Charlie Sull, Co-Founder of CultureX and Cultural Researcher at MIT, talks in detail about the importance of effective cultural measurement. Charlie shares the key research findings of what makes a positive culture and why most traditional cultural measures simply don’t work.
Overall, Charlie’s message is clear:
Culture matters
Culture is a significant driver of any organisations capacity to create and deliver value
Most cultures are not where they need to be
However, with senior buy-in and effective cultural measurement this can be easily addressed.
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My key learning nuggets about culture from the conversation:
Culture is important, it is all around you, all the time.
Having a basic understanding of what culture is an important start, however that can be difficult because culture can be such a nebulous concept in and of itself.
One interesting definition to consider is ‘Culture is what you do when your boss isn’t there’.
Understanding culture involves dealing with complexity.
Research across 1600 companies has found that the key to a positive culture across the 10% top rated strongest company cultures is ‘Voice of the Employee’ – a company’s ability to listen to what employees have to say in terms of identifying issues (of various and ranging types across the organsiation) and then addressing those issues.
Where done well companies incorporate the employee voice into their decision making.
Conversely, the bottom 10% worst/weakest companies in terms of culture all consistently disregard the voice of the employee.
Psychological safety is also crucial and a directly related theme to voice of the employee.
Research also clearly shows that the strength of a culture, purely from an employee experience perspective, is worth approx. 20% of market capitalisation over 5 years – it is therefore a grave mistake for leaders not to recognise, acknowledge and actively manage what can be either a huge asset or liability.
Research is also identifying a direct link between culture and value creation in terms of cultivating a culture of agility, innovation and execution, which has even more financial impact on an organisation – potentially in the scale of 500% increase of share price.
More than half of a sample of 1400 CEOs or CFOs placed culture as a top 3 driver of value creation.
Most, 84%, went on to indicate that culture is not where it needs to be.
However, to date, culture has remained a nebulous concept that has been difficult to measure – it is only through measurement and solid data to make a compelling case can culture be put on the CEO’s/CFOs agenda and be taken more seriously.
Yet if ignored, culture often becomes the factor that causes organisations to implode.
The key to cultural measurement is listening to what employees actually say with their natural language – do this and you’ll really understand what is occurring, and causing, hundreds of different cultural topics and therefore make sense of this complex phenomenon.
Once you map the ‘genome of culture’ then you can make great advances in actually improving and creating the cultures we live and work in.
Effective measurement of culture does 2 key things:
it prioritises what is important across the wider culture of the organisation and within the microcultures
points to how to fix issues (incorporating the employee voice – from free text)
The two fundamental things needed to bring about cultural change is:
Top team buy-in; CEO specifically
Effective measurement, which brings prioritisation of where to focus on and the context of how to fix it
Standard cultural rating scale (120/160 overly wordy questions that ask for a rating on 1 to 5 scale) fundamentally don’t work – it can measure engagement but not culture.
Why? When faces with 50+ questions most employees will go to a high level of auto pilot (not really paying attention, switching off and just giving the same response across all questions). Therefore, the data gathered is poor quality and holds little value or insight.
Plus, it doesn’t really tell you what is most important to employees and therefore not really capturing their voice; so overall the measurement is not giving you anything actionable in terms of how to unwind and fix the issues.
It therefore stands to reason that a most organisational cultures are not were they need to be if this is the methodology they are using to measure it with.
Charlie puts forward that the right way of measuring is to simply ask ‘what do you like about working here?’ and ‘what do you not like about working here?’. This gives you what matters to the employee and actionable insights and context about the route forward – it captured the employees voice.
This approach provides really dramatic cultural improvements in a really short time.
Toxic culture is not addressed adequately. 10% of people experience toxic culture. It causes real human suffering that spreads and causes more social issues. However, it is super addressable!
Despite all the research and above points, you don’t have to be a cultural researcher to pick up on it all – we all sense culture intuitively all the time; trust that. Be in the spaces that feel good, remove yourself from those that don’t. Charlie has found that what you feel when visiting businesses is often backed up by data.
The importance of measuring culture – Charlie Sull