September 28, 2015

Founder, CEO and President of Rittenhouse Rankings – and my fellow candor advocate – L.J. Rittenhouse has released her annual Candor and Culture Survey Report. Not surprisingly, the companies with the highest ratings on candor in their culture, and by their leadership, out-ranked other “less candid” companies included in the survey of 100 Fortune 500 companies. However, it is impressive to note that those candor-focused companies outpaced the S&P 500 by an average of 7.4%. The company also reports:

The highest ranked companies have consistently outperformed the market on average by 6.0 percent over the past decade and by 9.5 percent over the past five years. The bottom-ranked companies have on average underperformed the market by 3.4 percent over the past decade and by 5.6 percent over the past five years. ~ Rittenhouse Rankings, Inc.

Rittenhouse systematically quantifies candor by “awarding points for informative disclosure” and deducting points for what she calls “FOG” – fact-deficient, obfuscating, generalities. Her survey considers everything from corporate communications (shareholder letters, earnings teleconference calls) to social activism (disclosing GMOs, and removing pollutants.)

If you follow this blog regularly – or even if you’ve just noticed the title, Uncommon Candor – you get that I believe candor to be both crucial to business success and relatively rare in today’s corporate environment. I’ve seen how improving our practice of candor builds velocity and yields unprecedented results.

What I find so compelling about Rittenhouse’s work is how quantifiable the relationship between candor and success can be. Undeniably, she shows that a culture of candor directly impacts the bottom line in a positive way.

Because Candor scores are based on executive language, they offer unique insights into the “soft” drivers of performance and culture such as empathy, emotional honesty and intelligence, authenticity, connectivity, creativity, innovation, consciousness, purpose, moral authority and courage. ~ 2014 Rittenhouse Rankings Candor and Culture Survey Report

In the report, Rittenhouse includes how CEOs and investors can use the survey on candor to make smarter decisions about the culture they’re fostering or investing in. Ultimately, I see Rittenhouse’s report as a tool for consumers and job-seekers.

Consider JetBlue, Honeywell and Sherwin-Williams, the top 3 (in that order) on the Rittenhouse list. JetBlue’s web site shows extensive efforts dedicated to a Customer Bill of Rights, Corporate Social Responsibility (with focus on Youth & Education, Communities, and Charitable Partnerships), and Sustainability (Offsetting CO2, Climate Change, Nature, Reuse/Recycling, and Sourcing are just some of their key efforts). Honeywell claims recognition as one of FORTUNE’s World’s Most Admired Companies, and is a Top Military-Friendly, Minority Engineer Top 50 and Woman Engineer Top 50 Employer. Sherwin-Williams lists “Integrity” as the top value in its Code of Conduct.

Each of these feel-good traits appears to translate to something much more tangible – proven market success.