What makes a "Best in Class" organization?

What company is not considering how to be a "Best in Class" company in 2016? A silly one. "Best in Class" companies have everything an organization could want...success, sustainability, and innovation. These companies understand the key ingredient to being successful and how important it is to achieving results. Hopefully, this ingredient is no surprise to many of us, but do many of us understand the reasoning behind its value and ways to cultivate this ingredient so that your organization can generate the results it desires.

Can you guess what ingredient is most crucial when achieving organizational success?

You got it......the EMPLOYEES!

"An organization, no matter how well designed, is only as good as the people who live and work in it." --Dee Hock

The term "employees" encompasses EVERYONE that works for the organization from the janitor to the CEO. When we say things such as "the organization tends to do this or that," we refer to the organization as a living being. Technically, organizations are not living beings, however since they are comprised of human beings (employees) working together to accomplish a goal, organizations tend to behave and have characteristics of humans, particularly the ones that work for it. This is the crucial reasoning behind why employees are so vital to the success of an organization, because the organization would not exist without the employees that create their products, sell their services, or manage them. Since organizations do not exist without employees and organizations tend to take on the behaviors and characteristics of the employees that work for it.....is it not logical that organizations should strive to have motivated, intelligent, and creative employees who are proud and happy to work for their organization? Of course they should!

Although not all companies are putting great efforts into finding, developing, and keeping these types of employees, most are doing something that they believe is accomplishing one of these tasks. Unfortunatley, many times these efforts go in vain because they may not provide what the employees truly want or need. Companies that meet their employees' needs tend to achieve organizational success, sustainability, and innovation; whereas companies that miss the mark do not. Let's look at some ranking scales to identify which companies in 2015 were "Best in Class" and which ones missed the mark.

"Best in Class" Companies

Organizational Success

Although there are different definitions for what makes an organization successful, there are a few characteristics that we can agree on. The majority would likely say that profitability would be the most significant factor in organizational success. That perspective has its validity, however some companies may be profitable because they use cheaper labor, materials, or services. When looking at the list, there are a few "Most Profitable" companies that have not had a great reputation for being a "Best in Class" organization, such as Exxon (Read more) and Walmart (Read more and more). Therefore, profitability can not be the only deciding factor for organizational success.

*Most Profitable: 1) Apple, 2) Exxon, 3) Wells Fargo, 4) Microsoft, 5) JP Morgan Chase, 6) Berkshire Hathaway, 7) Chevron, 8) Walmart Stores, 9) Johnson & Johnson, 10) General Electric (Fortune, 2015)

Potentially, another characteristic of organizational success may be how people in the community feel about the product. Most have heard the tail of Tylenol in 1982 and recalling about 31 million bottles while losing of more than $100 million dollars, but their reputation for caring about the community before the product puts Johnson & Johnson still on the most profitable list this year (Read more). When a community feels that a company cares more about the people than making money, the community tends to admire that company/brand and feel that it is a valuable brand to use. As a result, a company that is admired and considered valuable to the community is likely to be very profitable. Let's consider the companies that earned "Most Admired" around the world and "Most Valuable Brand".

*Most Admired: 1) Apple, 2) Google, 3) Berkshire Hathaway, 4) Amazon.com, 5) Starbucks, 6) Walt Disney,7) Southwest Airlines, 8) American Express, 9) General Electric, 10) Coca-Cola. (Forbes, 2015)

*Most Valuable Brand: 1) Apple, 2) Microsoft, 3) Google, 4) Coca-Cola, 5) IBM, 6) McDonald's, 7) Samsung, 8) Toyota, 9) General Electric, 10) Facebook. (Forbes, 2015)

If we use the combination of characteristics to identify organizational success, we start to get a clearer picture of what it may mean to be a "Best in Class" company. When only considering these two characteristics in organizational success, it is clear that Apple is in the lead as the most admired and valuable brand that is the most profitable. The only other company to make all three lists was General Electric, however it was further down in rankings. Two other companies fit both characteristics: Microsoft made the most valuable brand and most profitable, while Berkshire Hathaway made the lists for most admired and most profitable. Therefore, considering profitability and community admiration/value provided a clearer picture of what companies have achieved organizational success.

Thus far, organizational success has included in its definition profits and community admiration, which are both external perspectives. A key perspective is missing in the equation. How do the people who make up the organization think and feel about the organization and working for it. This is a key perspective that is missing from many analysis of organizational success. Employees that are happy and proud to work for their organization tend to perform at a higher level whiile producing higher quality results. Let's consider the employee perspective by adding "Best to Work For" to the organizational success equation.

*Doing Most to Make Employees Happier: Google, SuperMedia, Unisys, GE Capital, Rockwell Collins, Ernst & Young, DynCorp, Applied Materials, Coca-Cola, AECOM Technology (Forbes, 2012)

*Best to Work For: 1) Google, 2) Boston Consulting Group, 3) Acuity, 4) SAS Institute, 5) Robert W. Baird, 6) Edward Jones, 7) Wegmans Food Markets, 8) Salesforce, 9) Genentech, 10) Camden Property Trust. (Fortune, 2015)

*Best Employers (USA): 1) Google, 2) Costco Wholesale, 3) Marathon Petroleum, 4) The Container Store, 5) LL Bean, 6) Baxter International, 7) BMW Group, 8) Shaw Industries, 9) Wegmans Food Markets, 10) Harley-Davidson (Forbes, 2015)

*Best to Work for: 1) Google, 2) Bain & Company, 3) Nestle Purina PetCare, 4) F5 Networks, 5) Boston Consulting Group, 6) Chevron, 7) H E B, 8) In-N-Out Burger, 9) McKinsey & Company, 10) Mayo Clinic (Glassdoor, 2015)

Despite considering several sources, Google was considered the "Best to Work for" across the board and it was their 6th year on the charts in Fortune. In 2012, Forbes ranked Google as #1 in "Doing the Most to Make Employees Happier" and apparently it is working. Google has made every list (admired, valuable brand, best to work for, doing most to make employees happier) except "Most Profitable", which may provide evidence for why profitability alone can not determine organizational success. Overall, Google won by a landslide and as a result is one of the most admired and valuable brands in the world. So what is Google doing different that some other companies may not be doing? Here are some of the top reasons (in no order) employees said they loved working for Google.

*Death benefits, free shuttle, free food and drinks, maternity (18wks) & paternity leave (6wks), innovation budgets, showers on campus, people, business, and technology of working at Google, the mission, sneak peak of the future (using own products), they care about your well-being, yearly stock refresh, health insurance, and career perks (Inc., 2104).

Generally, organizations assume that employees simply want more monetary compensation for their time. Google has gone out of its way to identify and meet their employees needs by providing what matters most to employees. Employees work to take care of themselves and their families so they want what they deserve so Google provides them with great pay, health insurance, family leave, death benefits, stock, food, transportation, and showers. Employees want to interact with others to achieve goals so Google provides them with great people, business, and technology to do that. Lastly, but many times most importantly, employees want to contribute to something bigger than themselves so Google gives them a mission, innovation budgets, and a sneak peak at what the future could be someday. Google provides for their employees so their employees put their all into their work and are proud to be part of the company. This makes Google a "Best in Class" company.

Chevron was another company that demonstrated why being a "Best to Work For" company has its perks, since it made both the "Most Profitable" and the "Best to Work For" lists. Chevron has ranked in the top 25 high for internship opportunies, work-life balance, compensation & benefits, career opportunies (Glassdoor, 2014-15). Companies that take care of their employees in these ways tend to have loyal and happy employees that want to do a good job; and that results in being one of the "Most Profitable" companies in 2015. Chevron also demonstrates "Best in Class" characteristics.

On the other hand, two other companies are recognized for trying to meet employee needs, but did not make the list for "Best Companies to Work For". Both AECOM (AE Technology) and General Electric (GE Capital) were on Forbes (2012) list for companies "Doing the Most to Make Employees Happier" but were not on any "Best to Work For" list. This could be a prime example of organizational policies intending to meet employee need, but potentially missing the mark. Not only did AECOM not make the "Best to Work For" list, it was 7th on the "Worst to Work For" list only 3 years later (24/7 WallSt, 2015). Only 41% of employees would recommend working there to a friend and has a 2.6 rating on Glassdoor (Glassdoor, 2015). AECOM is not a bad company, but somehow in its' efforts have not met their employees needs in a way that hits home for them. Organizations can invest time and money into employee resources and if they are not aligned they may not make the impact the organization is intending.

*Worst to Work for: 1) Express Scripts, 2) Dillard's, 3) Kmart, 4) Forever 21, 5) Xerox, 6) Sears, 7) AECOM, 8) DISH Network, 9) Ross, 10) Dollar General (24/7 WallSt, 2015)

General Electric (GE Capital) did not make the "Best to" or "Worst to" work for list, even though it was noticed for "Doing the Most to Make Employees Happier" just a few years ago. However, General Electric has still shown characteristics of organizational success as it made Forbes' Top 10 "Most Profitable", "Most Admired", and "Most Valuable Brand". GE is known as a very ethical company and 81% of GE employees would recommend working there according to Glassdoor. This is a prime example of how organizational success is hard to measure with only one characteristic and how multiple characteristics can help to hone in on which companies are considered "Best in Class".

Sustainability

Another characteristic of a "Best in Class" company is being a sustainable organization. Sustainability refers to the ethical managment of profits, people, and the planet. More specifically, the management and coordination of environmental, social and financial demands and concerns to ensure responsible, ethical and ongoing success (Read more). Sustainability is another important factor that organizations do not always spend enough time considering. Now a days, many people are starting to consider how companies impact the environment and communities in which they operate, then using their dollars to support the more sustainable companies. Here's the list of companies for:

*World's Most Sustainable: 1) Biogen Idec, 2) Allergan, 3) Adidas, 4) Keppel Land, 5) Kesko, 6) Bayerische Motoren Werke (BMW), 7) Reckitt Benckiser Group, 8) Centrica, 9) Schneider Electric, 10) Danske Bank (Forbes, 2015)

BMW made this list, as well as, Forbes' list for "Best Employer in USA". According to Glassdoor, 81% of employees would recommend working there. BMW has a found a way to meet their employees need and remain on the cutting-edge of sustainability showing that any company can invest in employees and succeed.

Innovation

Another main characteristic that "Best in Class" companies experience is the ability to be continuously innovative. Companies that value employees also tend to experience more innovation. Let's look at the lists that rank the most innovative companies:

*Most Innovative in the World: Tesla Motors, Salesforce, Alexion Pharmacuticals, Regeneron Pharmacuticals, ARM Holdings, Unilever Indonesia, Incyte, Amazon, Under Armour, BioMarin Pharmacuticals (Forbes, 2015)

*Most Innovative in the World (by # patents granted): International Business Machines Corporation (IBM - 3,059), Samsung (3,052), Canon Kabushiki Kaisha (1,782), LG (1,263), Google (1,083), Sony Corporation (1,074), Microsoft (1,037), Qualcomm Incorporated (1,034), Kabushiki Kaisha Toshiba (1,022), Panasonic (896), Apple (780) (INC., 2015)

Salesforce demonstrates how being rated one of the "Best to Work For" companies has its benefits, as it is also ranked #2 for "Most Innovative" company. When looking at employee reviews, most employees recommend others to work there and say it is one of the best decisions they have made. Companies that invest in their employess remain innovative because they typically are incorporating employees feedback in changes. Other companies that made the "Most Innovative" list and at least one other list were: Amazon (most admired), Samsung (most valuable brand), Microsoft (most profitable & valuable brand). These companies may also be in the running for "Best in Class" organizations, however they would be beaten out by companies that also make the "Best to Work For" companies.

Organizations may find multiple ways to identify and meet the needs of their employees, however if they do not satisfy the needs of employees in a way they need then it is less likely that the organization with reap the benefits. "Best in Class" companies are not only successful and profitable, but care about their employees and do what is necessary to meet their needs.

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