The 9 Essential Characteristics of a Great Company
“It isn’t any one thing that makes a company great. It isn’t just strategy. It isn’t just leadership style. It isn’t just vision. It isn’t just innovation. It isn’t just tactical execution. It’s all of these; and it’s all of these done consistently well for years.”
—Jim Collins, Beyond Entrepreneurship 2.0
Entrepreneurial leaders — especially those of us who lean toward the visionary archetype — invest a lot of energy in making sure the Work we and our colleagues do aligns well with our Vision. To do this, we constantly talk about the Vision and find ourselves passionately teaching why things matter, pointing out how the things that matter are connected, and explaining how we plan to get from here to there.
We also put our energy into enrolling people in our Vision and bringing them along with us. We want them to be resonant about participating in the Work associated with turning our Vision into reality. We do these things with confidence and humility as we take responsibility for leading the organization on the journey toward building a great company.
Over the years, one of the things leaders have come to appreciate is how important it is to get clear on what matters, making sure everything is as explicit, coherent, and resonant as possible. What follows is a graphical framework representing the divide between clear outcomes and the discord that stems from ambiguity (hat tip for the inspiration to Dan Martel, Founder of SaaS Academy).
So… what does it take to get into the upper right quadrant, where we’re explicitly clear and coherent about our intentions? What are the essential ingredients in this particular recipe for success?
Building a great company comes down to exhibiting nine essential characteristics:
1. Great companies have a reason for being.
Great companies address an enduring societal need. They provide something people want, and that makes life better. Just as importantly, these companies attract and retain members who love what the company does and why it does it. These team members genuinely want to help the company play what Simon Sinek calls an infinite game, one in which the company is focused on building something sustainable that will benefit future generations. Plain and simple.
How companies make life better is what we call a compelling Purpose/Passion/Just Cause. At Ninety, ours is “To help leaders build extraordinarily productive, humane, and resilient companies where people are focused, aligned, and thriving.” As a SaaS company whose platform helps leaders of small and midsize businesses build great companies, we’re obsessed with the art and science of all things related to organizational development.
2. Great companies excel at being trustworthy.
Great companies are very clear, implicitly and explicitly, on what it means to be trustworthy. Trust starts at the top of the organization and resonates through the senior leadership team (SLT) to frontline team members and, from there, to every Ideal Stakeholder (more on that below). Accordingly, every one of those Ideal Stakeholders believes the company can be trusted along the three dimensions of trust:
- Character: Character-based trust starts with presuming integrity, honesty, fairness, and authenticity for both the company and its stakeholders. By entering into a relationship anticipating these character-based traits, we teach our brains to have confidence in the people upon whom we rely. But we also recognize that if those attributes are not consistently demonstrated, then trust can be lost on either side, damaging relationships or ending them altogether.
- Competency: Competency-based trust is earned through displaying the skills, knowledge, and experience necessary to satisfactorily perform roles and responsibilities. Providing value to those around us is core to the human experience. Showing up, completing our end of agreements, and committing to improvement are all ways to cultivate a trusting relationship.
- Connection: Connection-based trust is developed through an investment of time and resources, compatible interests, aligned goals, and mutual respect. This is the glue that holds long-term relationships together. It’s best to see these relationships grow naturally over time, but they can be accelerated when a proper cultural fit is identified between companies and their stakeholders.
Some might think, “Yes, we all want to be trustworthy. But it’s hard to quantify, so how can you determine the impact of that attribute?” The research firm Deloitte Insights writes that enterprise trust is an organization’s “invisible yet priceless asset.” And they expand upon that in numbers1. Here are a few:
- Highly trusted companies outperform low-trust companies with up to 4x amplification of market value.
- Out of customers who highly trust a brand, 88% bought again, and 62% buy almost exclusively from that brand.
- Organizations impacted by events that compromised the perception of trustworthiness fall 26–74% behind industry peers in value and market cap.
3. Great companies have a very clear sense of who their Ideal Stakeholders are and build high-trust relationships with every one of them.
We believe great companies excel at developing and maintaining high-trust relationships with what we call Ideal Stakeholders (Ideal Team Members/Employees, Ideal Customers, Ideal Vendors, Ideal Investors, Ideal Strategic Partners, and Ideal Communities). Since a company’s Ideal Stakeholders are at the core of its reason for being and, hence, its future, great companies are intentional about which Ideal Stakeholders they attract and retain.
Great companies understand that the wrong stakeholders can distract them, drain their energy dry, hinder progress toward their goals, frustrate their people, and potentially harm their brand.
Ideal Stakeholders, on the other hand, make a great company’s work worthwhile. In the long term, identifying, attracting, and retaining Ideal Stakeholders improves outcomes for all stakeholders by increasing an organization’s ability to:
- Saturate deeper into a desired market
- Retain clients for repeated purchases or prolonged subscriptions
- Improve customer satisfaction and marketing efforts
Great companies have brands that are explicit, coherent, and resonant with their Ideal Stakeholders, and their brand promises can be measured and refined. Great companies can articulate how their brand promises relate to everything they do, and they excel at saying “No” to any activity, stakeholder, or customer that’s incompatible with their brand.
4. Great companies don’t try to be all things to all people.
A great company is clear about what it is (and isn’t) selling. This goes hand in glove with getting clear on their Ideal Stakeholders, as well. And it extends beyond the product or service itself; it’s also about the Unique Value Proposition the product or service represents to make life better in ways other companies cannot.
Typically, a company excels at one of the following value propositions:
- Saving consumers money with the lowest cost
- Improving lives through innovation
- Creating ease of use by providing extraordinary customer service
- Offering a unique feeling by increasing a customer’s status
5. Great companies play the long game or, more likely, the infinite game.
“Infinite-minded leaders understand that ‘best’ is not a permanent state. Instead, they strive to be ‘better.’ ‘Better’ suggests a journey of constant improvement and makes us feel like we are being invited to contribute our talents and energies to make progress in that journey.”
― Simon Sinek, The Infinite Game
It can be argued that good companies play long games, whereas great companies play infinite games. Both good and great companies think well ahead, planning for long-term goals and opportunities that may extend beyond the tenure of their current leadership teams. Great companies have a hierarchy of explicit and coherent goals. They start with what we call Compelling and Audacious Goals (CAGs, typically 5- or 10-year goals) and cascade down to 3-year, then 1-year, and then 90-day goals that collectively provide a clear and compelling story that consistently attracts their Ideal Stakeholders.
6. Great companies are focused.
They have, and adhere to, what we refer to as Focus Filters: a small, essential, and enduring collection of guiding principles and goals which, collectively, are referred to as the organization’s Vision. Focus Filters inform every decision and help companies Get Smart Stuff Done (GSSD), a Core Value here at Ninety.
7. Great companies are well run day to day, week to week, month to month, quarter to quarter, and year to year.
It starts at the top. Great companies are stocked with leaders who have the right mix of competence, confidence, humility, and drive. They’re ambitious on behalf of the company, fanatically driven toward results, and want to see long-term success for the organization.
The organizations they lead are 90% strong across all 9 Core Competencies (Vision, Customer, Goals, People, Culture, Data, Meetings, Process, and Enterprise Value). Having a strong foundation of competencies enables great companies to confidently confront reality and never lose faith in the infinite journey.
8. Great companies are built on agreements.
Great companies turn expectations into agreements, agreements into commitments, and commitments into focus. Agreements, commitments, and focus help build high-trust relationships among everyone in the organization. This, in turn, helps those leaders and team members build proven processes, align on key performance indicators (KPIs), and tackle the work of outlining short- and long-term goals… and the plans to achieve those goals.
9. Great companies are built to last.
The sum total of all the preceding attributes leads to this. Great companies have strong leadership teams and are not dependent on any one or two people to thrive. Their cultures are equally strong, as evidenced by low employee turnover and other markers of “employee satisfaction,” like referring a company to other colleagues who might thrive there or advocating for the company to be formally considered as a Great Place to Work®. Companies that are composed of people who are focused, aligned, and thriving, as individuals and as team members, are the ones that eventually stand out as extraordinarily productive, humane, and resilient.
Resilient means they’re built to withstand adverse economic conditions and other inevitable bumps (or major potholes) in the road. This ties back to how those companies consistently run their operations over weeks, months, and years.
Lastly: Great companies are more than their products and services. Products and services will evolve as life evolves. Great companies are teachers and developers of people, of industries, of communities. Great companies produce leaders who produce leaders who (you guessed it) produce leaders. And, while they endeavor to attract and retain every one of their Ideal Stakeholders, great companies produce leaders who also need to go on and help build another great company… or two… or even more.
1. Importance of Trust In Your Organization | Deloitte US