In an analysis of the top 100 Fortune 500 companies, researchers found a direct connection between purpose-driven leadership and company success.
Key Details
- Fortune 500 companies represent around two-thirds of the U.S. GDP and collectively generate $18 trillion in revenue.
- Of these valuable companies, some of the most successful have a common characteristic—an emphasis on purpose-driven leadership.
- Using artificial intelligence (AI) to determine the Return On Leadership (ROL), Fortune partnered with software company Indiggo to publish the 2023 ROL100 list.
- The research found a strong correlation between successful companies and those emphasizing purpose-driven leadership.
- Highly ranked ROL100 companies had greater better revenue, profit, and growth results than those lower on the list.
Why it’s news
Many factors influence a company’s success, including its leader’s character. However, Indiggo’s ROL100 list shows that the most successful companies will have a greater purpose behind their leadership.
Microsoft was the top company on the ROL100 list. The company’s stock price has steadily increased as it focuses on emerging AI technology. According to Indiggo’s data, the tech company has focused on purpose in its business. On Indiggo’s list, Microsoft placed number two in the purpose category, three in strategy, and four in alignment. These combined scores put the company number one overall.
Microsoft’s executive team has been vocal about its focus on purpose in business. Company CFO Amy Hood told Fortune, “I define my role as making Microsoft a place our customers, partners, and employees want to pick every day. If you do that, you also create a culture that you want.”
Indiggo’s research also found that companies with purpose-driven leaders benefited their employees. The earnings before interest, taxes, depreciation, and amortization (EBITDA) per employee in the highest-ranking ROL100 companies were more than double those at the bottom of the list.
Among the top 25 companies on the list, the EBITDA was $155,469, while the lower 25 companies had an average of $36,810.
Healthcare companies tended to rank highly on the ROL100 list. Eight were in the top 25—more than any other sector.
Here are the top 10 companies on the ROL100 list:
- Microsoft
- IBM
- Cisco Systems
- Thermo Fisher Scientific
- Pfizer
- Deere & Co
- Coca-Cola
- HCA Healthcare Inc
- Elevance Healthcare Inc
- United Parcel Service
