells The Wall Street Journal. “I think it speaks to their public prestige, the extent to which they attract talent, customers, and they have this relentless focus on being high-performance organizations.”
The Drucker Institute, founded by the late management guru Peter Drucker, considers only large private or publicly traded companies for its list. It examined 886 such companies with regard to 33 indicators of management performance across five broad “dimensions of performance”: customer satisfaction, employee engagement, financial strength, innovation and social responsibility.
Microsoft charged into the top spot this year in part by being more innovative. For example, it increased its research and development spending and notched more patent applications and trademark registrations, which Drucker says are indicators of ingenuity. Analysts credit Satya Nadella with driving changes to Microsoft’s corporate culture since becoming CEO in 2014 that have made the company a top performer.
“We are constantly trying to pay attention to what the world is telling us about what it needs,” Microsoft CTO Kevin Scott tells the Journal, “and constantly looking for where the technology trends are heading.”