Corporate Bravery is exhibited by rising above a series of fear factors that exist across Corporate America. Companies that excel are able to excel in each of the following key fear factors. The proof is in the performance. The 'Brave 25' have outperformed the major indexes by at least 2x over the second half of 2014 and first half of 2015. Visit our results page to see more about the returns of the 'Brave 25'.
1. Management - Brave companies don't just have great managers but they create an environment that allows measured risk taking, create engaged employees that are committed to a mission that is congruent with their own mission and values. One of the ways we measure this for the purposes of the Brave Rankings is by looking at the Best Worplaces list published annually by Forbes Magazine and the annual rankings of the best employers by Glass Door. These two rankings together include many factors of workplace strength including CEO leadership, career opportunities, compensation, and work-life balance.
2. Individuality - A level of inclusion for one's individuality is a key way to keep employee's from feeling personal fear in the workplace. According to a Deloitte & Touche study from 2013 an incredible 61% of employees were covering some aspect of their individuality. This keep employees from feeling a clear connection to the company's mission and ultimately hurts engagement. One of the ways that we measure a company's commitment to respecting individuality is by considering the list of the most Diverse Workplaces according to Diversity Magazine.
3. Politics - Brave companies have clearly defined resource allocation processes. They have few organizational silos and management or employees that treat their role within the company as stewards and not owners. You can read more about how to make the political process constructive inside your organization by visiting our SlideShare on corporate politics. While this aspect is difficult to measure, great workplaces tend to have a lower level of bad, engagement-killing political behavior. So we considered the Fortune Magazine Best Workplaces along with the annual study performed by Glass Door to score out of our companies based on their workplace culture.
4. Competition - Brave companies are aware of the competition but are not driven by their competitors' actions. Brave companies chart their own course, secure in the knowledge of their competitive strengths and their customer's needs. Intuitively you may know when a company is leading the industry rather than playing from behind but it can oftentimes be difficult to quantify. For the Brave Rankings we used America's Most Admired Brands list from Fortune Magazine as our proxy.
5. Regulation - Heavily regulated industries tend to drive more organizational fear, but even in the midst of heavy regulation companies can be brave. Brave companies get ahead of regulation and stake out a market position that capitalizes on where the market will move after regulatory oversight. They also work with regulators in advance to shape regulation and rule-making as opposed to scrambling to get compliant at the final hour. To quantify this aspect of bravery or fear we used the Mercatus Center's RegData Regulatory Database from George Mason University to score each company's industry based on the amount of regulation (federal & state rules).
6. Legal Environment - Companies or industries that have a higher level of involvement with the legal system or give their in-house Legal Departments or Chief Legal Officer an increased amount of day to day decision making authority tend to have higher levels of organizational fear. Brave organizations don't make hasty decisions out of fear of concern for large legal judgements but instead put legal opinions in a balanced position weighed against other business concerns.
7. Audit / Control - Brave organizations seek compliance, but not in a way the abdicates accountability for compliance to a centralized group of second-guessers. Rather they provide authority and demand accountability in a way that is embedded in their culture rather than additional layers of control. Higher amounts of Audit & Control functions typically follows the amount of industry regulation and as a result the scoring from the Mercatus Center's RegData system was used to score this component of corporate bravery.
8. Media - Brave companies are not worried about media coverage and they certainly understand that negative comments are not the end of the story. Rather they are active with public relations in a way that shapes perception of their brand and their day to day activities. They approach communications with candor and clarity and always in alignment with their core values. As a result we look to the Rittenhouse Rankings, a quantification and measurement system that codes & scores key words, phrases and concepts in executive communications. This system reveals the relative strength or weakness of intangible drivers of business success such as leadership and the integrity of the corporate culture, stewardship, emotional intelligence, execution prowess, and strategic awareness.