PRINCIPLES UNDERLYING THE
DRUCKER INSTITUTE’S COMPANY RANKINGS

(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.”

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.”

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.”