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3 ways HR can measure the value of organisational culture change in 2020

It’s fair to say that organisational culture is having its moment in the sun, vital both to creating and protecting value. The worth that institutional investors attach to intangible assets - many of which relate to culture – is increasing, and this is focusing minds in the boardroom.

This is quite a turnaround for something that has for some time now been considered little more than a warm-and-fluffy notion.

According to Micah Alpern, culture and leadership lead at EY Americas, this shift has occurred largely due to an improved understanding of just how fundamental culture is to business success.

“Company culture is the foundation of employee experience - it determines how people behave and work together and is reinforced by the organisation’s operating model, which defines such things as how they are rewarded and assessed,” he says.

“The healthier your culture, the more motivated and engaged your employees will be, which leads to increased productivity, profits and customer satisfaction.”

But despite the fact that in order to shape culture it is vital to know how to measure it, many employers are either unsure of how to do so or evaluate the wrong things. Indeed, all too often they rely on annual employee engagement surveys, which tend to provide a ‘snapshot-in-time’ view of things, many of which often aren’t related to culture at all.

Instead Kit Krugman, head of organisation and culture design at business accelerator co:collective, recommends using a mixture of quantitative, data-based metrics to measure how people are behaving, or adapting their behaviour, combined with qualitative techniques to evaluate the impact of such change in order to gain a more rounded picture.

This is because “just looking at numbers makes it hard to understand the nuances and what employees are experiencing, which means sometimes you have to read between the lines,” she explains.

Here are three approaches to help you do both:

1. Employee storytelling

Setting up forums to enable employees to tell their stories directly is one of the most effective ways of “hearing the heartbeat on the ground” and assessing the impact of change, believes Ann Chambers, HR director at natural and organic food supplier Wessanen UK. Options here include regular pulse surveys, one-to-one and team meetings, focus groups, digital forums, dedicated suggestion boxes and employee assemblies to discuss what it is working and what is not.

But to be truly successful, storytelling requires both a top down and bottom up approach, says Mr Alpern. “It’s important that leaders are aware of, and study, the tone at the top; that managers share the mood in the middle, and that the buzz at the bottom is understood to see how people live and feel about the culture,” he explains.

It’s important that leaders are aware of, and study, the tone at the top

Robert Ordever, managing director of workplace culture specialist OC Tanner Europe, agrees, but also emphasises the importance of active listening by those in charge both to enable the creation of a successful company culture and to measure it.

“There needs to be enough humility to listen, a commitment to listen authentically and a desire to enable and support continuous improvement of the employee experience,” he says.

Equally important though is ensuring that no blame is attached to any of the information or points of views shared.

“Constructive comments and feedback need to be treated positively, even if the messages are difficult to take on board, as it helps build trust,” Ms Chambers says. “It takes time but it’s important people feel as if they can be genuine and honest and that their views are respected, no matter where they sit in the company.”

This only occurs when listening turns into action. Companies that collect the voice of employees but take no action deteriorate trust and weaken the culture.

2. Organisational design

A key means of reinforcing desired behaviours among employees is by ensuring the organisation’s operational model and environment is aligned to the culture. But getting it right involves regularly measuring the behaviours being reinforced and the resulting outcomes.

For example, Mr Alpern explains: “Your operating model should not be a constraint on the right behaviours. For example, if you want the company to become more innovative but there are 20 approval layers to go through every time someone comes up with a new idea, it just won’t work. To allow ideas to flow more easily, it’s necessary to evaluate ways to free the process up.”

Your operating model should not be a constraint on the right behaviours

Another way of shifting behaviour is to change incentive structures and/or how performance management is assessed as both can play an important role in effecting change.

“If you’re asking people to work together more closely in a cross-functional way but your incentive structure rewards individuals and assesses them on their own achievements rather than that of the team, why would they change their behaviour as you’re not giving them a reason to do so?” Mr Alpern says.

This means it is important to gauge whether the company’s processes and procedures are truly aligned to organisational goals and to track whether they are achieving the desired outcomes. To do so requires using meaningful metrics to review their effectiveness on an ongoing basis.

For example, when assessing the effectiveness of a particular recognition strategy, suitable metrics might include anything from employee engagement scores to customer feedback.

But as Mr Ordever points out: “Whatever they are, they need to be measured and evaluated to help leaders understand the impacts of an appreciation programme on employee behaviour and business outcomes.”

3. Sentiment analysis

The aim in introducing sentiment analysis tools is to gather opinions, employee motivational factors and feedback from a range of digital channels, such as email, social media platforms and internal communication and collaboration tools, to capture and measure employee perceptions, including how it is transforming.

While the analytics software to do so has been around for several years in a customer context, it is currently much less widely deployed in the employee domain, although this situation is expected to change over the next few years.

The key advantage of such offerings, says Mr Alpern, is in providing an authentic view of staff opinions that is “not sugar-coated” and which does not involve “over-surveying people”. Instead, it will “let you know whether your change messages are getting across or not”.

It can also provide leaders’ insights into what would motivate their employees to change their behaviours, which allows for customised change programmes versus the typical one-size-fits-all programs that can frequently fail.

“These are powerful tools that enable you to see how behaviour is changing,” he explains. “So if, for example, the focus is on freeing people up from having to attend so many meetings, you can track if that’s happening, or if you put a communication out around collaboration, you can see whether the sentiment around it is positive or negative.”

The downside of this approach is that, even though data is anonymised, it can “feel too Big-Brother-ish and like it’s an invasion of privacy,” Mr Alpern says. As a result, it is important to “be very transparent with employees about the data-scraping you’re doing and to clarify that it’s not about individual comments or behaviour but overall sentiment”, he points out.

It is also vital to have a clear strategy around what data is to be mined and why, and how it is to be turned into actionable insights.

To conclude, as company culture continues to grow in significance among the C-suite and Boards as a means of evaluating organisational value, so will the desire to measure it in meaningful ways, particularly in a change context.

As a result, storytelling, organisational design and sentiment analysis will all become big pieces in how companies measure and shape culture in future.