How to measure culture is becoming one of the most discussed topics on culture, in part in response to regulatory pressure to ensure culture is managed and to prevent disasters such as the one we’ve recently witnessed with Wells Fargo, in part to justify the increasing investment in organisational culture and demonstrate the positive impact on the business.
In early November we held a workshop on culture measurement with clients and culture specialists in the Asia Pacific Region. During the workshop the following three areas became the focus of our discussions;
- Engagement is not a good proxy for culture measurement
What was very clear in the conversations was that culture and engagement are two different things. Culture is about values and the patterns of behaviours that can be observed, and one outcome of culture is engagement. Engagement measures the motivation that people have to do their work and come to the office. A healthy culture will often mean high engagement scores, but high engagement scores do not mean that you have a culture that is fit for purpose. There is nothing to say that employees at Wells Fargo were not engaged when they were illegally opening accounts for their clients. Using engagement scores as a proxy for measuring culture is not only risky, it is not right.
- The importance of having a clear target culture
A number of participants in the workshop stressed the importance of having a clear, aspirational culture (the target culture) before starting to measure it. Many organisations seem to accept the workplace culture they have without seeing the need to define their “Northern Star”. Defining a target culture is about aligning culture with strategy, in other words, making sure that how people behave is how you need them to behave to be successful. Once you are clear on the key behaviours that people should display in the business, you can tackle measurement.
- Preference for a dashboard versus a single measure for culture
Do you need a single measure for culture, or does a dashboard make more sense?
A dashboard is required to measure the impact of your culture efforts on business outcomes. Are staff retention, sales and customer numbers increasing or not? Is the culture you are creating delivering the results you envisioned? A single measure is unlikely to give you a full picture of the business impact. However, it can provide an indication of behavioural shift: for example, a culture index can be built based on the results of a pulse survey, or on the back of 360 feedback data. Both the culture index and the dashboard will enable you to lead culture development.