Measuring your organization's temperature and pulse

Shall we start with a general question why is it important at all to have a healthy organization culture? An intuitive answer is that a good corporate culture drives company performance.

In 2015 Anthony S. Boyce,  Levi R. G. Nieminen,  Michael A. Gillespie,  Ann Marie Ryan and Daniel R. Denison published a research »Which comes first, organizational culture or performance? A longitudinal study of causal priority with automobile dealerships«1 that in fact establishes exactly that. The researches have analysed the data from 95 franchise automobile dealerships over a period of 6 years to find out what drives what. The results have shown that culture does come first, which in its turn was reflected in ratings from customers and car sales.

When thiking about culture, what immediately comes to mind is the “soft” aspects of it like values, mission, vision. However, the best performing cultures usually have “hard” numbers and key indicators as well. Ask your colleagues what is the indicator of a success of their business? Many probably will be giving a range of totally different answers, from profit to the individuals KPI’s to no clear idea at all.

The issue is that this key number of a success is different for any company, big or small, it can also vary depending on the industry you are in, or the market situation you are in, or the stage of business development you are in. However, it is important that everyone’s attention in your company is focused on it, so there’s a common target to reach.

John Case and Bill Fotsch in their article “A Winning Culture Keeps Score”2 , when talking about what makes a number “key” state, that it has to meet the following conditions:

  1. It’s directly connected to the financials. 
  2. It’s not imposed from on high.
  3. It’s for now—not forever.

They also advocate for the power of the open-book management (OBM), a term coined 25 years ago, where employees of the organisation are given the financial and operational information of the company and are taught to read and use this data, as well as are enabled to make better business decisions themselves.

If we return to the question how to check the »health« of your corporate culture and organization, there are number of methods used from simply employee surveys to, but also main aspects to just observe. What needs to be kept in mind, corporate culture does not happen by accident and it's a result of policies, hiring practices and incentives used to reinforce certain behaviours. Which also means that things can be changed.

To help you understand better what kind of corporate culture is there, take a look at the following things:

  1. Communication within the organization. Sharing information at all levels, including everyone in the organisation, both-ways communication is the keys to look for. Long gone are the days of a top-down approach.
  2. Degree of employee-centricity in the organization. Hiring right people and putting their talents and skills to best use, as well as caring for the incentives to keep them motivated falls into this category.
  3. Understanding corporate goals. As mentioned above in the article, employees that share the same interests as your company, are in fact driving the results and are creating naturally the culture, where values and meaning play a huge role and are enjoyed.
  4. Collaboration and teamwork. Take a closer look to the company's reward system, both formal and informal, that has to promote teamwork, rather then competition among employees.
  5. Language used in the company. It might seem as tiny details, however, the language used in communication within organization says volumes about whether employees feel comfortable at work and in what they do, as well as when are they are »available« for work-related issues are signs for work-life balance.
  6. Recognition of good work. Appreciation is the key word here, and it needs to be mentioned that money is the least »motivating« way here.
  7. Handling failure. If the first question asked in the organization is »Whose fault is it?« instead of »How can we solve it?«, the company is a in a deep trouble and it reflects on everything from performance results to the toxicity among employees.

Overall, how does a healthy corporate culture look like then? Well, as simple as this: when you meet happy and fulfilled people in the office that feel appreciated and know that what they are doing matters.

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