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Meet India’s Most Admired Companies 2013

Posted by Gaurav Lahiri

Gaurav Lahiri

The world’s most successful investor, Warren Buffett, has famously said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

At Hay Group, we tend to agree with him – in today’s volatile business environment, we have all come to learn from experience that financial statements and tangibles are not the only mark of an organization’s success. The value of intangible assets, such as talent, employer brand, and corporate reputation has come to take centre stage in creating the environment for an organization’s competitive advantage and market differentiation.

And this year’s ranking of India’s Most Admired Companies (IMAC), a study conducted by Hay Group in association with Fortune India, is reflective of that. Based on a unique methodology where an organization’s own peers rank it on a scale of ten parameters, this study is a report card on corporate reputations, and is in the second year running. This year, business solutions provider Tata Consultancy Services (TCS) has emerged as India’s Most Admired Company 2013 – overtaking last year’s winner, group company Tata Steel.

Endurance, which is one of the parameters on which the study’s participants are ranked on, has a big part to play in TCS’s achievement – given that India’s largest IT services exporter has plodded on despite the uncertain business environment, to register growth ahead of the industry average (CAGR). As we move across the order, FMCG major Hindustan Unilever (HUL) has been ranked second, while conglomerate ITC and TCS’s competitor, Infosys, have been ranked joint third.

The interesting thing is that some of the names featured in the IMAC 2013 have remained constant since last year’s ranking – for example, TCS, HUL, ITC, Larsen & Toubro, and the 2012 winner Tata Steel. Even though there has been phenomenal change in the business environment in this period – from boom to recession and back to recovery, varying across industries, many of India’s Most Admired Companies have remained a constant presence while others (such as Infosys, SBI, and ONGC) have ascended and staked their own claim to Most Admired status.

Regardless of business conditions, India’s Most Admired continued to shine. What made these companies so enduring? We find that regulars at the top of the IMAC rankings maintain their place by scoring consistently well in all of the ten attributes that the survey covers. These are the evaluation criteria that industry peers use to assign a ranking to the participants, and they go beyond the scope of financial soundness, to include holistic aspects such as corporate governance, innovation, and talent management.

Essentially, these ten factors differentiate India’s Most Admired Companies, from their peers. Let’s have a look at them:

  1. Endurance: The consistency of overall performance [financial and others] that companies displayed during the recession or other lean periods
  2. Corporate governance: Efforts made to ensure consistent management, cohesive policies, accountability, etc.
  3. Performance and investment value: How well the company has performed over a long period, and how much value it has created for its stakeholders
  4. Financial soundness: The strength of a company’s finances, operational cash flows, and overall asset management
  5. Innovation: A company’s ability to understand its environment and customers and offer path-breaking products and services not available in the market
  6. Product and service quality: The value a consumer derives from a company’s products and services, over and above what a competitor delivers
  7. Leadership: The extent to which the top management plays a formative role in charting a firm’s strategic direction
  8. Talent management: How successfully a company has been able to hire, harness, and retain top talent, as well as build a next generation of leaders
  9. Corporate social responsibility: When a business ensures compliance with the law, ethical standards, and social norms, and its actions have a positive impact on the environment, employees, and other stakeholders
  10. Global business footprint (new parameter introduced in 2013): A company’s effective positioning across countries which allows it to increase the magnitude of its business activities, expand market base, diversify resources, and increase revenue and profit

Where does your company stand on these? We’d be happy to hear your feedback, as we will continue to share more details and analysis about India’s Most Admired Companies 2013.

 

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