From the March 2010 issue of Entrepreneur

When you encounter greatness, you know it. It's one of those things--all the parts move in perfect harmony. Greatness is hard to come by but unforgettable when it happens. In business, this is especially true.

When you walk through the doors of a great company, you know it instinctively--just like you know John Coltrane's greatness when you hear it. There's an energy, a buzz and a distinct character that conveys confidence, curiosity, uniqueness and trust. It flows from the CEO to the receptionist and into the customer base.

But how do you become great?

It starts at the top. What we learned doing research for this issue about being great is that leadership is everything. Great leaders create great companies, and great companies have cultures that emphasize and reward excellence.

We decided to dig into the notion of cultures of excellence to discover what common traits link great companies. We partnered with San Francisco-based Great Place to Work Institute to get a deeper understanding of what makes a great company (See Jason Daley's story, "Creating a Culture of Excellence"). The institute combed through data and culled a list of 10 small and medium-sized companies that are considered great places to work.

"Great companies do things that might surprise you," says Sarah Lewis-Kulin, the institute's vice president of knowledge development. "It's not what you expect--it's not about paying employees more money or installing a basketball court. It's about creating relationships with employees and customers based on trust. Management's credibility and a company's success hang on that one idea--trust."

But how do you measure it? That's the thing that bugged me. How do you audit greatness? Lewis-Kulin explains it this way: "When we look at large companies with publicly traded stock, the great ones always outperform the market. So yes, it is measurable."

And according to Lewis-Kulin, "While the ratio of how significantly the best companies have beat the market has varied year to year, the fact that they have outperformed the market has been consistent through good economies and bad."

Creating a culture of excellence is key to all entrepreneurial endeavors and the foundation of greatness. It will help you outperform your competitors, retain talent and reinvent your industry.

Amy C. Cosper,
Editor-in-Chief
Follow me on Twitter, @ EntMagazineAmy