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Tuesday
Jan122016

Measuring Company Culture

Someone recently asked me to name five indicators of a positive company culture. This got me thinking about the difference between indicators and the attributes they represent, so I created a list of the five attributes I would use to evaluate culture.

Within each one I have tried to identify what I see as the two ends of the spectrum. Also, it should be noted that in larger organizations I think it is possible to have individual culture pockets that differ from the overall company culture. For that reason, I use the term organization instead of company where applicable.

Generational Identity: traditional versus millennial

Companies, like people, are born. Companies, like people, often assume the values of their time. The ability of an organization to recognize and adapt to the values of the time has a direct impact on their ability to attract and retain both talent and customers. As an example, work used to be about where you had to go to do something, so traditionalists valued “time in the chair.” Long hours at the office thus became synonymous with achievement. Technology advancements have eliminated the need to work from where the tools are because the tools are often mobile and work can be done anywhere the Internet reaches. Millennials thus value results over “time in the chair” and do not equate being present with being productive.

Risk: averse versus entrepreneurial

Trying new things is generally riskier than maintaining the status quo. Just as generational values change over time, so does the business environment. Risk averse organizations are satisfied to continue doing things the way they’ve always been done. New ideas are often met with skepticism and resistance. Entrepreneurial companies are constantly trying new things and aren’t afraid to fail. The emphasis is on the experience and the value of the learning rather than the result.

Decision Making: cost versus value

Cost is easy to calculate and react to, but value often requires gathering facts, analyzing data, and understanding unintentional consequences (both positive and negative). Does the organization routinely choose options with the least cost or the greatest value? Managers who rely solely on their title, experience, or dollar cost to guide decisions i.e., “I know best,” often shortchange the organization by choosing options with lower costs AND lower value—often not in proportion to one another. This translates directly into how people are treated: are employees a sunk cost or a valuable asset worth investing in?

Velocity: slow versus fast

Time is money, and waste slows things down. Things that cause waste can be cultural indicators. Do actions take a long time to complete because they sit idle? Perhaps the lack of urgency is caused by complacent attitudes. Does the bureaucracy of making a decision cost more than the result of the decision? Perhaps management has trust issues. Do meetings start and end on time? Perhaps meeting organizers don’t understand the value of time (or maybe they are just inconsiderate). Furthermore, if it can wait until tomorrow, is it really worth doing?

A great way to measure this is how long it takes to hire someone. Is there a robust and reliable process in place, or does hiring rely on people that must be supervised by each other? Which one produces quality results faster?

Rule #6: Theory X versus trust

Rule #6, simply stated, is don’t take yourself too seriously. Theory X management assumes that people don’t really want to work and won’t unless constantly supervised and micromanaged. As a result, managers take themselves and their role very seriously. Behavioral science, on the other hand, suggests that people not only want to work, they seek autonomy, mastery, and purpose in the endeavor. Organizations that don’t have enough trust in their people or themselves struggle to stay calm and solve problems because everything is an emergency. Theory X organizations have managers and employees that take themselves so seriously information is closely guarded because only they have a need to know. Trust organizations share information freely in order to maximize their ability to solve problem and provide employees with the autonomy, mastery, and purpose they desire.

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