So the Fortune World’s Most Admired Companies survey is out. Could there have been a more tumultuous year to measure reputations?
The reputation “stumble rate” is not good. Nearly one out of two (49%) of the world’s number-one most admired companies lost their crowns over the past year in their respective industries. To calculate the Most Admired Companies stumble rate, Weber Shandwick looks at the leader in each industry and matches it against the industry leader from earlier years. Unfortunately, we only have one year’s stumble rate because Fortune changed its most admired methodology one year ago by combining its two separate lists (America’s Most Admired and World’s Most Admired into one list, the World’s Most Admired). For our stumble rate, 2010 industry leaders are compared with 2009 industry leaders and if the industry leader is different, it is defined as a reputation “stumble.” Losing the industry crown is painful. The bragging rights of being named the #1 most admired company in one’s industry in the world is priceless. While reputation loss may now be inevitable, it still stings.
Here are the industries (55 this year) where the previous year’s #1 most admired company fell from its perch.
Financial Data Services
Food & Drug Stores
Health Care: Medical Facilities
Insurance – Life & Health
Medical & Other Precision Equipment
Motor Vehicle Parts
Trucking, Transportation & Logistics
Wholesalers – Health Care
In an article about the list, the writer says “turnover among Fortune’s top 50 All-Stars list this year was just 10%, roughly what it has been for most of the past decade. Seventeen companies have been on the All-Star list since its inception in 2001; more than half of this year’s top 50 have been on the list eight of the past 10 years. That rock-solid staying power is a testament to the lasting value these elite companies have created. And it shows how tough it is to make our All-Star list.” The All-Star list is what corporate raters say are the top 50 most admired from any industry. Interestingly, the majority of the top 50 in 2010’s list are consumer-facing companies such as a Walmart or Best Buy. In fact, less than one dozen companies on the top 50 are what I would call business-to-business. There has always been a bias towards more consumer-specific companies in the top 10, top 20 or top 50 regardless how it was determined. This bias could be because the greatest number of corporate voters are familiar with most consumer-facing companies compared to some of the business-specific companies that are lesser well known and perhaps more regional. A different perspective from Weber Shandwick’s stumble rate but an interesting one as well.
As I mentioned in my last post, I was eager to see the cover of this year’s Most Admired. Would CEOs be on the cover with tears in their eyes over the turbulent past year or would products be featured instead? Maybe Fortune considering featuring a CEO who suffered the most over the past 12-18 months or what about 2009 departed CEOs? I have to say I was surprised. The cover, as seen here, features military leaders! The cover feature is about how companies are employing a new type of leadership – the military. What message does this send if the Most Admired roster does not make it to the cover? Is the Most Admired becoming one of many rankings or is being most admired not as important as it used to be? I doubt the latter because the article also stated, “The financial crisis may finally be abating, but after a year of dramatic ups and downs, there’s little doubt that corporate reputation matters more than ever before. Perhaps it’s no surprise, then, that while entire industries adjust to wrenching changes as the economy starts to stabilize, a ranking of who’s admired and who’s not would have particular import.”
Perhaps no words or pictures could describe what a beating this year has been for many of the most admired.