Going back at least as far as the early 1980s, to the study done by Tom Peters and Bob Waterman in the now classic In Search of Excellence, and continuing today in the work of many management gurus, a small subset of companies have been identified as “best practice” organizations.

I’ve spent a good part of my professional life studying and consulting with such organizations. I’ll tell you a couple of interesting things about best-in-class companies:

One, if you go back and look at the early lists, some of the companies identified even just a few years ago are struggling. Others have been acquired by other companies, are in bankruptcy, or out of business altogether.

Getting there, staying there

One of the companies identified in the early-to-mid ’90s as an icon of the design and implementation of “high performance teams” is none other that the now infamous (and gone) Enron. In fairness, most of those on the consensus A-list companies have continued to thrive, and are as laudable now as they were then. But some have lost their luster. Getting to the top and staying there are two different things.

Here’s my second observation about best-in-class companies: I can tell you there are rainy days in Camelot; in some cases there are tropical storms, and they can be long and intense. Up close, the excellence is sometimes more apparent than real, in terms of the actual daily climate/culture, and even in terms of measurable business performance.

A third point: there is really no single culture in any company. Sub-sections of every organization have their own local culture — which may at times be widely at variance with the overall culture.

Is excellence an illusion?

Is organizational excellence an illusion then, the stuff of nice inspirational books?

I would not go so far. I think there are some great places to work at any point in time — companies, divisions, offices, departments, crews which are world class, or close to it. But… the great press that the “show dogs” receive isn’t always matched by daily reality or long-term durability.

So what do we really know about excellent organizations? When they are there (or close), what is the snapshot like? What is the organizational “right stuff”? I would highlight the following personality characteristics of excellent organizations:

1 Without exception, they are well led.

It is a great truism that “leadership counts.” Good leadership may not be sufficient in and of itself to forge excellence, but it is absolutely and unequivocally necessary.

I’m a big fan of author Jim Collins. In his current bestseller Good to Great he says that, having co-written a book that was fundamentally about leadership (Built to Last), he wanted to come to different conclusions about the reasons some companies chug along as good companies, then burst into the lofty realm of consensus excellence. He didn’t want to write “yet another leadership book.”

But once again, the key was, inescapably, leadership. Clear, focused, visionary, inspiring, engaging and involving, unselfish leadership. If you want insight into the culture of a company or a part of a company, look to the leader.

I once toured an auto assembly plant that, unlike comparable facilities I had seen, was so clean you could literally eat off the floor. When I met the plant manager and commented on how amazingly tidy his shop looked, he beamed and said something like, “Yeah, I guess you can see that I’m a real nut for housekeeping!” Indeed.

2 They are vision-driven.

Effective leaders craft or help craft and communicate a clear and inspiring picture of “where we want to take the organization.” As corny as Vision/Mission/Values statements may seem (and many of them do sound alike), they simply are a common denominator of the best organizations. Vision statements of top organizations don’t usually highlight the “make a lot of money” angle. They inspire others by the grandness of the envisioned future of the organization, not by the promise of big shareholder returns. The money follows rather than leads.

3 They are strategically aligned and highly focused.

The “words on the wall” must have a clear connection with meaningful business objectives, and the strategy to reach them. People out in the field need to understand that by meeting their objectives, they are helping the organization advance toward meeting its broader (and inspiring) objectives. Clear linkage is established between the highest goals and aspirations of the organization and the goals, objectives, and daily actions of people at all the levels of the organization.

4 They scan their environments for opportunities and threats.

Truly excellent organizations resist becoming prisoners of their own success (that most tempting of traps!). They study the market — the changing landscape of competitors, customers, regulatory bodies, employees, etc. — looking for ways to anticipate, adapt, create and take advantage of opportunities, and ways to minimize or avoid threats, or even turn threats into opportunities.

5 Recognizing that change is the great constant, they are flexible, adaptable and nimble.

Excellent organizations structure and reorganize themselves with simplicity. With the ability to anticipate change (scanning), they are able to reconfigure themselves quickly and adaptively. They really do support innovative thinking and targeted experimentation, which is easy to say but very, very hard for most companies to do (as it is for most individuals).

6 They are genuinely team-based.

Everyone talks teams, but truly effective organizations are truly built from them. Real teams are the molecule, the building block of organizational excellence. Individuals organized into teams, and trained to fulfill team-member roles, are part of something larger than themselves — a cohesive unit to which they are committed. And when the teams talk… excellent management must listen.

7 They invest heavily in their people.

Most players in a given industry have similar technology, financial resources, market conditions, etc. It’s the commitment, effort, and performance of their people that make a huge difference. It’s not a mere coincidence that some of the very best-performing companies are also known for being the most employee-friendly. One current example that is getting a lot of positive attention (including being featured in a Harvard Business Review article last year) is SAS, headquartered in the Research Triangle area of North Carolina.

How does your organization — and its approach to safety — stack up against these criteria of excellence?

Remember that these traits of the excellent organization apply as well to excellent departments and teams. What are you doing in your leadership role to make a difference — to help develop these traits in your sphere of influence?