Being a small business I hear the term Fortune 500 being thrown around all the time. As a matter of fact, I read an interesting article this morning by Rick Roberge titled: Are you a Sales Fraud? The article points out how one person could be out of their league trying to jump to a Fortune 100 sales strategy from a $10 million average client revenue position.
This got me to thinking. What does it take to become successful enough to jump into these categories. Then I thought, hmmm what is the true definition of these terms thrown around; Fortune 100, Fortune 500, Fortune 1000? In my mind I thought they had to do with annual billings. So to make sure I was correct I did some research and this is what I found.
Because of how often these are used, I somehow put this idea of being a Fortune XXX up on a self. I thought this was some serious business category that was studdied by MBAs at business school. Since I haven't gone to business school there was a disconnect or assumption on some level. Yes, many MBAs do study the Fortune list looking for ideas to connect and get into this prestigious club, but it is not some formal business category per se. It is however one of the greatest branding concepts/ideas I've run into in years.
Fortune Magazine decided to create a list of top businesses 45 years ago. So they do their research and find and rank the top US businesses. The result is their Annual Issue with the top 500 US Businesses. The top "100" was developed by the reader to create a shorter more managable list to discuss with coleagues. Yahoo states "Essentially, the magazine lists the U.S.-based corporations with the largest revenue in the past year." Fortune uses only publically available data so private companies not on the stock market are removed from this list.
Yahoo goes on to share… "Fortune 500 companies are among the biggest, most profitable, and most powerful companies in America. Talk about profits -- the top company on the list made over $210 billion in revenues! But even the bottom end of the Fortune 500 list isn't too shabby. Newspaper conglomerate Knight-Ridder (ranked #499) and wireless technology company Qualcomm (#500) pulled in over $3 billion each. That's still a respectable sum, especially in a weak economy." This data was pulled from a 2002 blog article, so imagine where things stand now 10 years later. Last year the #1 Wal Mart, made $421 billion in revenues. #500 Seaboard made 4 billion in annual revenues. Wow this is MAD money!
Answers.com shares this definition… "The companies are ranked by 12 indices, among them revenues; profits; assets; stockholders’ equity; market value; profits as a percentage of revenues, assets, and stockholders’ equity; earnings per share growth over a 10-year span; total return to investors in the year; and the 10-year annual rate of total return to investors."
This definition falls closer to what my original thoughts were and makes the whole thing seem a little more complex. And although, doing the work my use all these complex ideas, all we really need to know it this is a top list created by a magazine. Yes they probably labor over this list to make something of value to the reader, and in doing so have created a great brand asset. Because it is so complex, they are able to keep their lead in the marketplace and we do not use some other term.
Think about it, this is product placement at it's finest. This magazine created a list probably as a joke or at least over an employee conversation like "Hey Joe, you know what we should create a list of the top companies. We could use this data for ourselves to better understand what makes the best of the best companies and then try to replicate this for our company." Then in the process it became something they found others would like, Keep in mind this is just my therory, but I can see how something like this could have happened.
Then 45 years latter "Fortune 500" become a revered and covited list to get on. As this happens it pushes Fortune Magazine to the top of the publication world by building a huge loyal following of readers anticipating this list. Over this time they become the thought leaders in "THE top business list" space and no one can or will compete. Beyond this, the list now is apart of everyday business nomenclature.
This is product placement at its finest! You know you are successful at branding when the end user doesn't know they are being branded to nor that they are helping you build your brand just by using the terms "Fortune 100, 500 and 1000." This is really powerful stuff in the branding world and I now have a new respect for Fortune. I have read Fortune over the years, but only for their content, not to understand their branding genius of their business model. I may have to rethink this now. Especially since everyday my job is focused on delivering more and better content.
Although, I have bought and read several issues of Fortune, it is the Inc. 500 that really strikes a cord with me. Could this be because these businesses are smaller and closer to where I am at in the business community? Don't get me wrong, these are still big, highly successful businesses, but I have vendors who have made it in the inc. 500. So I am a little more connected to this group and have always known this was a list from a magazine. I've also looked for opportunities to work with successful companies on this list.
Maybe the name is what threw me off. "Fortune" may be such a solid brand that the ability to become part of everyday business speech was inevitable. IP Attorney's might say this is hurting your brand, but I think the more people use your name the better off you are. However I did not make the connection to this being a magazine list only and so maybe they have something.
Keep in mind the other thing that helped build this brand was… the fact that they did one thing for 45 years. How many people could do one thing for 2 years until they became the thought leader? Not to many and this is why most people will never make the list. Sticking to one thing and becoming very focused is what sets the great apart from everyone else. Just ask Jim Collins (author of Good to Great) or Malcolm Gladwell (author of The Tipping Point).
I hope this article provided you with a better understanding of what the "Fortune 500" term means, a little more than you already knew. I also hopped by sharing this definition I was able to open your eyes to the branding tactics that made Fortune a common term in business.
I then ask…
This is what causes your company to tip into a whole new world of greatness and success. This is the stuff of Fortune 100 companies.
Start applying these ideas and laser like focus to your business and I'll see you in one of the next issues. Good luck and happy branding!