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 in a row, while rankings for some other tech companies have slipped.
Top Five Not All Tech This Year
One of the most notable aspects of this year’s rankings is that unlike last year, tech companies have not taken all top five spots. Instead, General Motors Co. is ranked at No. 4 and Whirlpool Corp has reached No. 5.
How Is Being ‘The Best’ Measured?
The Drucker Institute’s Management Top 250 ranking is arrived at by analysing 34 data inputs provided by 14 third-party sources and by measuring corporate effectiveness and performance in the five areas of customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength.
What’s Happened To Other Tech Company Rankings?
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 the year’s ranking.
- Amazon: showed the biggest decline in overall score this year, dropping to eighth from second.
- Alphabet Inc. (Google)
- Cisco Systems
Perhaps not surprisingly, given the problems leading up to and following Elon Musk’s takeover, Twitter did not make the top 250.
Why Tech Ranking Falls?
Some of the reasons why some of the big technology companies have dropped in the rankings during the year include:
- A slowing of revenue growth as they came out of the pandemic boom.
- Concerns and bad press about the power and market concentration of the big tech companies.
- In the case of Meta, for example, its rebrand 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
Why Is Microsoft No. 1?
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%.
Cars Bounce Back
One other trend of note in this year’s Management Top 250 ranking is the gaining of rankings by car companies, e.g. Ford (up to 15th from 26th), GM and Tesla (up to 76th from 249th). The reasons for this may include the ability of customers to get cars (the pandemic limited supply), and increased knowledge of the benefits of and demand for electric vehicles.
What Does This Mean For Your Business?
Peter Drucker realised the importance of marketing and innovation and taking a wider more holistic view of what makes business great, i.e. taking many different factors into account. This is why the Management Top 250 ranking is so significant and while some businesses may not rank in the top 10 for all the five areas the ranking uses, a relatively fair overall ranking 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 had an adverse impact on other tech companies, and how demand for electric cars is rising.
By Mike Knight