As you digest the Management Top 250 for 2020, seeing which companies landed where on the list, our heads are already off in a different place: thinking about the rankings for 2021.
As soon as we put things to bed, we begin to contemplate modifications for the next year to the Drucker Institute’s gauge of corporate effectiveness, which is grounded in the teachings of the late management scholar Peter Drucker and serves as the basis of the Management Top 250. We define “effectiveness” as Mr. Drucker did: doing the right things well.
For our 2020 analysis, we examined 886 major corporations in all, using 33 indicators across five categories: customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength. Corporations are compared in each of these areas, as well as in their overall effectiveness, through standardized scores with a typical range of 0 to 100 and a mean of 50.
Sometimes, the adjustments we make to our statistical model are substantial. In 2019, for example, we revamped the way that we determine financial strength by adding to our mix of metrics “economic value added,” or EVA, which takes stock of a company’s operating efficiency, asset management, capital discipline and profitable growth.
Other times, we make smaller tweaks, such as when we eliminated a few indicators in 2018 to prevent the possible overweighting of data from the same provider.