Effectiveness is defined as “doing the right things well.”
The ranking includes U.S. companies whose shares are traded on the New York Stock Exchange or Nasdaq Stock Market and meet the criteria related to their value and prominence outlined below. This measure aims to evaluate how effectively a company adheres to a core set of principles established by the late Peter Drucker, a professor, consultant, author, and longtime columnist for multiple journals and news organizations.
This model, created and developed by the former Dean of the Drucker School of Management, Larry Crosby, provides valuable insights into specific companies and entire industries over time. To produce its rankings, the institute has built a statistical model that uses multiple firm-level indicators to assess five dimensions of corporate performance using a list of hundreds of companies:
These principles act as touchstones for five dimensions of corporate performance: customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength.
How We Define Effectiveness
In 1970, Peter Drucker wrote a letter to a corporate leadership team, and it’s a powerful reminder of what he meant by the term effectiveness. Drucker wasn’t interested in management style, organizational charts, or slogans. He focused relentlessly on whether leaders were clear about objectives, whether responsibility was truly pushed down, and whether people were being judged on results rather than effort.
He warned that decentralization fails when it becomes an excuse to weaken accountability rather than strengthen it. He also insisted that top management’s real job was not to do everything, but to set direction, standards, values, and priorities with discipline.
That same logic sits at the heart of the Drucker Institute’s Corporate Effectiveness Rankings today. Effectiveness is not about optics or speed. It’s about making human strengths productive, insisting on results, and building institutions that can actually function over time. More than fifty years later, Drucker’s standard still holds.
Podcast
This first-of-its-kind series is inspired by the ideas of Peter F. Drucker – the father of modern management – and features leaders from standout companies included in the ranking of America’s “Best-Managed Companies.”