The best of the best: lessons from the top performing American corporations, 1954‐2005

Abstract

PurposeTo derive and apply a new composite performance metric to top performing US companies in order to identify consistently excellent performers and explain their success over the last half‐century. The ten firms topping the list for this new composite performance metric represent the “best of the best” of American corporations during the fifty‐one years of Fortune magazine listings.Design/methodology/approachData for this analysis were gleaned from the annual lists of the top 500 companies reported by Fortune from 1954 to 2005. Using Fortune's annual rankings of companies according to the four performance criteria of return on investment/equity, net profits, total assets, and revenues dimensions, the authors firstly computed, for each of these four performance dimensions, an average ranking based on a company's particular rank each year and its total number of appearances during the 51‐year period; and then, secondly, by assigning each of the four performance criteria a weight reflecting its importance, derived a composite (total) score based on a company's average ranking on all four criteria.FindingsFor a modern US based company to be successful year after year it must consistently achieve two of four performance criteria included in the composite metric. The results of the longitudinal analysis illustrate the significance of using a variety of metrics, or a composite metric, to gauge corporate performance.Research limitations/implicationsThe limitations of the findings are that assigning different weights to the four performance criteria would yield a somewhat different composite ranking.Originality/valueThis paper is the first to derive and present a composite performance metric, compiled from Fortune's annual rankings of four critical performance variables and representing an aggregated weighted ranking of American companies over a half‐century.