What are the 15 top companies that best represent success?
Booz & Company carried out a survey involving over 700 senior-level executives across the globe and a wide range of industries.
The executives were asked to choose the 15 top companies from a list of the 105 largest worldwide in the automotive, pharmaceutical, consumer, electronics, energy, manufacturing, financial and technologies industries.
The following were the 15 top companies executives say embody success (in alphabetical order):
- Berkshire Hathaway
- Philip Morris International
- Procter & Gamble
- Royal Dutch Shell
- Samsung Electronics
- Toyota Motor
- Wal-Mart Stores
What drives the 15 top companies?
The interviewees were also asked what drives these companies’ success and what distinguishes them from the competition. The following common threads stood out:
- Focus – the most successful firms “excel in a few functional areas… concentrate on only a few world-class capabilities.” Companies that did not stand out like these top 15 tend to strive to do well in all areas.
- Clarity of identify – the more successful companies have a much more evident and powerful “clarity of identity,” – they clearly know what unique things they stand for and focus on them consistently.
- Cohesion – the successful companies are much more “coherent”, according to the executives. In other words, each department works together “pointing in the same direction and supporting the company’s overall value position.”
Paul Leinwand, a partner at Booz & Company, said:
“Interestingly, the companies that in-the-know executives respect the most and feel are most successful do not stand out because of their assets or scale. They stand out because they have learned how to be truly excellent at a few things that matter to customers – a few distinctive capabilities.”
What makes Apple stand out?
Leinwand gave as an example the capabilities that Apple has nearly perfected, which include:
- A profound understanding of how people live their lives, go about their work, and play.
- An intuitive user interface design.
- Constant innovation across all products, services and ways to interact.
- An elegant and minimalistic design.
- Holistic management of the customer experience.
- Support and integration of third-party developers.
What makes Procter & Gamble stand out?
The executives believe Procter & Gamble excels in the following capabilities:
- State-of-the art technology-based innovation whose goal is to provide life-enhancing or life-changing products at reasonable prices.
- Worldwide brand-based marketing and sales which concentrates on communicating the key benefits of each product.
- Innovative manufacturing.
- Research and development which draws on ideas internationally (open innovation).
15 top companies stay true to their identity
According to Booz & Company research, “companies that stand for something unique and consistent over time” – the ones with the clearest identity – have a 3-year total shareholder return, or TSR that is more than 3 percentage points greater than that of their competitors.
Cesare Mainardi, CEO at Booz & Company, said:
“What separates the best performing companies from others is the extent to which they stay true to who they are – their identity – and whether they have built the distinctive capabilities that allow them to deliver their unique value proposition to customers.”
Comparing drivers of success for Microsoft and Apple
Interviewees’ perceptions of Microsoft and Apple help to illustrate the differences in how strategy is approached. The respondents see a clear difference between these two companies.
(Source: Booze & Company)
While Microsoft’s success is perceived to be mainly based on its scale and lucrative assets, that of Apple is primarily based on its distinctive way of providing value “and the coherence between its strategy and its capabilities.”