Why Don’t Companies Measure Culture?

Sean Bowman, Director, Stagira Consulting

I just don’t get it.

Every day, there is another article written about the importance of organisational culture.  Not just in HR mags.  Not just in management journals.  But pretty much every day in the mainstream media.

Bluechip companies with supposedly invincible growth momentum and presence are being pegged back significantly.  Some of these are in danger are disappearing into permanent mediocrity.  Others will disappear for ever, like many already have.

Because of their strategy?  Well sometimes.  

But the most common reason is the culture of the company.  

I’m old enough to have endured the journey about HR “getting a seat at the table”, and HR being questioned about their value add.  HR being made fun of its supposed lack of commercial impact.

But right now organisational culture is the biggest differentiator between corporate success and failure.  The truth is that it always has been, it’s just that the exponential rate of change is speeding up corporate successes and failures like hitting fast forward on a remote control.

Organisational culture is currently the corporate world’s greatest crisis. It’s an astonishing  crisis. And it will be for some time. 

Why?

Because the vast majority of companies don’t measure culture. And because they don’t measure culture, they don’t know when the next crisis is about to smack them in the face and potentially punt them out of existence.

Most companies have Values stuck up on walls throughout their company. But most companies spend no time or effort measuring and understanding whether the actual culture and behaviours of their company are getting better or worse at living these values.

Sure, most well-resourced companies have lots of people measures. Many companies laud their engagement score, their “best place to work at” award or their diversity/gender profile. Pick up any annual report of a listed company and this is what you will most likely read in the People section.

All of these measures are really important, and justify focus and resource.

But it is possible to have positive outcomes in all of these areas and still have a toxic culture.  A toxic culture that does not deliver on a company’s stated values.  A culture that is not focused on people.  A culture that is not focused on the customer experience.  A culture where not doing the right thing is the way that things are done in that company. 

So here is my memo to the CEOs and Boards of all companies. 

When you articulate your Corporate Values to your shareholders, customers, regulators and the community – these stakeholders don’t view these values as an aspiration that you are working on.

Far from it.  They will judge your company and its behaviour against these values.  Of course they will.  Why wouldn’t they?  You put them out there. You said “this is who we are”.

So when you say – “we are a customer focused, high integrity company” etc, shareholders don’t think that customer focus or integrity is a work in progress.  They expect the highest standards.  

And in case it isn’t clear – customer focus doesn’t involve fleecing the customer.  It doesn’t mean charging them for products or services that they didn’t receive.  It doesn’t mean selling their digital footprint to the highest bidder.

And do I need to explain Integrity?  Well – it means doing the right thing.  Not manipulating PR and media releases when profit prevailed over principle, but actually doing the right thing. 

The true test of whether a corporate value is a real value is when values wins over profit. If profit trumps a value – then it was at best a guiding principle and was never really a value. 

Sound familiar?

So what are the two biggest enemies that undermine stated values versus actual behaviour?

The first is Leadership Behaviour – starting with the CEO. Too many CEOs and senior leaders are well versed in explaining and reverse engineering decisions and behaviour that is inconsistent with the stated values of a company.  Whilst this has always been suboptimal, this strategy unfortunately used to work too often in the past.  But not so much anymore, and every month that passes, even less so. The fast forward button on the remote has been pressed.

The second is the incredible gap in companies that actually measure culture. As I said in my opening sentence, I just don’t get it.  Is there anything more important right now that companies should be focusing on?

I don’t think so