Good morning.
This year, Fortune 500 companies, in total, represent two-thirds of the U.S. GDP with $18 trillion in revenue, up 13% from a year ago. But what about progress when it comes to leadership and purpose?
“These Fortune 500 companies earn top marks for leadership,” a report by my colleague Lance Lambert, delves into how companies fared on a particular metric—Return on Leadership (ROL).
Fortune partnered with Indiggo to publish the 2023 ROL100 Ranking based on the top 100 companies in the Fortune 500. ROL is a metric that drives and measures key components vital to activating and maintaining the momentum of change for today’s leaders.
“There’s a positive correlation between financial success and purpose-driven leadership,” Lambert writes. “Top-ranked ROL100 companies outperform lower-ranked companies in terms of revenue, profit, and growth.”
For its leadership, Microsoft landed the No. 1 ranking on the ROL100 list.
“Year to date, Microsoft's stock price is up 39% as investors come to the realization that the Seattle-based software and cloud computing giant is going to make serious noise in the A.I. space,” Lambert writes.
How did the tech giant earn the top spot on the list? “Microsoft CEO Satya Nadella has put purpose at the forefront of their business, according to Indiggo's data,” Lambert writes. “In particular, Microsoft received the No. 2 rank for ‘purpose,’ the No. 3 rank for strategy,’ and the No. 4 rank for ‘alignment.’"
Along with Nadella, Microsoft EVP and CFO Amy Hood has long been vocal about having a focus on culture.
“I define my role as making Microsoft a place our customers, partners, and employees want to pick every day,” Hood said at Fortune’s Most Powerful Women Summit back in 2018. “If you do that, you also create a culture that you want.”
Think about yourself first, she said, and what you can do today to create clarity, generate energy, and deliver to your team and partners. “The more you model that mindset as a leader, the more people aspire to do that too,” Hood said.
Another finding from the research: It pays to have forward-thinking leadership. The EBITDA per employee of companies in the top 25 of the ROL100 is more than double that of companies in the bottom 25 of the list, for the third straight year.
You can find out what other companies made the ROL100 list for leadership here.
Sheryl Estrada
sheryl.estrada@fortune.com
