5 common pitfalls of cultural measurement

With new tools that claim to measure the intangible springing up with alarming regularity, are we really any closer to being able to objectively quantify organisational culture and assess the impact of our culture change interventions? A recent FCA Insights paper even goes so far as to say that ‘culture is not a statistical statement that can be discovered as an emerging pattern and that can be generated from a data set’[1]. So is it really worth trying?

Yes it is – with decades of culture change experience, we argue that there is indeed merit in assessing organisational culture but that this is a blend of art and science. Simply assessing the metrics will only give you part of the story.

We also firmly believe measurement should not be limited to those who are concerned of signs of a toxic culture. It should be a priority for all organisations constantly seeking to adapt and be more deliberate about creating a culture that attracts talent and customers alike. Never has this been truer than during the pandemic, with evidence emerging to show that firms with a strong corporate culture have outperformed their peers without a strong culture[2].

Moreover, a strong culture can still result in unintentional risk. Take the example of a strong and supportive team culture. Whilst bringing many positive traits, we have seen this result in unintentional risk when a confidential document was left on a shared printer for several hours. Sensing they were doing the right thing, the finder returned the document to its owner but failed to raise the risk that this customer data had been made available to people all over the office. Was this individual wrong in supporting their colleague by returning the paper? Or, were they simply unaware of the risk they had facilitated? This simple example illustrates the importance of linking conduct and culture to understand and mitigate potential risks that arise from all elements of corporate culture.

Having dedicated the last 12 years to driving the culture change agenda across Financial Services and the private sector, we have observed a wide range of approaches to culture measurement. Drawing on this experience and our expertise in behavioural economics we have identified the top 5 pitfalls to avoid when measuring culture.

1.      Stop trying to measure everything:

With advances in analytics and more data available than ever it is very easy to try and measure everything. Dashboards with hundreds of data points can look very impressive but make it incredibly difficult to know where to target change.

Instead, focus on what will actually make a difference to your success: define your cultural DNA and focus, focus, focus.

Identify the cultural traits that are unique to your organisation and then create a measurement strategy for the traits (both positive and negative) that are most critical to your success.

2.      Stop waiting for all the answers:

Culture is not a science and whilst rarely fast-paced, it is constantly evolving. Almost all metrics are fraught with downsides and therefore relying on these to create a full picture means by the time you get to implement an intervention the behaviour has often shifted from that which you were trying to address in the first place.

Instead, rapidly experiment using hypotheses on what is driving behaviour.

Most importantly of all, do it quickly and act on the results. Trial interventions using a small control group, assess the impact and then roll out or move on.

3.      Stop measuring the symptoms of a behaviour:

Many culture metrics are actually measuring the way in which a behaviour manifests itself, which is failing to address the underlying behaviour itself. Take the example of a poor customer outcome. Metrics may indicate this is down to slow decision making. Realistically this is a symptom of the problem which could be down to any number of drivers including poor incentivisation, unbalanced power dynamics, lack of clarity on responsibilities; the list goes on.

Instead focus on the underlying drivers: investigate the real reason that behaviour is prevalent and measure that.

Consider metrics in light of each individual trait and use focus groups/qualitative data to understand the context.

4.      Stop focusing on the past:

Most culture measurement tools focus on quantitative and lagging indicators to understand what has happened in the past. Whilst the past may be an indicator of future behaviour, there are many variables which mean it is not always an accurate predictor. They also only focus on past known conduct failures, like Libor, so don’t lend themselves to new trending behaviour and conduct.

Instead, supplement with qualitative and leading measures to proactively identify and mitigate future risks from your culture.

Use this qualitative insight to tell a narrative, bringing the culture to life.

5.      Stop taking the espoused culture as truth:

With a strong reliance on self-reported metrics and detailed data points, information is often aggregated to a point that it loses real meaning.

Instead, consider the unfiltered commentary to uncover how an organisational culture is really manifesting itself.

Ask employees to tell a story about the culture; this in itself can be a powerful tool to really uncover the ‘real’ culture as opposed to the artefacts or leadership story.

Concluding Thoughts 

For us, one thing is abundantly clear: there is no one size fits all approach. The exact cultural measurement approach depends entirely upon your organisational context.

There is however one thing that remains constant. Above all else there is no point in measuring culture if you let someone get away with poor behaviour, even if they are your highest revenue earner. This not only rots the apple and the apples around it, but leaves a legacy that takes a lot to unwind. I leave you with six key words; “Don’t just measure. Measure and act”.

At WBC we help organisations to create lasting change through culture and people, to maximise their competitive edge. To hear more on our perspective on cultural measurement or how we can support your culture change agenda contact us at info@whartonbc.co.uk.

References:

[1] Measuring corporate culture: a warning, Benjamin van Rooij and Judy van der Graaf, Insight 18th March 2020

[2] The Role of Corporate Culture in Bad Times: Evidence from the COVID-19 Pandemic, European Corporate Governance Institute – Finance Working Paper No. 726/2021. Feb 2021