The long run
Five that survived say focus and flexibility are the keys to consistent performance
For two tumultuous decades, through technology crashes, housing busts, and recessions, the Globe 100 has chronicled the state's changing economy with its annual ranking of top-performing public companies in Massachusetts. Over the years, minicomputer firms vanished and medical-device companies emerged, manufacturing lost out to software, and software gave way to biotechnology.
Through it all, there's been one constant.
Well, actually five.
Five companies have made the list in each of the past 20 years, a testament to vision, innovation, and execution. They are the financial firms Eaton Vance Corp. and State Street Corp., both of Boston; defense contractor Raytheon Co. of Waltham; retailer TJX Cos. of Framingham; and the uniform-service company UniFirst Corp. of Wilmington.
Such consistent performance isn't easy. Think of former Globe 100 companies such as Digital Equipment Corp., which collapsed and disappeared. Or signature firms such as Bank of Boston, John Hancock, and Gillette Co., gobbled up in mergers. Or even top-performing companies like Waltham maker of analytic instruments Thermo Fisher Scientific, which had a bad year or two. Thermo, which made the list 19 times, missed in 2000.
"It's really about an ethic of continuous improvement," says Donald Rosenfield, senior lecturer at MIT's Sloan School of Management, "and always being willing to take the next step to get better."
Consider TJX. The off-price retailer tests 50 to 60 ideas each year to improve operations and stay abreast of consumer tastes. In recent years, for example, it identified growing consumer interest in shoes, jewelry, and accessories, particularly handbags, then expanded space for these items at T.J. Maxx and Marshalls stores. Sales of jewelry, accessories, and footwear rose 6 percent in 2007.
"It's changing with changing tastes," says chief executive Carol Meyrowitz. "But within that, we're always trying to get the right quality, brands, fashions, and value. That's our mantra."
Like TJX, the other companies have guiding principles. They are as simple as "Focus" at State Street, "Innovate" at Raytheon, and "Make them customers for life" at UniFirst.
Eaton Vance, which specializes in stock and bond investments aimed at minimizing taxes, has developed new investment vehicles in response to changing markets, demographics, and regulatory and legal climates. Still, says chief executive Thomas E. Faust Jr., a basic principle remains: "A steadfast commitment to being long-term investors."
"You can't ignore the short term," Faust says, "but you have to avoid doing things that will hurt you in the long run."
But maintaining guiding principles while adapting to new circumstances can be tricky, analysts say. Holding too tightly to the past can be disastrous. So can plunging into unfamiliar territories. As firms adapt and grow, analysts say, they should build on their expertise and knowledge.
State Street provides an example. The firm is a global leader in managing assets and transactions for mutual funds and institutional investors. Last year, it bought Investors Financial Services, which provides similar services to private-equity funds. The result: State Street extended its core expertise into a new market.
"Our secret weapon is focus," says chief executive Ronald E. Logue. "We only do two things, asset service and asset management, and we've been sharpening that focus since the 1980s."
Still, firms have to be ready to shift focus, says William H. Swanson, chief executive at Raytheon. Digital, after all, focused on minicomputers, but missed the PC revolution.
At Raytheon, Swanson says, a "culture of innovation" has allowed the 86-year-old company to move from vacuum tubes to advanced missile technology that recently tracked and destroyed a crippled satellite in space.
"It's always moving, trying to push the envelope," Swanson says. "Twenty years from now, I want you to be asking, 'What's it like to be in the Globe 100 for 40 years?' "
Robert Gavin can be reached at rgavin@globe.com.
