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
Big deal
S&P Global Market Intelligence's new report, "Market Monitor Generative A.I.," finds revenues of generative A.I. technology offerings are forecast to reach $3.7 billion in 2023 and expand to $36 billion by 2028, with a compound annual growth rate (CAGR) of 58% from 2023 to 2028. The researchers measured and forecasted revenues for 263 software companies, globally, that provide generative A.I. products, including text, images, audio, video, code, and structured data generators. "We anticipate a rapid expansion of the market overall, with some sectors advancing faster than others," Nick Patience, a managing analyst at S&P Global Market Intelligence, said in a statement.
Going deeper
In a new Wharton Business Daily podcast episode, "The Fed Will Welcome Fiscal Restraint Right Now," John Ricco, director of Tax & Budget Analysis at the Penn Wharton Budget Model, discusses the Fiscal Responsibility Act and the Budget Model’s recent assessment of the bill.
Leaderboard
Marc Greenberg was named CFO at Altruist, a digital investment platform. Before joining Altruist, Greenberg spent 16 years in finance and strategy leadership at Pixar, and most recently served as the CFO of Blend where he led the company through critical growth stages and ultimately to their initial public offering in 2021.
Peter Park was promoted to CFO at Electra Battery Materials Corporation (Nasdaq: ELBM), effective July 1. Park will succeed Craig Cunningham, who resigned from his CFO position, effective June 30. Park is a senior finance professional with more than 20 years of experience. He joined Electra in February 2023 and has worked closely with Cunningham through the company’s 2022 year-end and first-quarter 2023 reporting activities.
Overheard
“His actions led me, and I think a lot of other folks in the industry to think about, ‘Hey, are we kind of doing this as much as we should?’ Could we make our companies better by pushing on some of the same principles?…My sense is that there were a lot of other people who thought that those were good changes, but who may have been a little shy about doing them.”
—Meta CEO Mark Zuckerberg, on a recent episode of the Lex Fridman Podcast, gave credit to Elon Musk for kicking off the tech trend of firing middle managers when other CEOs were “a little shy.” Musk fired hordes of middle managers at Twitter after his $44 billion takeover last October. The way Zuckerberg sees it, Musk was right in trying to make the company “more technical” and decrease the distance between engineers and himself, with “fewer layers of management,” Fortune reported.
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