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Sunday, August 28, 2011

LOVE AND ADMIRATION


What companies, if any, do you admire? Why do you admire them? What is there to admire in a corporation? Do they possess qualities similar to those of people that you admire?

When we consider the traits of people that we admire descriptive terms such as: perseverance, the ability to remain calm and cool during hard times, being open minded, or being able to adapt to different situations come to mind. Can we translate such attributes to a corporation? Maybe.

Sometimes it’s a case of an iconic figure who sets the pace for the corporation as a whole.  Business leaders such as Steve Jobs, Warren Buffett and Bill Gates immediately come to mind.

I remember back when Jack Welch was chairman and CEO of General Electric, it was the most admired company in the country. Now, perhaps not so much. What changed?

I recently took a look at the FORTUNE’s 2011 list of the most admired companies in the world.  I’ve glanced at these lists over the years and it just got me thinking: What companies do I admire and why?

Personally I love companies that have a reputation for quality or for treating the customer well. Prime examples of that are Nordstrom’s or Coach Inc. Another criteria would be financial strength although I’d have to question HOW any company built its’ coffers. I’m thinking Exxon and Walmart here. I’m not throwing stones, just throwing it out for thought and discussion.

What about the most innovative companies? To me Apple is tops in that category. What about company’s that make the best use of their assets?  Which company’s are considered to be the most socially responsible?

These days I am impressed by organizations that provide me with a memorable shopping experience.  I started using Zappo’s in the early 2000;s to buy shoes. Who would have thunk it, buying shoes via the internet? Somehow Zappo’s made it all work beautifully. 

I’ve been grocery shopping all my life, but somehow Trader Joe’s has figured out how to turn a mundane chore into something I actually look forward to. Apple seems to have a knack for providing products/services that you never even knew you needed before they made it.

Years ago I remember watching a story on either 60 minutes or 20/20 about a manufacturing plant that suffered a devastating fire. It just about gutted the building. The owner of the business made an amazing decision. He decided to continue to pay ALL of his employees their regular salary during the rebuilding process.  

The owners’ position was that he already possessed great wealth($750 million or so, I believe) and there was only so much he could ever want to spend his money on.

Imagine that. Instead of going all “Gordon Gekko” about the situation, this man opted to take the high road. I really admire that.

Another example. The Spungen family founded their Chicago ball-bearing business in 1941. When the company owners sold their operation they made a decision to share the wealth with their employees.

In 2008 they were bought out by a Swedish company and instead of keeping all of the money to themselves, they gave away 6.6 million dollars to about 230 of their former employees.

Some employees received a few thousand dollars while others got six figures.
The checks were based on years of service.

In a  final example, an Australian mining magnate named Clive Palmer gave 50 Mercedes-Benz B-Class 180s sedans to his most-valued employees as a Christmas bonus. He also gave all 750 of his longtime workers a holiday trip to Fiji. The final touch: He also threw in a $2 million holiday party.

He said he wanted to thank his staff for the $200 million in profit his company earned from a nickel refinery he had recently purchased for about $10 million. His holiday gift-giving earned him the nickname “St. Nickel.”

These examples send a powerful message: that workers play a large role in creating wealth and that they should share in the spoils.  Once again, I personally find this to be an admirable trait.

I personally believe that there are times when people get the admired player and the dominant player confused. If you’re the dominant player in your industry, that’s great but it doesn’t necessarily mean that you possess admirable qualities. Think Standard Oil back in the late 19th and early 20th century.

A winning combination for me would be a company that was successful, possessed a great reputation for quality, set a high standard for performance but also had a conscience toward both employees and the larger community.

Here’s a quick peek at the top 10 companies on FORTUNE’s list:

Apple
No mystery here. Whether we’re talking itunes, iphones, ipad, ipods, Apple is clearly an example of an innovative, creative company that is constantly setting super high standards and then raising the bar from there. "firing on all cylinders."

Apple is simply amazing. They constantly release great new products while continuing to set the bar high for tech companies across the board.  They are truly game changers.

Google
Where would we be without Google? When a company or product becomes a verb, that’s when you know it’s a game changer. Searching for some vital or esoteric bit of information? No problem. Just “google it”

They maintain top position as the king of search. The company is also spreading through its deep dive into devices with its free, open-source operating systems.

According to Google, they activate devices loaded with their Android operating system at a rate of over 10 million every month!

Berkshire Hathaway
I don’t know if this ranking is more about the CEO or the company as a whole. Clearly Buffett is an iconic figure whose reputation precedes him in all business-related matters.

This company is synonymous with its CEO Warren Buffett. He remains an admired leader, both for his judgments about stocks and for having built a huge operating company besides.

Buffett has developed a practice of picking up stocks when they're out-of-favor, betting on them to rise when trouble recedes. His most recent purchases have included Johnson & Johnson, Burlington Northern and Bank of America.  And we’re talking tens of billions investment dollars.

Southwest Airlines
This one really confused me. One reason is that I’m used to airlines being vilified and additionally simply because I don’t know a heck of a lot about Southwest.

Since it started offering low-cost flights in the 1970s, Southwest Airlines has been a more consistent performer than most airline companies. Recently, airlines in general have been receiving a black eye in the press for tacking on fees to compensate for rising fuel prices, but Southwest has remained one of the world's most admired with its’ “No Change Fees” and “Bags Fly Free” policies.

Southwest generated strong earnings in its most recent quarter, with profits up 13% from a year earlier. According to Morningstar analysts, “Southwest is the healthiest company in the airline industry”.

Procter & Gamble
Procter & Gamble is the world's largest consumer-products company, with annual sales around $79 billion. P&G has been ranked first in its industry every year that it's been in the survey since 1997.

P&G's products, including Tide, Crest, Charmin, Bounce, Downy and many other household staples, form a strong foundation to weather volatile prices down the supply chain.

Coca-Cola
Coke is a beverage colossus to put it mildly. They have continued to expand across China, and has earned positive attention for its environmental efforts by conserving water.

With a portfolio of more than 3,500 beverages including diet and regular drinks, fruit juices, waters, sports and energy drinks, teas and coffees, milk and soy-based beverages.

Coca-Cola also continues to stand as one of the world's great brands, in a league with corporate giants like Nike and GE.

Amazon.com
In December, Amazon announced that the 3G Kindle was its best-selling item ever. Who knew? I still remember the good days of the dot-com bubble when Amazon had yet to record a profit. Everyone wondered if they ever would. Well, wonder no more.

From a personal point of view I really enjoy the shopping experience I receive via Amazon. Books, DVD’s and small appliances are my usual products of choice when I head to their website.

Meanwhile, Amazon has invested in new technology and continues to see growth. Soon, Amazon.com will begin operating an app store for Android.

FedEx
I still remember when this company was known as Federal Express.  This is another example where the company has become a verb. Sending  a package out for overnight delivery became known as “fedexing” it. Built in 1971 in Memphis, TN.  Before Federal Express hit it big back in the 1980’s I don’t recall anyone pushing to have packages shipped overnight. That was a big time game changer.

Microsoft
Still living in the shadow of its’ iconic founder, Bill Gates, Microsoft continues to operate as a dominant player in the computer industry. In the past couple of years Microsoft has rolled out strong new products. Search engine Bing, Xbox Kinect, and its Windows Phone 7, are a few examples of Microsoft’s expansionary ambitions.

According to Microsoft, it has sold 300 million licenses for the Windows 7 operating system to date.

McDonald's
I haven’t eaten at McDonald’s for about 20 years but I have to admit that given the fact that they are a large corporation with a huge target on their back, they continue to grow and innovate. Whenever someone discusses the evils of fast food, who is the big satan that receives the most blame? You guessed it: McDonald’s.  Consider the implications of having to operate in that kind of environment.

Even amid an enduring fast-food backlash it’s difficult to attack a company that consistently produces healthier new items on the menu: salads (with Newman's Own low fat dressing!), wraps, oatmeal, and apple dippers.

Plus, the chain constantly adds to its Dollar Menu, catering to those who are feeling the pinch of the recession.

McDonald's also operates a wide range of charity programs, including teacher awards and youth basketball games. You’ve got to give them credit.

What companies do you admire and why?  What companies have you admired in the past and which ones do you admire today?


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