There's much more to leadership than the vision and charisma of the CEO. The most effective form of leadership is grassroots leadership: The companies with the most confident and committed leaders, deepest in the ranks, are the companies that win.
Royal Dutch/Shell Group, a gigantic organization in one of the world's most basic industries, has maintained a spirit of growth and innovation in part through its GameChanger program, which gives in-the-trenches innovators the resources and the freedom to maneuver outside of the established hierarchy. Nucor, a best-of-breed company in another basic industry, is justifiably famous for pushing decision-making authority deep into its ranks and looking for frontline employees and middle managers who work with their brains as well as their brawn.
Martin Sorrell, CEO, WPP Group
For eight years, Fast Company has scoured the world to identify and chronicle "fast companies" -- organizations that embody the attributes that define the best ways to compete, work, and win. The 25 companies listed below represent the best of all of the companies we've written about. Their stock-market performance over one-, three-, and five-year periods speaks to the enduring value that they have created. As a group, these 25 companies posted an average stock-market return of 111% over the past five years. By contrast, the Dow Jones Industrial Average lost 9% of its value over the past five years.*
| Company | Location | Stock-market Performance | ||
|---|---|---|---|---|
| 1-Year | 3-Year | 5-Year | ||
| Amazon | Seattle, WA | 79.2% | -61.9% | 222.9% |
| Apollo Group | Phoenix, AZ | 46.0% | 309.3% | 244.7% |
| Cemex | Monterrey, MX | -40.2% | -21.3% | -22.0% |
| Cisco Systems | San Jose, CA | -16.4% | -82.3% | 17.2% |
| Commerce Bank | Cherry Hill, NJ | -11.8% | 114.6% | 98.7% |
| Dell Computer Corp. | Round Rock, TX | 2.4% | -49.6% | 59.8% |
| eBay Inc. | San Jose, CA | 56.7% | -2.1% | 991.5% |
| Electronic Arts Inc. | Redwood City, CA | -0.2% | 65.5% | 152.7% |
| FedEx Corp. | Memphis, TN | -1.2% | 42.4% | 53.1% |
| Harley-Davidson Motor Co. | Milwaukee, WI | -30.2% | -3.6% | 134.1% |
| Hindustan Lever Ltd. | Mumbai, India | -31.7% | -40.2% | -12.1% |
| IBM Corp. | Armonk, NY | -22.1% | -33.3% | 48.8% |
| Krispy Kreme Doughnut Corp. | Winston-Salem, NC | -14.7% | 267.1% | NA |
| Microsoft Corp. | Redmond, WA | -15.0% | -54.2% | 6.7% |
| Nucor Corp. | Charlotte, NC | -38.4% | -23.6% | -32.4% |
| Pixar Animation Studios | Richmond, CA | 46.1% | 54.1% | 54.9% |
| Progressive Corp. | Mayfield Village, OH | 9.4% | 143.2% | 37.7% |
| Royal Dutch/Shell Group | London, UK | -24.2% | -27.2% | -28.7% |
| SEI Investments Co. | Oaks, PA | -37.1% | 39.6% | 126.2% |
| Southwest Airlines | Dallas, TX | -22.6% | 2.2% | 59.3% |
| Starbucks Coffee Co. | Seattle, WA | 8.8% | 13.0% | 119.3% |
| Wal-Mart | Bentonville, AR | -11.0% | -7.2% | 106.3% |
| Washington Mutual Inc. | Seattle, WA | 8.1% | 101.8% | 8.4% |
| Whole Foods Market Inc. | Austin, TX | 25.1% | 172.3% | 67.0% |
| WPP Group | London, UK | -50.8% | -67.6% | -5.3% |
| FC25 | -3.4% | 34.0% | 111.0% | |
| DJIA | -22.0% | -26.1% | -9.0% | |
*A note on methodology: Returns calculated as of April 1, 2003. Composite performance reflects an unweighted average of stock values of the 25 fast companies compared with the DJIA, which is itself an unweighted average of 30 stocks. Data from SmartMoney.com and Dow Jones.
Keith Hammonds
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