Friday, October 25, 2013

Can Culture be Measured

Culture Effectiveness: It is Easy to Tell, but Hard to Measure!

Company culture is unique and provides arguably the most sustainable competitive advantage an organization may have for distinguishing itself against the competition. Culture can make or break an organization. Talent is attracted because of Culture & attrition also happens because of Culture. It’s easy to tell whether culture is empowering or toxic. However, is it possible to harden the soft factor like culture, to make it measurable, and how to nurture a high-performance business culture?



1. The Culture Traits 

Culture is an abstraction. It is determined by the individual and collective DOs and DONTs: fostered/ supported by the people who enjoy a place in the decision-making space or strategy-making space in any organization......Measurement of organization culture can also present the purpose of showing mirror.......How evolved the management is? Will it determine the initiation of corrective action to create sustainable competitive advantages?

Culture is Organizational Habit. Culture by this definition is not highly malleable and tends to be resistant to change, like a habit. However, Organizations can learn, benchmark against, competencies to improve business performance. Whereas the cultural aspect is an intrinsic factor that drives the organization's business longevity. An organization with an excellent culture is arguably capable of giving great results in their competencies. Highest rated competencies could be very short lived if the organization lacks the culture to rate and retain the value system beyond the business results

Culture is Process: Anyone that is educated and has been involved in a corporate cultural initiative would know that corporate culture is created out of the systems, processes, human capital (and associated continual development), organizational hierarchy, and strategy design of the organization. Through the design of the key company interdependencies and structure forms, the way employees will work, interact, and use their collective knowledge to the benefit of the organization. Since this method of addressing culture is based on systems and processes, it could be measurable. But HOW? 

2. How to Measure Culture 

Culture is difficult to "measure" because the measurement of culture is not only one dimension such as financial or a technical point, it’s a multi-dimensional evaluation. Though it’s hard to measure culture directly, there are logic steps in evaluating its impact indirectly:

In-depth understanding: First, a sufficient understanding of the important elements that contribute to the way that the culture works to select appropriate measures. Culture is a unique characteristic of an organization that emerges from the combination of processes, best practices, synergies between departments and individuals, and other—often unidentified characteristics. It is tempting to circulate the current hot tool or metric in an attempt to capitalize on the latest management fad or to use industry benchmarks as a means of assessing organizational success. 

Second, choose the right instrument. Too often consultants, HR professionals, and other well-meaning individuals deploy their favorite instrument in an effort to understand something about the culture. These exploratory missions can be useful, but should be approached with caution since every measure implies some commitment to take action based on the results. Sometimes organizations create their own measures with little understanding of how measurement works. However, there are tools and techniques which can help assess its impact:
1)     Statement of values. This is to be articulated and communicated across the organization. 
2)     Employee feedback. Holding Line Management responsible for improving concern areas in the Employee Feedback.
3)     The degree of Process Transparency. What information is communicated and how frequently? 
4)     Degree of Empowerment: How much delegation is permitted. What is the decision-making freedom at various levels of Hierarchy?
5)     Participation in Strategy and Innovation by Employees. Some organizations actively encourage everybody to comment, give inputs into these two areas in a secure fashion.

Third: Avoid the Pitfalls to Measure Culture: Culture is important, and it is supposed to be an inherent backbone of the organization. Cultural mismatch leads to separation. There are pitfalls when assessing culture only based on silo data, but not a holistic view.
1) You are what you measure
2)     The value of measures is very low compared to the cost of measuring Culture
3)     It will be grossly misleading. A culture like economies, societies, and ecosystems, are complex adaptive systems which cannot be reduced to single metric perspectives. Singular reductionism approach vis-√†-vis pluralism is a common flaw in approaching such constructs.

Fourth: there’s a preplanned commitment to take action. This is not to say that the exact nature of the action must be preplanned, but rather that the commitment to take appropriate action is needed before the measurement is undertaken. If this message is not followed up, it makes future measurement difficult and begins to erode positive aspects of the culture.

Though culture is difficult to measure, Leadership, Organization Structure and Employee Engagement are the key drivers to corporate culture, so you can measure those drivers of culture in an organization and use those driver measurements to see if you are creating the culture that you want, focus on culture vision, not habit myopia,  and further review it to nurture cultural integrity and improve cultural maturity.

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