Character, destiny, reputation
What businesses can learn from the World’s Most Admired Companies
U.S. Sen. John McCain’s 2005 book, “Character is Destiny,” was not only a testimony to lives of leaders well-lived, but also a clarion call for how to live life overall.
As he writes, “It is your character, and your character alone, that will make your life happy or unhappy. That is all that really passes for destiny. And you choose it. No one else can give it to you or deny it to you. No rival can steal it from you. And no friend can give it to you. Others can encourage you to make the right choices or discourage you. But you choose.”
In business, this is the time of the year when the editors of Fortune look ahead to the new year and begin the process of assessing the World’s Most Admired Companies, or WMAC.
For more than 30 years, the WMAC has been an in-depth annual ranking process in collaboration with Korn Ferry, the global talent company, of Fortune 1000 and Global 500 companies, in 56 sectors. I had the opportunity to guide a Fortune 200 company through the process for five years, each year advancing up the ranking scale. But it wasn’t one person’s achievement — it was a total enterprise, team effort.
While not for every company, the WMAC assessment process is an informative rubric, because reputation is tangible (“fungible”). As much as 30 percent of a company’s Wall Street value is goodwill.
While there are changes from year to year, the perennial top 10 WMACs have typically been:
4. Berkshire Hathaway
6. Walt Disney
8. Southwest Airlines
10. JPMorgan Chase
There are nine attributes used to rank WMAC leaders in their industries. Despite the size of an organization, or whether it is commercial, nonprofit or public sector, the attributes can assist organizational leaders in devising strategies and tactics to secure their organization’s sustainability and sustainable competitive advantage. They are:
1. Ability to attract and retain talented
2. Quality of management
3. Social responsibility to the community
and the environment
5. Quality of products or services
6. Wise use of corporate assets
7. Financial soundness
8. Long-term investment value
9. Effectiveness in doing business
In show business, there is the saying: “There are no small parts, only small actors.” And so it is in business. There are businesses that think they are small. In that case, they will have a self-fulfilling prophecy. There are small businesses that think big. They are the leaders of tomorrow.
The attributes are scalable. They are particularly important in a hyper-competitive environment for both customers and the talented employees who ensure customers stay loyal. Taken together, they underscore that reputation is a team sport. It’s not the Public Relations Department. It’s not the Human Resources Department. It’s not the Marketing Department. It’s everyone’s Department. It’s everyone’s responsibility.
Most of all, the attributes can inform and guide the character of an organization, and the people who are its heartbeat. And for it to be true, character, values and norms must start at the top. They must be walked, not just talked.
Character is particularly critical at a time of crisis. We only have to reflect on the gas line explosion crisis north of Boston in September to underscore the fact that bad things will happen. What matters is what you do to be prepared.
This is all the more important in the minutes after an incident — the “golden hour,” when actions can make the difference between an incident elevating to a full crisis. To paraphrase Warren Buffet: it can take years to build a reputation, only to have it lost in minutes, or even seconds.
P.S. One business that fulfills the definition of sustainable success is NAI Norwood Group in Bedford. Marking its 50th anniversary in September, Karl and Louise Norwood created today’s era of professional Realtors. Starting from a family-owned dairy and milk delivery company in Milford, they ventured into the real estate business when New Hampshire was still out of reach of Boston.
Guided by virtue ethics since September 1968, they have done the right things, in the right way, at the right time. It has been a delight to watch them evolve and an honor to know them.
A New Hampshire resident and native, Clark Dumont is a Fortune 500 communications leader and principal and founder of Dumont Communications LLC. He can be reached at dumontcommunications.com.