To encourage sustainable performance, organisations need to focus on the ways teams achieve results and not just ‘what’ they achieve.
Measuring the effectiveness and value of culture, and potential risks, is one of the issues that is now fundamental to business performance, yet is absent from most corporate reporting and auditing. The right approach to assessing culture is now critical for boards, auditors, investors and regulators.
Nowadays, it’s estimated that intangible assets can represent as much as 80% of a company’s value. Culture is now regarded as a key intangible asset. By assessing culture with objective, evidence-based tools and techniques, it’s possible to make the intangible tangible, drive long-term sustainable growth and reduce risk.
Can we measure culture?
In a word, yes. Measuring and reporting on culture has historically been labour-intensive and the results hard to interpret. However, Big Data, new ways to apply data analytics and advances from emerging technologies are rapidly changing this. Companies can now have a far richer and more accurate picture of the cultures that influence behaviours and generate value.
Is leadership aligned to the rest of the organisation?
Values-based surveys offer actionable insights into people’s perceptions and experiences, highlighting where employees’ beliefs as to a company’s purpose and values may be misaligned with those held by its leaders. An even richer picture emerges when survey tools are paired with cultural analytics, such as applying sentiment analysis to review the content of written communications. Sentiment analysis can highlight unseen pressures that may impact behaviours, providing leadership with an early opportunity for intervention.
Decision making and risk
Many of the biggest corporate scandals resulted from poor decision-making, rationalised by intelligent people working under intense pressure. Historically, companies have focussed primarily on rules to influence workplace behaviours. However, decision-making is also driven by local values and beliefs.
By applying data analytics and leading edge psychometric and culture assessment tools, organisations are now scanning for hidden cultural indicators of risk, leading to benefits including:
- Identifying and mitigating potential threat
- Protecting trust and reputation
- Increasing stakeholder confidence
- Reducing the cost of monitoring the compliance and control environment
Performance and operational architectures
Organisations have historically relied on mechanisms (e.g., reporting structures, operating models, policies and targets) to influence employee behaviours. But when culture is ignored even the best intended rules can be overwhelmed. Increased digitisation, globalisation, more flexible ways of working and teaming with third parties have also heightened organisations’ need for a tangible understanding of the cultural contexts in which their people are working.
Social and political architectures
Relationships and power structures also influence behaviours and decision-making in critical, but often overlooked ways. Many organisations attempt to guide these structures through codes of ethics, values statements and training. However, the impact of these is often limited. To achieve greater influence over the values and beliefs that inform behaviours, organisations need to better understand the political and social domains that shape the environments in which decisions get made.
Don’t overlook the ‘how’
To encourage sustainable performance, organisations need to focus on the ways teams achieve results and not just ‘what’ they achieve. Overlooking the ‘how’ can unintentionally drive behaviours that put organisations at risk. Where employees’ beliefs and values are misaligned with the organisation’s purpose, pressure to perform can sometimes compromise the quality of decision-making. By contrast, where alignment exists and pressure is thoughtfully applied leadership can effectively support the achievement of sustainable results.
How leadership can help
- Understand if the culture you have can help meet your organisation’s objectives
- Know the value of culture to your organisation, and the values that shape it
- Understand how ‘tone from the top’ is received and interpreted
- Gain confidence that your culture safeguards your brand and reputation
- Understand how to influence the sub-cultures within your organisation
- Ensure your culture is enabling your people to do the right thing
- Give confidence in your organisation’s culture to regulators and other stakeholders
- Ensure leadership development programmes are fit for purpose
- Enable a culture that promotes innovation
Local cultures affect how individuals make decisions
Understanding how political, social, operational and performance architectures interact within teams, and making necessary adjustments, is critical to influencing how employees exercise judgment. Neither people nor teams are static. Understanding the underpinnings of teams that achieve great results with high integrity can drive even greater levels of performance.