Principles Underlying the Drucker Institute’s Company Rankings

The Drucker Institute’s holistic company ranking is based on the following principles of our founder, Peter F. Drucker, using these data sources combined using this methodology.

All quotations are from Peter F. Drucker

Customer Satisfaction

  • “To satisfy the customer is the mission and purpose of every business.”

Employee Engagement and Development

  • “The enterprise must be able to give [its employees] a vision and a sense of mission. It must be able to satisfy their desire for a meaningful contribution to their community and society.”
  • “There…is the task of building and leading organizations in which every person sees herself as a ‘manager’ and accepts the full burden of what is basically managerial responsibility: responsibility for her own job and work group [and] for her contribution to the performance and results of the entire organization.”
  • “Whenever excellence appears, it must be recognized…. Rewards must be based on performance.”
  • “Developing talent is business’ most important task.”

Innovation

  • “Every institution…must build into its day-to-day management four entrepreneurial activities that run in parallel:
    1. organized abandonment of products, services, processes, markets…that are no longer an optimal allocation of resources;
    2. systematic, continuing improvement;
    3. systematic and continuous exploitation…of its successes;
    4. systematic innovation, that is, create the different tomorrow that makes obsolete and, to a large extent, replaces even the most successful products of today.”

Social Responsibility

  • “It is management’s…responsibility to make whatever is genuinely in the public good become the enterprise’s own self-interest.”
  • “One is responsible for one’s impacts, whether they are intended or not.”

Financial Strength

  • “There is only one appropriate yardstick of business performance. This is the return on all assets employed or on all capital invested.”
  • “Productivity is the first test of management’s competence.… The continuous improvement of productivity [with respect to land, labor and capital] is one of management’s most important jobs.… The goal is not to try to find the one perfect productivity measurement, but to use a number of measurements.” (“By measuring the value added over all costs, including the cost of capital, EVA measures, in effect, the productivity of all factors of production.”)
  • “Despite its follies, foibles and fashions, the stock market is a good deal more rational than the ‘experts,’ at least over any extended period of time.” (“Witness the enormous differences in ‘price-earnings ratios.’… The stock market tends to value a stock primarily on the basis of…total return rather than on the basis of…‘earnings per share.’”)
  • “Market standing has to be measured against the market potential, and against the performance of suppliers of competing products or services—whether competition is direct or indirect.… To be a marginal producer is always dangerous.”