From the smallest startups to the largest companies by market capitalization, every company wants to be great. From unlocking immense value for customers to creating an outstanding workplace culture, great businesses are true game-changers. Yes, they are exceptionally rare, but they exist throughout the world.
Yet whether you are searching for those great companies or are looking to create one yourself, one question may be at the top of your mind. That is: what do “great companies” actually look like? Better yet, how can I create one?
While there isn’t one unifying magic formula, there are several key characteristics that identify truly great businesses. Incorporating these characteristics into your own business, you can increase your chances of transforming your simply good company into a great company.
Characteristics of Great Companies
To start, one of the most important variables in creating a great company centers on one word: people. According to Jim Collins in his seminal book Good to Great, the best companies are helmed by “Level 5” leaders. These leaders have a unique mixture of extremely strong will and personal humility. They have the drive to overcome substantial obstacles, and when they do, they don’t hesitate to share the credit with their entire team.
This kind of leadership is extremely rare. Often, CEOs and upper management take credit for themselves or refuse to take any responsibility for failure. Level 5 leaders are so effective because they create a culture of hard work and shared victories. It makes it easier for employees to stay motivated and do their best work—even under immense pressure.
It isn’t just leadership, however. Great companies place an extremely high priority on hiring the right people. They recognize that finding and retaining the best talent is going to help them eclipse their competitors and best serve their customers. While they may find that talent in different ways, they ensure that their employees are motivated, challenged, and incentivized to accomplish the company’s goals.
As Collins says, great companies also prioritize the truth. Even though it may be uncomfortable, truth is more important than awkwardness or hurt feelings. After wrestling with the brutal truth, the entire company can move forward, correct problems, and better serve their customers. A great example of this is Bridgewater, a Connecticut-based hedge fund. Opting for radical transparency, Bridgewater has been able to consistently beat the market and satisfy its investors.
There are several things that great companies don’t do. For instance, they don’t rely on technology to start the transition. They recognize that technology is a tool and that it is more effective to make the transition occur more rapidly. Along with this, great companies don’t look for quick fixes; rather, they relied on consistently great work over long periods.
Making the Transition to Greatness
Considering the above traits of great companies, there are several steps you can take today to transition your company to greatness.
First, be laser-focused on your company’s culture. Whether you work in a commodity business or an extremely creative business, your culture is going to play a huge role in your success. Corporate cultures aren’t the same, but make sure that you are incentivizing traits like candor, hard work, positive feedback, and experimentation.
From culture, you should also constantly be experimenting. Looking at great companies like Apple and Facebook, for instance, you can see how experimentation and iteration can pay off. Companies that hesitate to experiment or punish failure will simply be left behind. Even if the experiment itself doesn’t work out, you and your employees can gain some extremely valuable data that can be used in the next experiment. Consistently getting real-life feedback and data will help you create products and services that truly resonate with your customers.
Finally, be patient. Your company isn’t going to transform into a great one overnight. To accomplish this goal, you’ll need to consistently put in the work and prioritize the long-term. While it may not be easy, it is an effective way of becoming a truly great company.
Following these insights and pieces of advice, you will be substantially closer to becoming the great company that you have always envisioned. I wish you the best of luck!