A company’s culture binds an organization together, facilitating strategy execution and performance improvements. When appreciated and nurtured, a culture’s distinctive characteristics create a unique identity that’s hard for competitors to copy, providing an enduring competitive advantage.
Winning cultures see performance as an explicit output, and foster an environment that is conducive to generating the best possible results for their customers, employees, and other key stakeholders. The behaviors modelled by these cultures help employees see their work as being meaningful, generating enthusiasm for what the company does. High-performing companies know that cultures aren’t just about affiliation; they are also unashamedly about delivering results.
But some leaders believe that their company’s culture is largely disconnected from what it takes to win. They perceive culture as a means to help employees feel good about where they work, but not as a way to help them perform better. They tend to think about culture as being hard to measure and hard to change. As a result, many choose not to invest in strengthening their culture, despite abundant evidence that, when skillfully managed, culture can be a powerful driver of results.
Studies indicate that high-performing cultures are characterized by these competencies:
- Clearly aligning vision, strategy, and shared employee values and behaviors;
- Acting in the agreed-upon direction with minimal friction and greater agility; and
- Continuously innovating/improving at a rate that exceeds competitors.
Using this definition of culture guides companies to identify metrics that matter, and tools to measure them, enabling the impact of cultural behaviors to be quantified.
Consider these areas to find potential metrics that provide tangible evidence of cultural impact:
- Business performance: Are key performance indicators improving? Are relevant growth targets being reached more frequently? What is happening with less obvious indicators, such as more rapid response times, or decreases in customer complaints?
- Critical behaviors: Have enough people at multiple levels started to exhibit the few behaviors that matter most? For example, if customer relationships are crucial, do managers update the CRM database on a regular basis? If innovation and improvement are vital, is the number of validated quantifiable improvements increasing?
- Milestones: Have specific milestones been reached on time? For example, has a new policy successfully been implemented, or a new product launched as planned? Are people living up to their commitments to targeted key accounts, and to each other?
- Underlying beliefs, feelings, and mind-sets: Are key cultural attitudes moving in the right direction, as indicated by the results of employee surveys? NOTE: Expect a slower rate of improvement here; many will shift their thinking only after new behaviors have led to results that matter, and thereby been validated.
How are you measuring the impact of culture on your business performance?
