Microsoft has retained the No.1 spot in Drucker Institute’s annual Management Top 250 ranking for the best-run companies in the U.S. for the third year, while rankings for some other tech companies have slipped.
One of the most notable aspects of this year’s rankings is that tech companies have yet to take all the top five spots, unlike last year. Instead, General Motors Co. is ranked at No. 4, and Whirlpool Corp has reached No. 5.
The Drucker Institute’s Management Top 250 ranking is arrived at by analysing 34 data inputs provided by 14 third-party sources and measuring corporate effectiveness and performance in the five areas of customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength.
Although Apple (in the ‘all-star’ list) and IBM are ranked second and third behind Microsoft, some of the other tech companies of note that have slipped in the rankings this year include:
– Meta: showed the fourth-largest decline in overall score, dropping from 31st to 130th in this year’s ranking.
– Amazon: showed the most significant decline in overall score this year, dropping to eighth from second.
– Alphabet Inc. (Google)
– Über
– Salesforce
– Cisco Systems
– Intel
– Adobe
– HP
Perhaps not surprisingly, given the problems leading up to and following Elon Musk’s takeover, Twitter did not make the top 250.
Some of the reasons why some of the big technology companies have dropped in the rankings this year include the following:
– A revenue growth slowing as they came out of the pandemic boom.
– Concerns and lousy press about big tech companies’ power and market concentration.
– In the case of Meta, for example, its rebranding and investor confusion about the metaverse concept (and the resulting cuts in its workforce), plus other concerns about the safety of its young users, may explain the fall.
– In the case of Amazon, for example, its customer service ranking suffered this year which may be due to customer-service concerns, shipping delays, and search results full of advertised products causing frustration.
One of the main reasons why Microsoft has stayed at the top of the rankings is the growth and continuing success of its cloud business, i.e. even though Microsoft’s business has seen some revenue declines, its cloud computing services revenue grew by 35 per cent.
One other trend of note in this year’s Management Top 250 ranking is the gaining of orders by car companies, e.g. Ford (up to 15th from 26th), GM and Tesla (up to 76th from 249th). The reasons for this are the ability of customers to get cars (the pandemic limited supply), and increased knowledge of the benefits of and demand for electric vehicles.
Peter Drucker realised the importance of marketing and innovation and took a broader, more holistic view of what makes a business great, i.e., considering many different factors. This is why the Management Top 250 ranking is so significant. While some companies may not rank in the top 10 for all the five areas the ranking uses, a relatively fair overall order can be arrived at, and the specific areas of strength and weakness can be highlighted. In general, this year’s rankings show how Microsoft appears to have been getting it right with its cloud business, how a slowing of revenue growth coming out of the pandemic boom has harmed other tech companies, and how demand for electric cars is rising.
