Measuring culture for strategic success
The intangible nature of culture presents a significant challenge for leaders. When something is difficult to see or measure, it's equally difficult to justify its importance and allocate the necessary resources.
An organisation’s culture, often viewed as a peripheral concern, is a critical catalyst for strategic success. Frequently overlooked or sacrificed in the drive for immediate results, culture fundamentally shapes an organisation's values, beliefs, and behaviours. It is the invisible compass that guides how an organisation operates, influencing its ability to achieve its strategic goals.
A strong, aligned culture is more than just a desirable asset; it is a strategic imperative. It fosters employee engagement and productivity, leading to higher performance, innovation, and ethical behaviours. Additionally, a positive culture enhances stakeholder engagement and satisfaction, strengthening relationships with everyone who works with the organisation.
Moreover, a well-defined culture contributes to a positive organisational reputation, attracting top talent, building trust with external stakeholders and the public, and fostering current employees’ pride, belonging and loyalty to their workplace.
“What gets measured, gets managed.” – Peter Drucker
Given its profound influence on organisational outcomes, it is imperative to assess both cultural strengths and weaknesses and identify strategies to bridge the gap between the current state and desired cultural aspirations.
Measuring culture can be a complex endeavour. Accurately capturing an organisation's existing values, beliefs, and behaviours necessitates a multifaceted approach that combines traditional metrics with thoughtfully designed employee surveys and observations, collecting both quantitative and qualitative data. These include:
Performance metrics: Analysing performance metrics such as productivity, turnover, retention rates and training completion can provide an insight into how an organisation’s culture is influencing employee behaviour and performance.
Employee surveys: Surveys can gather data on how an employee perceives the organisation’s culture, and their fit within it. These surveys typically include questions that delve into perceptions of leadership, support for their career and work, work-life balance, and satisfaction in their roles.
Interviews: These can provide a richer understanding of how an employee feels about where they work, allowing for further exploration of concerns, challenges and opportunities. While these can happen at any time (e.g. regular check-ins or performance reviews), the most valuable insights can come during an exit interview, where a departing employee is more likely to be honest about the company.
Observations: These provide a more unfiltered, direct view into an organisation’s culture than metrics, surveys and interviews. These include observing employee interactions, decision-making processes, communication styles, power dynamics/hierarchies, and organisational rituals (e.g. meetings, celebrations, flexible work arrangements).
Reported harmful behaviours: By providing employees with a safe and accessible avenue to raise concerns or incidents, organisations can gain valuable insights into the prevalence of negative behaviours and the effectiveness of their cultural initiatives.
While each individual measure has its limitations, when used in conjunction, these methods can provide a comprehensive understanding of an organisation's current cultural landscape.
The next steps involve a strategic alignment process. Organisations must carefully consider how their cultural assessments relate to their specific strategic objectives. By identifying which cultural metrics directly impact key goal areas, organisations can pinpoint the areas where cultural improvement is most critical. This enables them to implement targeted cultural initiatives that are directly aligned with their strategic priorities.
Incorporating cultural metrics into key performance indicators (KPIs) is essential for ensuring that culture remains a top priority. By tracking and measuring cultural metrics alongside traditional business metrics, organisations can demonstrate the tangible impact of culture on their overall performance.
Case study
Artemis partnered with a client facing significant cultural challenges within its diverse, specialised workforce. Bullying, harassment, and low employee satisfaction were negatively impacting the organisation's ability to carry out its work and diminishing its reputation with stakeholders and the public.
To address these issues, we implemented quarterly pulse surveys, establishing a baseline measurement and tracking progress over time to account for the dynamic nature of culture. Key metrics included psychological safety, leadership commitment at various levels, net promoter score, and formally unreported harmful behaviours. We then built up the capability of the team, providing survey design, analysis and reporting training, as well as reporting templates, allowing them to continue measuring and responding to cultural shifts well into the future.
We complemented these measures with assessments of training completion rates, collaboration, governance, transparency, and fiscal responsibility to establish comprehensive cultural performance expectations for leadership. By setting KPIs based on these measures, we provided leadership with a clear, data-driven methods for understanding and addressing cultural challenges, and an accountability framework for achieving cultural goals and improving employee satisfaction and safety.
While the seemingly subjective nature of culture can make it challenging to measure, it's crucial to recognise that a misaligned or negative culture can significantly hinder an organization's performance. By implementing effective culture measurement strategies, leaders can gain valuable insights into their organisation's health and take proactive steps to foster a positive and productive work environment. Remember - a culture that's not working for you is likely working against you. If you're not measuring your culture, you may be inadvertently nurturing a culture that disrupts rather than drives performance.
