Winning Workplaces recently completed, in conjunction with FORTUNE Small Business, the third annual “Best Bosses” recognition program. This project, once again, was a joy to work on because it allowed us to become acquainted with some of today’s best and brightest small business leaders. Each of these entrepreneurs has a unique and inspirational story. And we are proud and excited to be able to share them with you.

This year’s 15 Best Bosses were selected by a panel comprised of FSB editors, Winning Workplaces board members, academics, a venture capitalist, an entrepreneur and a 2004 Best Bosses honoree.

The 2005 winners are:

In many respects, the economic landscape remains as challenging now as it did a year ago and our Best Bosses’ stories continue to be ones of survival and risk-taking. Above all else, they are about the role progressive workplace practices play in meeting today’s business challenges.

For example, Patty McManus fostered a culture of continuous improvement at Olsson Associates by practicing open-book management and awarding employees approximately 85 percent of company profits through an employee stock option plan. Her people think and act like owners because they understand how their work impacts the bottom line and they know they have a stake in the firm’s success.

This approach has served the organization well. Olsson Associates is a consulting engineering firm and much of its work is for municipalities. Their clients have been under increasing financial pressure in recent years due to lowered tax revenues and federal funding diverted to other issues such as the war in Iraq. As a result, the firm and its competitors find themselves fighting for a piece of a much smaller pie. The Olsson’s ownership culture has helped them improve efficiency and better manage costs, allowing them to remain competitive while avoiding the layoffs and office closings many of their competitors have experienced in recent years.

Colin Angle of iRobot struggled for years to find a product that would take hold in the marketplace. Angle worked hard to create a business culture centered on cooperation, integrity, and openness, one where employees have the opportunity to review their bosses and anyone can suggest a new product. This environment paid off as it was an employee who came up with the idea for Roomba, a robotic vacuum cleaner and the company’s most successful product. Currently, the organization is in the midst of a high-growth period, going from just under $15 million in sales and 100 employees in 2002, to more than $90 million in sales and 160 employees in 2004.

Pamela Davis’ biggest challenge was finding enough qualified people to manage Nonprofits Insurance Alliance Group’s rapid growth. The company is located in Santa Cruz, Calif., an area with no large insurance carriers to draw experienced staff from, so the organization has committed to aggressively training junior employees while providing flexible scheduling and giving employees a voice in decision-making. This approach has helped them keep turnover low and maintain the level of qualified manpower necessary to accommodate the growth they’ve experienced. What’s more, they’ve done this while continuing to provide a high level of service; the firm’s customer retention rate regularly exceeds 90 percent annually.

Not surprisingly, each of the Best Bosses beat their industry averages for turnover. In fact, an ability to recruit and retain top talent is perhaps the greatest commonality among this year’s winners. This is no coincidence, for these leaders, in both their policies and the way they manage, have displayed an appreciation for the value of attracting and keeping top talent. They have each embraced the core principles of a Winning Workplace:

  • Trust, Respect & Fairness
  • Open Communications
  • Rewards & Recognition
  • Learning & Development
  • Teamwork & Involvement
  • Work/Life Balance

In doing so, the 2005 Best Bosses have not only created great places to work, but successful organizations. All 15 experienced growth in 2004. Keith Smith’s 180solutions, Inc. grew a robust 177 percent last year. In fact, what the Best Bosses reaffirm is that being fair, honest, and ethical contributes to business success. This year’s winners prove that the best and brightest leaders recognize that it takes the best and brightest employees to succeed.