Best Companies for Leadership? You Won’t be Surprised by This List

It was Mark Twain who once famously said, “Everybody talks about the weather, but nobody does anything about it,” and so it is with leadership, too.

Yes, everyone talks about leadership a lot, but who actually sets an example for how to really lead?

The Hay Group, a global consulting firm, tries to answer that question each year, and they do it with their annual Best Companies for Leadership study. The study identifies the very best companies for leadership across the globe and examines how they develop their leaders.

Here are the Top 20 Best Companies for leadership the study found across the globe:

1 General Electric
 

2  Procter & Gamble

3  Intel Corporation

4  Siemens

5  Banco Santander

6  Coca-Cola

7  McDonald’s Corporation

8  Accenture

9  Walmart

10 Southwest Airlines

11 ABB
 

12 Microsoft

13 PepsiCo

14 Goldman Sachs

15 Hewlett-Packard

16 Unilever

17 Cisco Systems

18 FedEx

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19 Pfizer Inc.

20 BASF

Here’s what the study says about this year’s Global Top 20:

This year’s best once again form a roll-call of some of the world’s most prominent companies. But there have been some notable shifts in the 2010 listing. Two European firms formerly outside the 2009 top 20 – Siemens and Banco Santander – have jumped straight into the 2010 top 5. BASF is a new arrival from Europe too. Intel has also made a big jump from beyond the top firms to join the top three.

Other new faces in this year’s top 20 include Microsoft, FedEx, Pepsico and Pfizer while Infosys, IKEA, Zappos, UPS and General Mills have dropped out of the front-runners’ listing. To see how the top 20 ranking has changed over the last five years, click here.

GE maintains its top-notch reputation for leadership excellence and several others – P&G, Coca-Cola, Walmart, McDonald’s, Accenture and Southwest Airlines – all show consistency, changing places but nonetheless maintaining their position in the overall top 10.

Close, but no cigar

The study also lists five “honorable mentions,” organizations that just missed the top 20 list, includes firms “that have previously occupied top 20 positions and may well do so again:

  1. Google
  2. Apple
  3. IBM
  4. Nestle
  5. 3M

According to the Hay Group’s study, all of the Top 20 companies this year report that everyone at every level of the organization has the opportunity to develop and practice the capabilities needed to lead others, compared to less than 70 percent of all other companies in the study.  In addition, 90 percent of the Top 20 companies report that people are expected to lead regardless of whether they have a formal position of authority, compared to only 59 percent of other companies.

In other words, getting people to take on a leadership role as needed, even if they aren’t formally charged with being a manager or leader, seems to be a key element for companies that made this year’s Best Companies for Leadership Top 20 list.

“The Top 20 Best Companies for Leadership are at the forefront of a significant shift away from hierarchical organizational operating models,” said Rick Lash, Director in Hay Group‘s Leadership and Talent Practice and co-leader of the Best Companies for Leadership Study.  “Leadership in the 21st Century is about leading at all levels; not restricting it to title. As organizations become flatter, the best leaders are learning they must check their egos at the door and become increasingly sensitive to diversity, generational and geographical issues.”

Best companies moving beyond command-and-control

The Hay Group study also found something else: the very best companies are moving away from command-and-control leadership/management practices to a more collaborative style — something that works much better with younger Millennials — throughout the organization. The study also found that the shift in organizational culture away from top-down leadership extends beyond employees at headquarters.

For example, all of the Top 20 companies encourage local leaders to participate in decisions made at headquarters, compared to 72 percent of all other companies. Similarly, 95 percent of the Top 20 companies report that ideas coming from subsidiary leaders are just as likely to be implemented as those from headquarters, compared to 76 percent of all other companies.

“This year’s Top 20 is a group of companies that are moving quickly to improve their efficiency and competitive positioning by flattening their business structures and diversifying their workforces,” added the Hay Group’s Lash. “They are adapting development tools and reward structures to equip managers with the changing global leadership skills the business environment demands, and incentivizing leaders to use these capabilities effectively.”

How the study was done

Hay Group has researched the Best Companies for Leadership since 2005. The latest 2010 survey included responses from 3769 individuals and 1827 organizations worldwide. The survey was based on the organization’s response to an online questionnaire and peer nominations. Respondents that completed the survey were from 96 countries, with 26.6 percent from North America, 23.4 percent from Europe, 3.6 percent from the Middle East, 19.7 percent from Asia, 23.7 percent from South America, 2.6 percent from the Pacific, and .5 percent from Africa.

There’s one more interesting finding (actually, you’ll probably find more than one) that jumped out at me: the top companies in this study are committed to better work-life balance for their employees. Some 95 percent of the Top 20 companies in the survey answered affirmatively to the statement,”Helping employees achieve work-life balance is a priority for this company,” compared to 63 percent of all other organizations. Clearly, work-life balance is coming of age as a workforce management principle among the best organizations with world-class leadership practices.

If you are into good management and leadership — and believe it or not, I have had some managers in my time who would NOT fall into this category — this is a study worth spending some time with, because it will give you some great food for thought on how to improve your own organization’s leadership and management practices.

It’s like what John Quincy Adams once said:  “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

John Hollon is Editor-at-Large at ERE Media and was the founding Editor of TLNT.com. A longtime newspaper, magazine, and business journal editor, John has deep roots in the talent management space. He's the former Editor of Workforce Management magazine and workforce.com, served as Editor of RecruitingDaily, and was Vice President for Content at HR technology firm Checkster. An award-winning journalist, John has written extensively about HR, talent management, leadership, and smart business practices, including for the popular Fistful of Talent blog. Contact him at johnhollon@ere.net, connect with him on LinkedIn, or follow him on Twitter @johnhollon.

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