All businesses focus on metrics for success. But measuring organizational culture is often considered a “nice-to-have” rather than an essential metric. Need to cut the budget? The culture survey is often the first to go, because culture isn’t considered to be one of the KPIs of the business and its leaders.
There are other obstacles for the culture survey. In some companies, fear is a factor. The prospect of canvassing employees and finding out what they really think seems daunting. I have often heard senior executives say, “we know how our employees feel, and what their problems are. We don’t need to ask them.” Often, the underlying issue is a fear of seeing those problems in black-and-white, and the resulting need to do something in response.
And then there’s the fact that organizational culture isn’t easy to change. McKinsey research indicates that two-thirds of culture change initiatives fail. As such, it’s a business hot potato. No one wants to end up with their hands burned.
But a great organizational culture is the foundation that enables you to have loyal, engaged employees, better productivity, and a more profitable enterprise. Ignore it at your own peril.
Based on my thirty years of experience in leadership and culture transformation, here are five essential principles you need to embrace in order to get culture right:
1. Recognize the connection between your business’s values and its culture
Values drive culture. Organizations that demonstrate positive values (such as integrity, customer satisfaction, and making a difference) have measurably better cultures than organizations that demonstrate negative values (such as blame, buck passing, and information hoarding). And research shows that organizations that have measurably better cultures are more profitable, with more productive, engaged employees.
Creating a strong culture requires strategy and commitment, but there is no other single change your business could make that will give you such wide-ranging and tangible benefits.
2. The lived culture of the organization must be measured
Whether or not you measure it, your business has a culture. And that culture can be helping you grow, or it could be causing huge problems you will have to deal with sooner or later. Measurement is essential to understand its impact.
How do you measure a culture? You measure its values. But there is a difference between the aspirational values in the lobby, and the values that are actually at play in meetings, performance reviews, and emails. In an exceptional organization, official and lived values will be similar, but in most cases there are differences. In some situations the differences are stark.
At Enron Corporation, the official corporate values in 2000 were:
- Communication
- Respect
- Integrity
- Excellence
Had they measured the real values of the company, it’s likely that they would have found values like:
- Greed
- Short term results
- Internal competition
- Arrogance
A successful culture transformation must measure what the people in your company are experiencing every day, and use that as a starting point. It must also determine what they would like to experience, and use that as an end goal. You can only learn this information by asking your employees. Enron leaders didn’t ask, because they didn’t want to know.
3. A well-designed aspirational culture is a good start, but it’s not enough
Too often the aspirational culture is developed at the top, without any input from employees. But employees can refuse to engage with culture change initiatives if they haven’t been involved in developing them. They need ownership, as much as senior executives do.
Consider this: Who understands what kind of culture would motivate, engage and stimulate employees? Employees themselves, of course. Employees know what they want, and they are often incredibly savvy about what the organization’s values need to be in order to make it more successful. In our experience, employees always “get it right.”
If your company truly respects its people (who are often the first point of contact for your customers), you must listen to them.
4. Understand that culture transformation is more than a one-time intervention
Technologies change. Strategies change. Products change. Cultures, too, must evolve to meet the needs of their dynamic circumstances and environments.
Culture transformation is a long game. Once you’ve executed an intervention that positively impacts your organizational culture, you must ensure that it remains relevant to your ever-developing employees, customers and conditions.
In other words: Culture improvement, including ongoing review of the values of your business and its people, needs to become part of your organizational culture.
5. Make every leader responsible for culture change
In reality, organizations don’t change. People do. For your business’s culture change program to be successful, the first people who need to make meaningful changes are the leaders of the business. Studies have shown that a person’s immediate leader has more impact on their engagement than any single other factor.
Therefore, any plan for culture transformation requires a plan for leadership transformation. This means ensuring that your leaders are living in alignment with the aspirational values of your organization. There are many ways you can address this: Leader 360 feedback, coaching, mentoring, and strengthening the criteria for leadership selection, development, and promotion.
In summary: Company culture is worth the effort
Culture is integral to your company’s success—don’t allow it to form in an unfocused, unintentional way. By understanding and leveraging the power of a values-driven culture, you give employees a chance to be their best, resulting in higher engagement, improved productivity, and greater profitability.
About Amy Powell:
Amy is the Director of Business on Purpose, LLC. She has worked internationally in the field of culture and leadership transformation for 30 years. For the past decade, Amy has used the Barrett Culture Transformation Tools (CTT) to measure and change organizational cultures. She is such an advocate for these tools that she has become a Trainer Partner with the Barrett Values Centre, enabling her to certify others in the use of the CTT suite of tools. She will be running a certification on November 5-8, 2018 in Portland, Oregon. For more information, click here.