Company culture matters – and now you can measure it

High-performing businesses don’t just talk about how great their company cultures are – they can prove it. Not only can they precisely define what their culture is, but they can also meaningfully articulate how it affects everything from the day-to-day experiences of the average employee to its contribution to their healthy bottom line.

In recent decades, the importance of building a strong company culture has become accepted by HR and talent management professionals. Importantly, it’s become recognized as a key lever for ensuring a business can attract and retain the best skills – something that’s increasingly important as the war for talent continues to intensify. 

In addition, there’s compelling evidence to support the notion that there’s a definitive link between strong company culture and a business’s financial success.

In this article, we’ll outline the approach and mindset to adopt to best measure the effectiveness and impact of your company culture.

What is company culture, and why should you measure it?

Company culture  – often also referred to as corporate or organizational culture – may be understood as the attitudes and behaviours of a company, its leaders, and its people. An organization’s company culture is reflected in the way people and leaders interact with one another and the values and principles they hold dear and base their decisions on. The underpinning elements of a company’s culture include its core purpose, vision, mission, and values; the working environment; and leadership style. 

He’s right in many respects. For many, company culture is an intangible and difficult-to-grasp concept.

But that doesn’t mean it can’t be measured.

In this age of data and analytics, it’s not surprising that HR leaders are becoming increasingly keen to back up their claims of having a great culture with hard facts. Those who are doing it successfully not only reap the benefits of being publicly recognized as “employers of choice” and the “best places to work,” they are also able to use the insights and data they gather to create a platform for ongoing, iterative improvement. 

After all, you can’t improve what you can’t measure!

Measuring company culture – where to begin

The essential first step in measuring your company culture is defining, documenting, articulating, and communicating it. If you’re just starting out on your journey, why not begin by reading up on the best approaches to doing this? 

Once you’ve completed this step, you can begin considering the best ways to put some solid metrics behind your efforts. 

But, before you start considering where and how to measure the effectiveness of your company culture, it’s important to be clear about what “measurement” truly means in this context. Instead of thinking of it solely in terms of a number or score, rather think of it as a convergence of multiple data points.

Some of these might be traditional employee satisfaction survey results and retention/attrition metrics, but others will be more closely linked to the specific behaviours and business results you’re seeking to embed and achieve.

Also bear in mind that holding up a piece of paper that claims to show significant and positive change within a specific area of the business at a single point in time is less meaningful than reporting sustained, incremental change across the whole organization, over a longer period.

Start with a dedicated project team

It’s a good idea to begin by creating a project team and giving them the task of co-creating your metrics. Importantly, this group of people should not only be made up of members of the HR department – look to engage and include representatives from multiple lines of business and different levels of seniority.  This way, you’ll be sure to get a diverse and truly representative view of what does and doesn’t matter when it comes to evaluating your company culture.

Don't over-analyze the first time

You’re never going to get it perfect, and there’s plenty of opportunity down the road to hone and refine your measurement program and approach. The most important thing is to start somewhere. 

Trial and error is good

Start with just a handful of small pilots and learn from the experience you have rolling out each project. Over time, you’ll be able to augment and segment your program into a more diverse and targeted set of initiatives and tweak your metrics as required.

Steps to success

Here are some of the most common areas that high-performing businesses focus on analyzing and quantifying as part of their efforts to gauge the overall health and effectiveness of their company cultures:

1. Leadership: style and perception

Leaders – a company’s most powerful and influential people – can make or break an organization’s culture. Businesses with strong company cultures are most likely to have effective and dynamic yet fair and approachable leaders. Their leadership style, manner of communication, and behaviors will trickle down to and influence the attitudes of the rest of the business. Inspirational, authentic leaders are vital to companies striving to embed a winning culture.

💡How do you measure it? Leadership strength and effectiveness aren’t easy to measure. But it’s important to note that financial performance and shareholder returns aren’t the sole yardsticks. Informal pulse surveys are an excellent means of garnering feedback from your people regarding their perception of and level of satisfaction with their leaders.

2. Effective company-wide communication

Clear and regular communication is the cornerstone of businesses with healthy corporate cultures. There is a range of communication channels that can be leveraged, but it’s important to be thoughtful and intentional about which to use and when. One-way emails, for example, should be used sparingly. Regular in-person or virtual company updates and leadership “town-halls” are highly effective in increasing the levels of employee engagement wherever people may be located.

💡How do you measure it?  Company intranets are useful to see how teams are communicating and collaborating with one another. Investigate enterprise social tools such as Yammer or Sprynkl - Grove HR's company culture and performance review app, which are an excellent way to allow people from all levels of the organization to share company news, client wins, or even give “shout-outs” to people who have done a good job. What’s great about such platforms is that you can quickly gauge the level of engagement by tracking the number of views, likes, and shares of posts.

3. Employee wellness

The concept of employee wellness covers everything from people’s physical comfort to their emotional and mental wellbeing. It means giving people regular breaks, not expecting excessive overtime, and being open to offering perks such as flexible working time or compassionate leave. In short, it involves treating employees not as objects but as human beings.

💡How do you measure it?  Employers that put a high priority on employee wellness quickly see the results. They enjoy greater employee retention, less absenteeism, and greater productivity. 

4. Working environment

Office-based employees typically spend a significant portion of their days in their workspaces. But is their environment healthy, safe, and comfortable?

Office design and decorations matter here. Small things like having an ergonomic chair, sufficient ventilation, and even comfortable places to share a cup of tea or coffee with colleagues will go a long way to creating a pleasant work environment. Look for ways to eliminate limitations on productivity and increase people’s overall happiness in their workplace.

💡How do you measure it? Inviting public or anonymous feedback from employees is an effective way to understand what they do and don’t enjoy about their workspaces. Adopting a feedback app or placing a suggestion box in a corner are simple but effective tactics to measure people’s satisfaction levels and demonstrate that you are interested in and responsive to your people’s feelings and needs.

5. Innovation

When we think of innovation, we often think of start-ups or businesses like Tesla, Apple, Google, and Netflix who’ve succeeded in turning their industries on their heads with leading-edge products and services. But innovation in the corporate context is also about being able to share new ideas with your colleagues, team members, and management. It’s about feeling comfortable and empowered to take risks and put your hand up for new opportunities. 

And, importantly, it involves people having the sense that it’s OK to make the odd mistake, as long as they acknowledge it and move quickly to fix it. Innovation won’t thrive in organizations that cultivate a culture of fear in their people.

💡How do you measure it? Innovation can be measured in several ways. One is to allocate a budget to research and development initiatives and track related expenditure and returns. Analyzing incremental revenue, profit margins, and financial returns is another way. Equipping people with the latest software and platforms to perform their jobs and tracking productivity gains is another effective yardstick.

6. Social responsibility

Corporate social responsibility is about giving people the sense that their company has a purpose beyond profit. In other words, it means ensuring that employees understand that the company cares about and invests in supporting the communities in which it operates. It also extends to abiding by environmentally operational practices and taking steps to reduce its carbon footprint.

Academic research indicates that people, and especially millennials, are more likely to join and stay with companies that have a strong commitment to corporate social responsibility initiatives.

💡How do you measure it? There are several tools at your disposal that allow you to measure your organization’s social impact and environmental footprint. These include social and environmental accounting and audits (the latter being something that is required by law in certain countries for all publicly listed companies.)

Take action

Culture as an idea isn’t easily quantified, but the outputs of flourishing company culture can be tracked, measured, reported on, and improved.

That being said, it’s a complex and multifaceted task.  

With the help of the above insights, we hope that you feel informed and confident enough to determine the correct metrics to guide your company culture measurement efforts.

The more and the better you measure, the easier it will be to use your findings to make decisions that lead to the creation of a winning culture that supports your employees and advances your business goals.