Technology companies were ranked among the best-run in the US this year, as companies like Walmart and Tractor Supply were labeled as ‘red flag’ employers.
Apple unseated Microsoft for first place in the Management Top 250 for 2024, while Nvidia came in second, Microsoft ranked third and Intel rounded out the top four, the Wall Street Journal reports.
Management Top 250 rankings compare companies using late management guru Peter Drucker’s principles to identify the most well-managed businesses each year.
For 2024, 842 companies were graded against five categories — including customer satisfaction, innovation, social responsibility, employee engagement and development and financial strength.
Those categories are measured based on 35 indicators supplied by third-party data providers, using a statistical model created by researchers at Claremont Graduate University’s Drucker Institute.
Companies that are in the top 15 percent in each of the categories are designated ‘all stars,’ while those that score in the bottom 25 percent in any category are designated as ‘red flags.’
But this year, Apple was listed as the only all-star. That marks the first time the list has only one all star — usually there are about half a dozen.
Other companies like Nvidia and Microsoft came close this year, as tech companies emerged as this year’s big winners following a downturn that saw them laying off thousands of workers.
Management Top 250 compared 842 companies against five categories — including customer satisfaction, innovation, social responsibility, employee engagement and development and financial strength
‘Technology is thriving,’ said Michael H Kelly, the executive director of Drucker Institute.
‘Companies that know how to best incorporate technology into their organization, not just for innovation, but that realize their workers are customers too, and what their employees experience is what their customers will also experience are companies that thrive.’
For Apple, 2024 marked a rebound after it started off the year with faltering iPhone sales and new competition from rivals in China only to beat Wall Street expectations in the quarter that ended in June.
It was bolstered by the company’s services unit, which includes App Store revenue and streaming services, that helped provide a cushion for declining iPhone sales.
At the same time, sales of iPads and MacBooks rose, and by September, Apple reported record revenue.
The company has also been trying to catch up on its rivals in the AI arms race, unveiling an array of new tools in June that investors hoped would encourage users to upgrade their iPhones.
The new Apple Intelligence software will now retrieve information from across a user’s apps and scan personal information to help users proofread text, retrieve photos of specific family members or gauge traffic ahead of their commute.
Users can also create their own images and emojis, and convert sketches into diagrams, the Journal reports.
To achieve these functions, Apple partnered with OpenAI and ChatGPT.
Apple topped the list and was listed as this year’s only ‘all-star’ company
Some experts now credit CEO Tim Cook with the company’s success.
‘While he hasn’t been the pioneer in areas like AI, he’s very wisely a quick adapter,’ Jeffrey Sonnenfeld, senior associate dean for leadership studies at Yale School of Management.
‘And in a company that used to be resistant to partnerships on the outside, what he’s done with the very promising Apple Intelligence, working with OpenAI, is an example of why people are so excited about the company.’
Sonnenfeld also cited Cook’s public championing of consumer privacy and his collaborative style as factors that made the company excel in the areas of social responsibility and employee engagement.
‘Steve Jobs would often have a fair bit of internecine warfare and Tim Cook had none of that. He got these folks to work together collaboratively,’ he said.
‘Employees feel really engaged. They feel really valued.’
Experts credited CEO Tim Cook with Apple’s success this year
The tech giant unseated Microsoft to claim the number one spot
Other companies that performed well include Mastercard, Philip Morris International and Johnson & Johnson.
Mastercard executives have told investors they are working to enhance convenience and security of payment technology through contactless cards and tokenization, while they are also building banking and retail experiences that can be personalized through augmented reality and AI-powered cybersecurity to thwart potential scammers.
Johnson & Johnson also benefitted from a high score in innovation, after submitting 28 regulatory filings in the US and EU for Innovative Medicine business and launching 10 major products in the US and EU as of December 2.
Tobacco giant Philip Morris International, meanwhile, ranked high in innovation and social responsibility amid a years-long mission to transition from cigarettes to smoke-free products like its Zyn flavored nicotine patches and a device called IQOS that heats, but doesn’t burn tobacco.
The company announced earlier this year that its Zyn patches had become so popular that its only US factory couldn’t churn them out fast enough.
Retail giant Walmart received a red flag for employee engagement
This year’s list also included some newcomers, like Airbnb and Netflix.
Airbnb had just missed ranking on the list last year, but benefitted from strong scores in innovation and financial strength as it generated more revenue than forecasted due to the Olympics in Paris and the Euro Cup in Germany.
Netflix also had high scores across the board, except in employee engagement.
Its ranking on the list suggests its efforts to change its plan pricing, limit password-sharing and expand advertising is working.
Companies that received red flags include Meta Platforms, Walmart and Tractor Supply – which received a low score on employee engagement.
It announced in June that it is eliminating all jobs focused on DEI-efforts and withdrawing its carbon-emission goals. The company also said it would stop sponsoring pride festivals.
Meta, meanwhile, was afflicted by criticisms of its data-privacy practices, its handling of misinformation and its algorithms, which continue to promote problematic content like underage sex.
And while Walmart moved up five spots in the rankings, it received a red flag for employee engagement.
Over the past year, the retailer changed pay and titles for corporate staff, including a reduction in stock compensation, changed the wage structure for hourly workers, cut pay for some new hires and laid off hundreds of workers.
Walmart also asked most remote corporate workers to return to the office.
Yet a Walmart spokeswoman pointed out a number of ways the company has invested in its associates, including raising the average store-manager salary, starting a new bonus program for hourly associates and launching a program that helps hourly supply-chain workers learn new trade skill and move into higher-paid technician roles.
Pfizer was one of the worst performers this year, following the COVID emergency
Among the worst performers were healthcare, life-sciences and pharmaceutical companies that have gone by the wayside following the pandemic.
Once the COVID emergency receded, sales of Pfizer’s vaccine and anti-viral products fell more than executives had anticipated while its new drugs failed to gain steam.
Eli Lilly also had a rough start to the year as supply constraints for a popular class of diabetes and obesity drugs limited its first-quarter sales.
Separately, in the automotive industry, Tesla received low scores in every category except innovation, and Chevron suffered from lower scores in satisfaction, innovation and financial strength.
