Defining the strength of a company's culture often seems illusive. But Lindsay McGregor and Neel Doshi, co-founders of Vega Factor, a startup that helps organizations build cultures, have developed a formula to measure a company's organizational culture.
In an article in Harvard Business Review, the two wrote that the formula is derived from work in the 1980s by professors Edward Deci and Richard Ryan from the University of Rochester that defined six primary reasons why people work.
The first three are motives linked to work or the individual's identity:
• Play: Being motivated because the work is creative, encourages learning and problem solving, etc.;
• Purpose: Seeing value in the work's outcome;
• Potential: A role setting someone on the path toward career advancement.
The other three are not linked to the work and identity:
• Emotional pressure: Working due to fear, peer pressure, shame, or to avoid disappointing others;
• Economic pressure: Working to avoid punishment or gain a reward;
• Inertia: Doing the job because it's what you're used to doing.
Basically, the first three motives tend to increase performance and culture, while the latter three reduce it. In calculating a company's culture strength, Vega Factor asks employees in an organization six questions around how important each motive is. In the formula, the motives are weighted by how each is tied to the work itself.
The formula is: (10 x the score for play) + (5 x purpose) + (1 2/3 x potential) - (1 2/3 x emotional pressure) - (5 x economic pressure) - (10 x inertia).
The article addressees how strong cultures are linked to higher customer satisfaction scores and higher revenues while offering examples on how companies are taking steps to lift Play, Purpose and Potential. For example, Starbucks' allows associates to experiment in how they connect with customers. A Walmart manager starts meetings by focusing on how much his division has saved customers rather than made for the company.
Deloitte's "Global Human Capital Trends 2015" study noted how new tools to measure employee sentiment and culture assessment are arriving, just as its annual survey showed that employee engagement and culture had risen to become the leading challenge around the world.
Deloitte believes the rise is linked to corporate transparency (Glassdoor, Linkedin, Facebook, etc.), greater workforce mobility, severe skills shortages as well as a greater employee focus on purpose, mission, and work-life integration.
Deloitte wrote, "While most leaders are measured on the basis of business results, organizations must begin holding leaders accountable for building a strong and enduring culture, listening to feedback, and engaging and retaining their teams."