Drucker Institute

Factor Loadings for the Drucker Institute’s Company Rankings

The Drucker Institute’sĀ holistic company rankingĀ is based onĀ the principlesĀ of our founder, Peter F. Drucker, using these data sources, combined using thisĀ methodology.

Below are the factor loadings in our model for both the dimensions as they relate to overall Effectiveness and the indicators as they relate to their respective dimension. For a sense of proportion,Ā the average correlation of our five areas with effectiveness is about the same as the correlation of the percentage of shots a National Basketball Association team makes with how many games it wins.

Of course, there are lots of things that our model misses. As a matter of statistics, even a factor loading of 0.66 explains only about 44% of a companyā€™s effectiveness.

Macroeconomic events, such as big swings in currency exchange rates or new trade policies, are likely to fall outside the scope of our model. We also don’t always detect, at least in a timely way, some headline-grabbing management failures.Ā Nonetheless, by and large, our model has proven its ability to consistently separate out the best-managed companies from the rest.

Dimension loading on Effectiveness Indicator loading on Dimension 2017 2018 2019 2020 2021 2022 2023
Customer Satisfaction 0.56 0.57 0.48 0.58 0.62 0.66 0.71
American Customer Satisfaction Index 0.79 0.93 0.85 0.84 0.85 0.89 0.94
Temkin customer experience 0.86 0.81 N/A N/A N/A N/A N/A
Net Promoter Score 0.92 0.84 0.88 0.84 0.91 0.94 0.89
CSRHub product rating 0.24 0.36 N/A 0.21 0.19 0.40 0.10
wRatings quality gap 0.36 0.41 0.41 0.37 0.38 0.10 0.32
J.D. Power customer satisfaction index N/A N/A 0.86 0.96 0.94 0.90 0.87
CSRHub + Sustainalytics product rating N/A N/A 0.33 N/A N/A N/A N/A
Employee Engagement and Development 0.68 0.64 0.66 0.62 0.61 0.61 0.69
Burning Glass Institute, Harvard Business School and Schultz Family Foundation: American Opportunity Index N/A N/A N/A N/A N/A N/A 0.46
Glassdoor engagement 0.91 0.91 0.88 0.90 0.91 0.93 0.94
Glassdoor principles 0.94 0.93 0.92 0.92 0.92 0.93 0.93
Glassdoor confidence 0.79 0.83 0.84 0.83 0.85 0.88 0.84
Indeed: Work Wellbeing N/A N/A N/A N/A N/A N/A 0.73
Payscale pay differential 0.56 0.56 0.58 0.60 0.60 0.57 N/A
Payscale job satisfaction 0.74 0.75 0.71 0.70 0.69 0.68 N/A
CSRHub comp & benefits 0.39 0.41 0.47 0.52 0.38 0.43 0.40
Kununu overall 0.42 0.69 0.68 N/A N/A N/A N/A
Innovation 0.53 0.69 0.71 0.77 0.74 0.71 0.71
Clarivate number of inventions 0.79 0.79 0.83 0.80 0.76 0.75 0.82
Clarivate rate of patent abandonment 0.62 0.80 0.78 0.70 0.75 0.65 0.68
Clarivate trademark applications 0.76 0.79 0.73 0.72 0.76 0.80 0.75
Clarivate trademark registers 0.73 0.73 0.69 0.65 0.67 0.71 0.73
Clarivate R&D spending 0.72 0.76 0.71 0.80 0.89 0.89 0.89
wRatings innovation perception 0.18 0.23 0.17 0.26 0.25 0.10 0.26
On a ā€œMost Innovativeā€ list 0.38 0.44 0.39 0.52 0.49 0.50 0.56
Handfield supply chain innovation 0.02 0.55 0.37 0.52 0.46 0.45 0.45
Patent Value N/A 0.81 0.82 0.80 0.79 0.75 0.79
Burning Glass technology postings N/A 0.70 0.75 0.63 0.54 0.23 0.30
Burning Glass R&D postings N/A 0.78 0.82 0.61 0.57 0.40 0.23
Social Responsibility 0.77 0.75 0.73 0.76 0.79 0.84 0.80
CSRHub ESG absolute 0.92 0.94 0.92 0.92 0.91 0.92 0.89
CSRHub ESG relative 0.89 0.89 0.87 0.90 0.90 0.89 0.85
Sustainalytics ESG management absolute 0.90 0.89 0.87 0.86 0.83 0.81 0.81
Sustainalytics ESG management relative 0.90 0.86 0.84 0.86 0.83 0.79 0.80
HIP Investor ESG 0.84 0.86 0.86 0.86 0.87 0.86 0.86
Korngold + HIP shared value 0.74 0.84 0.82 0.84 0.84 0.82 0.68
Handfield supply chain social responsibility 0.20 0.67 0.49 0.56 0.33 0.39 0.47
HIP Investor SDG Rating N/A N/A N/A N/A 0.92 0.91 0.91
Financial Strength 0.64 0.63 0.71 0.59 0.47 0.45 0.43
Market share (= revenue/industry revenue) 0.26 0.13 0.32 0.36 0.27 0.49 0.39
3-year total shareholder return N/A N/A 0.66 0.55 0.50 0.52 0.53
5-year total shareholder return 0.40 0.47 N/A N/A N/A N/A N/A
Operating ROIC 0.91 0.94 N/A N/A N/A N/A N/A
Return on assets 0.90 0.90 N/A N/A N/A N/A N/A
Return on common equity 0.72 0.79 N/A N/A N/A N/A N/A
Earnings for common shareholders 0.23 0.44 N/A N/A N/A N/A N/A
Economic spread (= ROIC ā€“ WACC) 0.88 0.93 N/A N/A N/A N/A N/A
Accounting profit N/A N/A 0.84 0.86 0.86 0.83 0.83
Economic profit N/A N/A 0.84 0.86 0.91 0.83 0.85
Dimension loading on Effectiveness Indicator loading on Dimension 2017 2018 2019 2020 2021
Customer Satisfaction 0.55 0.57 0.48 0.58 0.62
American Customer Satisfaction Index 0.79 0.93 0.85 0.84 0.85
Temkin customer experience 0.86 0.81 N/A N/A N/A
Net Promoter Score 0.92 0.84 0.88 0.84 0.91
CSRHub product rating 0.25 0.36 N/A 0.21 0.19
wRatings quality gap 0.36 0.41 0.41 0.37 0.38
J.D. Power customer satisfaction index N/A N/A 0.86 0.96 0.94
CSRHub + Sustainalytics product rating N/A N/A 0.33 N/A N/A
Employee Engagement and Development 0.66 0.64 0.66 0.62 0.61
Glassdoor engagement 0.92 0.91 0.88 0.90 0.91
Glassdoor principles 0.94 0.93 0.92 0.92 0.92
Glassdoor confidence 0.79 0.83 0.84 0.83 0.85
Payscale pay differential 0.57 0.56 0.58 0.60 0.60
Payscale job satisfaction 0.75 0.75 0.71 0.70 0.69
CSRHub comp & benefits 0.40 0.41 0.47 0.52 0.38
Kununu overall 0.43 0.69 0.68 N/A N/A
Innovation 0.64 0.69 0.71 0.77 0.74
Clarivate number of inventions 0.81 0.79 0.83 0.80 0.76
Clarivate rate of patent abandonment 0.62 0.48 0.78 0.70 0.75
Clarivate trademark applications 0.77 0.79 0.73 0.72 0.76
Clarivate trademark registers 0.73 0.73 0.69 0.65 0.67
Clarivate R&D spending 0.72 0.76 0.71 0.80 0.89
wRatings innovation perception 0.18 0.23 0.17 0.26 0.25
On a ā€œMost Innovativeā€ list 0.38 0.44 0.39 0.52 0.49
Handfield supply chain innovation 0.10 0.55 0.37 0.52 0.46
Patent Value N/A 0.81 0.82 0.80 0.79
Burning Glass technology postings N/A 0.70 0.75 0.63 0.54
Burning Glass R&D postings N/A 0.78 0.82 0.61 0.57
Social Responsibility 0.76 0.75 0.73 0.76 0.79
CSRHub ESG absolute 0.92 0.94 0.92 0.92 0.91
CSRHub ESG relative 0.90 0.89 0.87 0.90 0.90
Sustainalytics ESG management absolute 0.91 0.89 0.87 0.86 0.83
Sustainalytics ESG management relative 0.91 0.86 0.84 0.86 0.83
HIP Investor ESG 0.84 0.86 0.86 0.86 0.87
Korngold + HIP shared value 0.75 0.84 0.82 0.84 0.84
Handfield supply chain social responsibility 0.20 0.67 0.49 0.56 0.33
HIP Investor SDG Rating N/A N/A N/A N/A 0.92
Financial Strength 0.63 0.63 0.71 0.59 0.47
Market share (= revenue/industry revenue) 0.28 0.13 0.32 0.36 0.27
3-year total shareholder return N/A N/A 0.66 0.55 0.50
5-year total shareholder return 0.38 0.47 N/A N/A N/A
Operating ROIC 0.90 0.94 N/A N/A N/A
Return on assets 0.90 0.90 N/A N/A N/A
Return on common equity 0.79 0.79 N/A N/A N/A
Earnings for common shareholders 0.43 0.23 N/A N/A N/A
Economic spread (= ROIC ā€“ WACC) 0.87 0.93 N/A N/A N/A
Accounting profit N/A N/A 0.84 0.86 0.86
Economic profit N/A N/A 0.84 0.86 0.91