Chief Executive Launches 9th Annual Best Companies for Leaders Survey

What makes a good company for leaders? Having a robust leadership management program is by far the single most important strategy for companies that want to remain on the cutting edge and ahead of their competitors.

In 2005, in which the inaugural ranking appeared, Procter & Gamble CEO A.G. Lafley told Chief Executive magazine that P&G’s “secret sauce” was its robust leadership management program. In fact, P&G’s strategy for personnel growth—on which Lafley spent one-third of his time and effort—was so pervasive throughout the organization that Lafley felt it would be difficult for any competitor to replicate it.

With its brands in five different sectors across every country in the world, “We have so many opportunities to move managers around, across geographies and businesses … our diversification really helps us,” Lafley said.

P&G’s system is particularly well organized and deeply adopted. However, some semblance of it can be found across all leading firms today. Companies that make the annual top 40 list—produced as part of a Chally Group Worldwide global leadership research study in partnership with Chief Executive magazine—have many of the same qualities in common, including a complete, across-the-board commitment to their strategy, coupled with passionate CEO dedication to own the process of cultivating and grooming all employees below the chief level.

While human interaction is key, the most successful companies also automate as much of the process as possible, using HR management and data analytics software to stay on top of the best employees and potential leaders, to ensure consistency of their programs across their enterprise and to match the right individuals to the right opportunities when they become available.

To qualify as one of the 40 best companies for leaders, organizations with at least $1 billion in revenue are scored on five key criteria:

1. Having a formal leadership process in place;
2. The commitment level of the CEO to the leadership-development program, as measured by the percentage of time spent;
3. The depth of the leadership funnel, as measured by the percentage of senior-management positions filled by internal candidates, as well as the percentage of middle-management positions filled by internal candidates;
4. The number of other companies that report recruiting (or attempting to recruit) people away from the company being evaluated; and
5. A shareholder value-performance metric based on 10-year growth or decline in market capitalization.

Rankings are also affected by a company’s reputation among its peers as a source for well-rounded talent. The percent of senior management recruited from an internal talent pools is another criterion. As a clear indication of the escalating importance of leadership-development processes, half the companies on the 2014 ranking were new to the list.

Chief Executive’s 2015 Best Companies for Leaders, produced in partnership with Chally Group Worldwide, will be published in the January/February 2015 issue of Chief Executive magazine. The survey opened Monday, August 18th and runs through early October.

Each year the research study identifies an area of concentration to focus on more particularly. Previous reports have highlighted Public versus Private company best practices; HR versus CEO viewpoints on leadership development; and the unique impact of the Millennial generation as they assume leadership roles. This year’s report will focus on the unique challenges in leadership in the Sales function.

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Past Honorees: Best Companies for Leaders

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