Best Companies for Leaders

For our latest Best Companies for Leaders feature, Chief Executive has sought to identify those companies that excel in leadership development. In partnership with GrowthPlay (previously Chally Group), a sales and leadership research and consulting firm headquartered in Chicago, we canvas world-class companies through a questionnaire and interviews to learn what they are doing to identify and nurture people three or more levels down the chain from the CEO.

The 2016 final, top-40 ranking consists of public companies with over $1 billion in revenue, and the top 10 on the list scored within several points of one another. We also rank the top 10 private companies. Rankings are affected by a company’s reputation among its peers as a source for well-rounded talent. The percent of senior management recruited from internal talent pools is another criterion.

Similar to 2015, some attrition among last year’s winners explains why previous winners don’t appear on this year’s list. Furthermore, because it would be inappropriate to compare private companies with larger public companies that enjoy greater resources, we rank large, private organizations with in-depth leadership development programs separately. Of the companies surveyed, 83% have headquarters in North America and 71% have international operations.

The majority of industries represented included professional, scientific and technical services (30%); manufacturing (25%); information, media and telecommunications (18%); and finance, insurance and real estate (16%).

For the second year in a row, GE tops the list as the “Best Company for Leaders” with EMC Insurance moving up from No. 4 last year to come in just a fraction below. Hitachi Data Systems
leaped to third, from ranking No. 23 in 2015. Among the remaining top 10, Johnson Controls (No. 5) is new to the list this year, and 3M moves up to No. 8 ranking from No. 11 in 2015. VF Corporation (No. 6) and Dow Chemical (No. 10) both held their rankings in the top 10 listing of companies identified having impressive leadership development processes.

P&G and Deloitte, which normally place in the top two positions among the public and privately held firms respectively, both experienced CEO transitions in 2015. Given that points are allotted for the amount of time a company’s CEO spends on leadership development, their scores would have been a bit lower than normal and this may account for the slippage in rank.

Hitachi Data Systems reported 100 percent internal promotions, conferring the maximum of 25 points, which raised its score significantly. Ecolab enjoyed market cap growth from $7.834 billion to $32.570 billion, which helped boost its overall score. Johnson Controls, Owens Corning and Fluor are all new to the list this year. Stanley Black & Decker returns to the list this year; the premerger Stanley appeared in the rankings several years ago. Their rankings reflect a generous amount of CEO time spent on leadership development, having a formal leadership process in place, the depth of the leadership funnel filled by internal candidates and number of the number of other companies that recruit talent from their company.

Stanley Black & Decker CEO John Lundgren likes to mentor his people, either alone or in groups, and encourages what he calls “boundery-less” behavior. “Our people and our brands, in that order, are our most valuable assets and we are genuinely committed to developing our people to their maximum potential,” he says. “I spend as much time as possible with our early-career, high-potential associates to ensure that they understand our values and our strategy and that they are being given appropriate opportunities to develop their leadership skills. It’s hopefully as motivating for them as it is for me. I always learn something in the process.”

2016 40 Best Public Companies for Leaders

2016 10 Best Private Companies for Leaders