This week, we unveiled the 68th edition of the Coins2Day 500 list. The top slot once again went to Walmart, followed by Amazon and Apple. In total, these 500 companies saw their aggregate profits soar 114% last year.
Their bottom lines are doing great. But how are they doing in terms of purpose? Are their leaders making it a priority?
For the second year in a row, we partnered with Indiggo to create the ROL100 ranking.* It applies Indiggo’s AI powered measurement of “Return On Leadership” to the top 100 companies of the Coins2Day 500—that is, to the 100 largest U.S. Companies by revenue.
The ROL100 ranking assesses leadership execution from a stakeholder capitalism lens, and includes data on key areas ranging from integration of purpose and strategic clarity to leadership alignment. To calculate the ROL100 Ranking, Indiggo leverages its framework with publicly available information to provide an “outside-in” view of Return On Leadership. (To see the full list, go here).
Here are some of the top findings.
The numbers to know
No. 1
- … The spot Microsoft landed on the ROL100 ranking. It was followed by UnitedHealth Group (No.2), Goldman Sachs (No. 3), United Parcel Service (No. 4), and Cisco Systems (No. 5).
54%
- … how much higher the three-year revenue growth of companies in the top 25 of the ROL100 (10% rate) compare to companies in the bottom 25 of the ranking (6.5% rate).
16%
- … how much higher the three-year shareholder return (TSR) of companies in the top 25 of the ROL100 compare (16.3% rate) to companies in the bottom 25 of the ranking (14.1% rate).
$342,352
- … the EBITDA per employee of companies in the top 25 of the ROL100. While the EBITDA of companies in the bottom 25 of the ranking is $176,132.
Big picture
- It pays to have forward-thinking leadership. Top ranked ROL100 companies outperform lower ranked companies (see numbers above) in terms of revenue, profit, and growth. Simply put: There’s a correction between success and purpose-driven leadership.
A few deeper takeaways
1. Satya Nadella is onto something.
The Microsoft leadership team can do a lot at once. At the same time their cloud computing business (Microsoft Azure) is eating away market share from Amazon’s AWS, they’ve propelled their Microsoft Teams business to chip away at Slack’s early mover advantage. Not to mention, their 2022 agreement to buy Activision Blizzard for $69 billion could put them ahead of Meta (aka Facebook) in the race to win dominance in the metaverse.
The glue that holds all these moves together? Microsoft CEO CEO Satya Nadella has put purpose at the forefront of their business, according to Indiggo’s data. In particular, Microsoft received the highest marks for “strategy”—or how well its strategy and purpose connect.
Microsoft’s purpose-driven leadership team might also face its biggest test yet in 2023. Assuming the Activision Blizzard deal goes through, they’ll be tasked with turning around a gaming company that has been accused of promoting a “’frat boy culture.” That hardly sounds like the “One Microsoft” culture Microsoft has been working to foster.
2. Healthcare—not Wall Street—has the best leadership.
Across the country, healthcare providers have been pushed to their limits during a pandemic that often left them understaffed, stretched, and overworked. What got them through it? Often, it was purpose: They knew their work was both critical and mattered.
It’s also not surprising that during the pandemic more healthcare companies embraced purpose-driven leadership. In fact, among the companies that cracked the top 25 of the ROL100, nine are in the health care business. While the bottom 25 includes doesn’t include any healthcare companies
At the opposite end of the spectrum is the financial industry, where dollars—not purpose—still appear to be king. Among the top 25 companies in ROL100 ranking, two are financial services firms. While the bottom 25 includes 11 financial service companies.
*Methodology: The ROL100 ranking uses publicly available information to assess Return on Leadership scores for the top 100 companies on the 2022 Coins2Day 500 list. Return on Leadership measures an organization’s capacity for execution through its leaders and managers, based on four fundamental drivers: Connection to Purpose, Strategic Clarity, Leadership Alignment, and Focused Action. For each fundamental, a mix of three to five key indicators is assessed (16 in all) to determine the overall ROL score and ranking for each company. For more details, go here.