Measuring culture: It's more than just about the vibe

Australia Publication 14 November 2019

Have you noticed people beginning to roll their eyes at the mere mention of ‘culture’?


2020 is fast approaching, offering a fresh start for entities thrust into the spotlight by the Hayne Royal Commission and scrutinised in the commentary that ensued. But culture is an elusive concept and, having poked and prodded at it throughout the year, many are fatigued. Before the lessons of 2019 are forgotten, it’s worth getting clear on why organisational culture matters, and what can practically be done to measure and monitor it.


Isn’t culture just about the vibe?


 Vibe (noun) informal the mood or character of a place, or piece of music





Well, no. Let’s remember that culture matters because of risk.  An organisation’s culture manifests in how people act. What people do - as a result of shared values and norms, the behaviours that are rewarded, modelled by and observed, and the expectations of behaviour reflected in policies, procedures and processes - creates risk for the organisation.  Culture matters because what people do ultimately impacts all stakeholders of the organisation, including employees, customers, the community and, ultimately, investors.


But isn’t it HR’s job to take care of culture?


Not really.  Culture, because it drives risk, should be everyone’s business.  Culture deserves broader interest and inquiry than even the best-crafted HR survey can offer.  How people feel about their organisation and its purpose, whether they respect their boss, like their peers or are thrilled by the work they do, are just dimensions of culture. 

Even exemplary employee satisfaction scores may disguise poor culture and risk management. The undetected rogue, overzealous sales representative, unsupervised junior officer, or larrikin manager may all love their jobs precisely because the ethics, lawfulness or appropriateness of their behaviours is unchecked. Employee happiness is not a proxy for a culture that is effective at mitigating the risk of misconduct. 


So, how should we measure and monitor it?


Organisations must become more creative in probing beyond how staff feel, to elicit genuine feedback and examine the outcomes of behaviours, to uncover the ‘cultural canaries’ in the risk mine.  And both qualitative and quantitative data is probably already available to organisations in a variety of guises. 

Examining and monitoring trends in the number, nature and timeliness of the resolution of customer complaints, customer disputes and litigation, as well as the usual customer satisfaction measures provides insight on culture.  Organisations doing this well also tag and mine compliance breach and risk data to better identify ‘hot spots’ for poor customer outcomes, address root causes and stem the flow of complaints.

Issue management data is critical for measuring culture. The readiness with which people identify and report issues and incidents internally (and, if relevant, externally) and the timeliness of escalating and resolving issues indicates a culture that prioritises learning what’s not right and is committed to fixing it. The number and nature of misconduct claims, legal proceedings, or incidents giving rise to consequence management are obviously also important indicators of poor behaviours and risk.


Can data analytics solutions help?


Absolutely. For example, the number, nature and impact of cross divisional business initiatives may indicate a high level of collaboration, but the patterns of digital communications or span of business interactions can also be measured and monitored by increasingly sophisticated data analytics solutions. These may tell an organisation even more about how its people collaborate. How authority and influence are conferred, distributed and exercised is a reflection of culture, and can also indicate risk.

Organisations keen to understand how well they foster transparency not only examine the successfulness of formal HR complaint and whistleblower procedures, and trends in the issues raised, but also the effectiveness of informal mechanisms, and leadership aptitude, for gathering staff feedback. An organisation that purports to value constructive challenge and continuous improvement as a means to mitigate risk could capture the number and nature of continuous improvement ideas submitted, initiatives underway, or projects completed and delivering on success measures.

The complexity of systems and processes within an organisation also contributes to risk. Measuring the number of steps in key processes, requirements or exceptions within policies, or variables to standard products or services – and the extent to which these are fully understood and followed by staff - can be instructive.

These are but a few ideas. A clever organisation can and should devise many ways to better understand and measure culture. It may take some creativity. But remember, culture is more than just about the vibe.


More on culture and risk

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Senior Advisor - Risk Advisory

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