Best managed companies have a tremendous sense of direction, rooted in mission and vision, and increasingly inspired by purpose as the world seeks a broader definition of capitalism. This strategy provides focus for the business in the context of a rapidly evolving economy. They invest extensively in planning, have a formal methodology for strategy development, ensure the strategy reflects all stakeholders, have the right execution discipline to bring their strategy to life, and effectively communicate the strategy to all levels of the organization. Even in the face of acute challenges, they maintain a long-term perspective.
Capabilities and Innovation
Best managed companies hone their “secret sauce”, creating a unique set of capabilities and resources that differentiate them in the market. They are highly committed to adaptability and innovation, approach productivity through a continuous improvement lens, and strive to hire the right people to execute their business model and strategy. In other words, they develop a differentiating set of in-house capabilities that allow them to be innovative and enterprising without fear of failure, and they constantly put their operations under the microscope with an eye toward constant improvement.
Culture and Commitment
Best managed companies disproportionately invest in their people. They build a strong corporate culture and legacy, actively develop their people and leadership teams, provide a holistic compensation system recognizing that people seek more than just money for their time, and address continuity concerns within the company by ensuring the next generation is trained and equipped to succeed. Increasingly Best Managed Companies are embracing diversity, equity, and inclusion to unleash their full potential.
Governance and Financials
Best managed companies do the basics well when it comes to governance and financials – using a very modern definition of what the basics entail. Increasingly these companies make use of formal advisory boards that help to elevate their game and broaden their horizons. They use data to drive decision-making, have comprehensive reporting of what is relevant to management and stakeholders, use technology to underpin data management and financial reporting, use key performance indicators (KPIs) to manage their progress, maintain a strong balance sheet, and apply the financial discipline required to drive revenue growth, improve operating margin, and increase asset efficiency.