Recognizing excellence and identifying models of outstanding small and midsize workplaces has been central to Winning Workplaces’ work since 2003. This year we have partnered with The Wall Street Journal to identify 15 exceptional small organizations – public, private and nonprofit – that have created supportive, productive and engaging work environments and are also successful, growing concerns.

These firms have been selected from the largest pool of applicants ever. We received 850 nominations, and 437 organizations completed more lengthy applications. Winning Workplaces winnowed the pool to 35 finalists, who were further scrutinized through a series of interviews with randomly selected employees, customers and business advisors.

The 15 Top Small Workplaces were selected by a panel of eight judges selected for their expertise in small business and workplace issues. The judges were Colleen Barrett, President of Southwest Airlines; Georgia Berner, President and CEO of Berner International; Peter Cappelli, Director of the Center for Human Resources, Wharton School, University of Pennsylvania; Judith Cone, Vice President, Kauffman Foundation; Tim Faley, Managing Director, Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies, University of Michigan; Ken Lehman, Founder and Chairman, Winning Workplaces; Michael Mulqueen, Brigadier General, U.S. Marine Corp., retired; and Jack Stack, President and CEO of SRC Holdings Corp.

The 2007 Top Small Workplaces embody a cross-section of small business, representing 13 industries and 12 states. They are relatively mature – the average age of their businesses is 31 years. They have an average of 138 employees and the mean revenues for 2006 were a bit more than $32 million. The 2007 winners are:

What separates the winners from the applicants? Some of the differences are quantifiable. The winners have lower employee turnover (8 percent in 2006 versus 18 percent for applicants), higher tenure (seven years versus five years for applicants) and more hours devoted to training and development (for example, 144 hours in employees’ first year versus 93 hours for applicants). Eighty percent of them open their books and share financial information with employees; half have employee stockholders.

However, the data tells only part of the story. The more compelling case for how these companies are different emerges in the qualitative responses to essay questions and from interviews with those who know the companies well. From them a number of themes emerged that demonstrate that these organizations understand that employees are critical to the success of the business and underpin the business model. To sustain their competitive advantage, these small companies have wisely invested in developing their staff and intentionally built supportive and flexible workplaces. They actively involve employees in issues that affect the success of the business and their work lives.

One theme is that these companies take the long view of their business and focus on sustainability, both when the business is challenged and when it is growing rapidly. Point B Solutions Group offers a good example. Founded in 1995, the Seattle-based project management firm started out small but quickly grew to over 300 associates, spurring the opening of three more West Coast locations. This launched an ongoing dialogue among employees and managers about how to preserve the company culture, its core values and the emphasis on relationships that had made it a success. As a result, the company structured small, special interest, virtual “communities” for associates to use for networking and sharing strategies. These supplement the collaborative teams that work on client accounts and provide another way for employees to build relationships, share ideas and feel connected to the business.

Another theme among the winners is a belief that the business’s future lies in its current workforce – and, relatedly, that the effort to grow leaders from within is entrusted primarily to the business leaders, not Human Resources. Common among the winners is a learning environment that sets high expectations while encouraging risk taking and providing ongoing support.

Gentle Giant, a moving and storage company based in Massachusetts, embodies this approach. After feedback from an employee survey showed that they desired more opportunities to discuss professional progress with a mentor, the enterprise responded by initiating a regular dialogue on the topic between managers and employees. The firm also created a job ladder in which skill sets and compensation levels for members of the moving staff were clearly outlined. An employee of Gentle Giant stated that the firm’s President, Larry O’Toole, believes the core purpose of the business is “to develop leaders.”

You can learn a lot more about our 2007 Top Small Workplaces winners and finalists by attending our conference this week. By attending, you’ll not only meet these folks up close and see how they’ve run successful small firms, you have the opportunity to network with other great leaders of small businesses across North America that are redefining what it means to be small and thriving.

Conference attendees will receive in their program material a summary report of the 2007 Top Small Workplaces data, which we’ll address more thoroughly in our Pre-Conference workshop on October 3. I hope you can join us as we amplify the best practices of some of today’s most innovative and productive small organizations.