Can culture be measured?

Dec 03, 2015

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.

Office workers

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."

What do you think of the value and accuracy of tools measuring employee engagement and an organization’s culture? Should measuring employee sentiment for retailers be just as important as measuring customer sentiment?

Please practice The RetailWire Golden Rule when submitting your comments.
"I realize while my statement may hold some prejudice, the larger and more entrenched a company is, the more challenging measuring corporate culture can be, especially when you try to implement actionable metrics."

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10 Comments on "Can culture be measured?"

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Joan Treistman
6 years 5 months ago

Identifying a corporation’s culture and how it influences employees has value if management wishes to develop and implement related goals and strategies. Total Quality Management (by Deming), popular in the 1990s, integrates measures of management, employees and customers. I’m supposing its popularity has waned if this article presents employee engagement and the culture of an organization as a new idea.

For retailers especially, it is important to also account for the shopper. Identifying how to align values that positively motivate management, employees and customers still seems like a winning formula to me.

Roger Saunders
6 years 5 months ago

All employees seek feedback. But like all forms of rewards, the feedback has to have certain characteristics. It needs to be: 1.) Easy to understand, 2.) Easy to implement, 3.) Consistent with the company/retailer’s objectives, 4.) Provided in a timely manner, 5.) Be easy to administer.

Each of those topics have to be understood and embraced by top and mid-level management to associates throughout the organization. Peter Drucker, the brilliant management consultant and educator, pointed out that all companies are built and maintained based on strategy, execution, structure and culture.

Miss strengthening any one of those elements and problems typically arise. Culture is an element that can often enter into any daily portion of a company’s operations. It can be something as simple as saying please and thank you.

In retail, employee sentiment is measured every day by the customers. Those customers act or react upon that sentiment consciously or sub-consciously. Keep building and reinforcing the culture.

Anne Howe
6 years 5 months ago

Most of these measuring tools are valid, more so when administered in an atmosphere that’s private and where employees have the opportunity to be totally honest. Whatever the formula, my sense is that using the same one over a defined time-frame is the best bet to measure change.

Retailers will have a tougher time measuring employee sentiment over time since so many workers are part-time, but the value of the effort for managers is crucial in today’s world of shifting values across the path to purchase. The faster consumer attitudes and behavior changes, the more important culture becomes. Having a culture rooted in purpose and belief on the value delivered both internally and externally can become the vital “root system” for sustained growth in a changing world.

Ian Percy
6 years 5 months ago
Jeb Bush got into this thing about allowing only “Christian” refugees into the country. A reporter asked how one would know which refugee is indeed a Christian. Bush could only shrug his shoulders. Same goes for knowing what a positive, strong and enduring culture is. I’ve been a student of corporate culture for 43 years. There are many dozens of models for defining and measuring whatever “it” is. Vega Factor’s model is certainly as good as any. But at some point even they will have to simply shrug their shoulders because some things simply “are” … and trying to make spiritual dimensions into mechanistic ones to satisfy the insatiable need to measure something flat-out fails. The truth is people just make this stuff up! What they have right is that culture, spirit, energy is the soul and life-blood of any organization. That life-blood can be contaminated with anger, selfishness, ego, greed, etc. Or it can be literally life-giving to all who are blessed to be part of it. Can it be enhanced, made more miraculous… Read more »
Gordon Arnold
6 years 5 months ago
Employees, past and present, are customers that provide a large portion of the word-of-mouth market reporting about the company. Very few companies own or even understand this reality. The discussion we see here seems to be struggling for corporate live data reports, probably because they were not found or shared. The country’s educators are struggling to show businesses that the work we do is far more than from the neck down and never should any individual be written off as a liability. In this view many see corporate employee decision making processes owning a black or white practice. A closer view will reveal it is in fact black or red as in making money or costing money. Viewing the company’s most relevant consumer support group by refusing to see it as an investment is an unrecoverable mistake of monumental proportion. If employees feel unimportant or abandoned, what is the chance for the company’s full market(s) success? Without awareness and support information for these factors the company stability and growth results may never be given a chance… Read more »
Ron Larson
6 years 5 months ago

Companies may have different cultures. No single formula can capture everything. It is multidimensional. If company leaders are concerned that a their culture may not be ideal for their current competitive situation, they can try to move the company along one or several dimensions to a different culture class.

Mark Burr
6 years 5 months ago

The value and accuracy are highly suspect and dependent upon the view of the evaluator. The leadership will have one view, the associate will have another — the customer may have yet another view.

Methods of gathering data to evaluate are suspect as few options allow for real honesty due to the lack of confidentiality — real or only perceived.

By far the better measurement is the customer sentiment. Everything should begin with the customer and work back from there without respect to the endeavor.

Ralph Jacobson
6 years 5 months ago

More established retailers may have a more difficult time moving toward some of the more progressive cultures of younger companies, of all types, not just younger retailers. I realize while my statement may hold some prejudice, the larger and more entrenched a company is, the more challenging measuring corporate culture can be, especially when you try to implement actionable metrics.

Shep Hyken
6 years 5 months ago

Culture is great to measure. It can help attract the best of the best. It can help keep the best of the best. Look at how Glass Door measures best places to work. Look for the correlation between best place to work, customer sentiment, employee sentiment and profitability. They all tie together.

Steve Simpson
Steve Simpson
6 years 5 months ago

The issue of culture measurement is a real thorny point for me!

The problem with the vast majority of culture measurement tools is that the tool provider comes with a pre-determined template against which the company’s culture is measured.

Surely, this flies in the face of logic.

The starting point for any measurement of the culture has to be the company’s aspirational culture. What does the company’s culture need to look like in order for it to be successful and to make it a great place to work? After answering the question, cultural measurement should take place around those cultural attributes necessary for the company’s success. In other words, the company ought to find out what it’s culture is like with regard to those attributes of the culture necessary for its future success.

Can company culture be measured? Absolutely!

Actually what is measured is probably a more important question (and by the way, getting an overall number like an employee engagement score, while interesting, provides no insights into what needs to change).

"I realize while my statement may hold some prejudice, the larger and more entrenched a company is, the more challenging measuring corporate culture can be, especially when you try to implement actionable metrics."

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