The Drucker indexes and profitability: a first look

Abstract

The Drucker Institute has computed metrics regarding customer satisfaction, employee engagement and development, innovation, social responsibility, and financial strength. They currently track 902 firms, and the Wall Street Journal annually publishes the Drucker 250—the top 250 firms based on an overall effectiveness measure. This paper offers the first analysis of whether these indexes can explain differences in the economic performance of business firms. The two main conclusions of our analysis are first, the individual aspects of the Drucker indexes do not always positively impact profit, and second, the impacts differ across industries. Our analysis concludes with possible reasons for the poor results and suggestions for future research.