Good qualities leads a company to success. As an investor it is a must requirement to know about the companies and its capabilities before invest to its stock. A company with good growth or growth potential only can give you enormous value to your investment. Identifying excellent companies required considerable efforts and research on various areas where the real success lying.
Here are some important points you should consider and based on this, you can individually determine whether the company is in a groups of best managed or not.
#1. Vision – A companies vision to its business areas and future are the most important factor to its success. A company has enormous capital structure and it does not have any perfect vision to its future, its is a dead company and avoid it. Vision is important than capital. Setting out business targets and achieving the targets time to time showing company has good vision to its future business. Identify such companies.
#2 Business Focus – A company which is identifying and focusing to a business where it has best knowledge, is a preliminary symbol of best managed company. Over diversification is an exact opposite of this and avoid any companies that have over diversified portfolio of products. Focusing on what they best know will always lead companies to put maximum time and research to improve the quality if the product and this will raise the market interest on the product because of its quality as well as lift the value of the company.
#3 Operational Excellence – A quality product with effective production cost is the basic symbol of companies profit and success. Innovative solutions adopting by companies to achieve this goal. A blend of backward integration, competitive sourcing strategies and efficient systems make companies able to reduce costs without compromising on quality. Operational excellence are a necessity to identify the best managed company.
#4 Corporate Governance – A best managed company should have well defined and documented corporate governance policy. These companies always provide required trainings to its senior level people and have mechanism to track the performance of their boards.
#5 Develop leaders from within – Almost all the best managed company has a good practice of developing their leaders have grown from within. Through this process, company receiving the a best experienced personal as well as shoeing their strategy to identify and bring up right personal at right time. This process will increase the confidence and cork competence of their staff. A company with satisfied employees, certainly a best company with best management.
#6 Strong supplier base partnership – A must have quality of a best managed company to grow its business. A company increasingly sharing its vision with its partners and seeking active participation in realizing their growth objectives, should be considered. Good companies will always conduct quality audits to its vendor space and based on that provide the performance appraisals.
#7 Pursue Quality – Value creation will be the basic mantra for best managed companies. To create value, quality should be a focusing area. Most of the best management companies proved their quality by getting the quality certifications and pursuing the standard requirements by the quality systems for ever.
#8 Create value to customer – Best managed companies always innovative to create value to its customers. Such companies have very good research and development facilities to improve its products quality at the maximum. A best R&D facility helping out companies to not only give value to its customers but also finding the cost effective methods to improve the quality of their products and services.
#9 Corporate Social Responsibilities – Companies practicing CSR will always take care of the community around them. Practicing the balance between profitability and social responsibility, a company can comfortably create value of society. There are best examples: with its digital revolution, a company focusing to lift up the living standard of farmers in remote villages and another company contributing to social and economic communities where they operates. Through CSR, a company providing the best to give better life to the weaker sections of the society and raising country’s human development index.
Above are the qualities generally found on best managed companies. Once you identified a company has all the above qualities, you can proceed with investing on it. It will not only provide value to your money but also give security to your investments. Happy investing
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