IndustryWeek's 100 Best Managed Companies -- Manufacturings Elite 100

Dec. 21, 2004
IndustryWeek honors Best-Managed Companies for past performance

Some companies will do just about anything to become one of IndustryWeeks 100 Best-Managed Companies. When asked to submit a questionnaire for consideration, representatives from one company volunteered -- twice, actually -- to fly in to our offices here in Cleveland to plead their case. (We turned them down.) Other companies sent videos to tell their stories (please, no cartoons next time). One company, well known for its spices, included an annual report scented with peppermint. (Last years was scented with ground pepper.) Needless to say, the process of selecting our elite group was -- achoo! -- interesting. All sneezing aside, selecting our list of IWs 100 Best-Managed Companies was indeed a challenge. Sure, there were some easier picks, but once we got close to choosing company No. 100, the process became agonizing. How do you tell one twin you love him more than the other? We think you get the idea. In this, our third annual report, we highlight those 100 companies that have demonstrated superior, consistent financial performance. Given the approach of the new millennium and the challenges that will bring, we also recognize those companies that are investing heavily in such areas as change, market development, people, and society. Inevitably, for economic reasons or because the competition was too strong, there were winners from previous years that did not make the final cut this year. That certainly does not mean they are no longer well-managed companies. It simply means that this year they did not pass our subjective and objective tests for superior performance. Twenty-two companies appear for the first time this year, 15 for the second time, and 63 for the third time. Twelve countries are represented. Here, then, is how we determined our list of IWs 100 Best-Managed Companies. The candidate companies were drawn from the IndustryWeek 1000, a list of the worlds largest publicly held manufacturing companies based on revenues. The IW 1000 was published in our June 8 issue. Two companies of the Dun & Bradstreet Corp. -- Dun & Bradstreet and Moodys Investors Service -- supplied the data for the IW 1000. First, the 100 companies chosen as winners in 1997 were considered finalists. Second, using a proprietary financial formula -- created in partnership with Moodys Investors Service and applied by IW -- we selected 100 additional finalists from the IW 1000. We looked at each companys performance in the following areas: profit margin, leverage, sales turnover, inventory turnover, receivables turnover, return on assets, and return on equity. In our judging, we also considered measures such as total revenues, earnings per share, and profit growth. Four years of data supplied by Dun & Bradstreet and Moodys were analyzed. IW also asked 85 international expert panelists, including business leaders, analysts, and academicians, to vote for those companies among the 200 finalists that they believe to be among the best-managed in the world. All IW editors also were asked to complete the ballot. Because panelists and editors had the opportunity to nominate companies in the IW 1000 that did not appear on the ballot, the total number of finalists surpassed 200. Each IW 1000 company had been asked to complete a questionnaire detailing its strongest performance and best practices in the following four areas: investments in people, society, markets, and change. IW reviewed the finalists questionnaires and also consulted its own research on each finalists management practices. Using all of the collected data -- financial-formula results, questionnaires, company information, and expert panelist and editor votes and comments -- IW editors carefully selected the 100 winning companies. In summaries written by Kristin Ohlson, IW details which companies made the list and why. Editorial Research Director David Drickhamer analyzes some of the practices the 100 winning companies have in common. Senior Editor John H. Sheridan describes how companies are preparing for the future by investing in technology and change. Senior Editor John S. McClenahen explains how some of the worlds best-managed firms are investing in new markets. Contributing Editor Shari Caudron details how the worlds best-managed firms are investing in their employees. Senior Editor William H. Miller examines how companies are investing in their communities, society, and the environment. Completing the package is an interview with noted author Christopher A. Bartlett, a professor at Harvard Business School.

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