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Measure Your Culture to Better Manage It

Published Wednesday Aug 15, 2018

Author Ruth Lund

Measure Your Culture to Better Manage It

Organizations keep turning up in the news with disastrous circumstances that frequently point to flaws in their culture: from serious integrity issues and loss of important talent to egregious sexual misconduct and harassment.

No one starts a business with the intent of landing in one of these quagmires. Most business leaders expect to enjoy the benefits of a healthy organizational culture—one that attracts top players and oozes an energized atmosphere with jazzed employees. This is the cultural elixir of iconic businesses like Southwest Airlines and Zappos and a growing number of lesser-known companies that have figured out that intentional management of their culture has a big payoff.
Wise organizations carefully manage the care and maintenance of this critical element of their performance.

What’s Feeding Your Culture?
Most of us think of organizational culture as this nebulous, squishy reality that we hope is as healthy as we’d like it to be. From time to time disturbing behaviors and situations crop up, and we deal with them. Some companies treat these like a whack-a-mole game rather than undertake a careful examination of root cause. There are three consistent stumbling blocks that prevent leaders from grabbing the bull by the horns and managing their culture before it manages them.

1. “I feel really good about our culture”
Some executives nurture a false sense of security about what is really happening in the organization and the experience of the rank and file. Instead of verifying their assumptions, they choose to rest in their own estimate of reality. Unfortunately, the higher one is in the organization, the less honest information we tend to get
about problems.

2. “I have no idea how to start”
We all procrastinate or avoid those things we don’t know how to manage. It’s human nature. Many leaders are not aware that there is a measurable, process driven approach to managing culture that clearly identifies the percentage of dysfunction that is impeding highest performance as well as the limiting values—including silo mentality, blame, power, greed and confusion—that are driving that dysfunction. Once the state of the culture is measured and leaders provided clear data, leadership teams can create the game plan.

In addition to learning about the levels of entropy (the amount of energy expended on non-productive activities), organizations can also get clear-eyed on their alignment to their core values. Are they just “words on the wall” or are they a living, breathing part of the regular experience of their employees?

3. “I’m not sure I really want to know”
Leadership guru Henry Cloud subtitles his book on integrity with this: “The Courage to Face the Demands of Reality” for good reason. It takes a boatload of courage to seek out what is truly happening in our organizations. Once we know, the responsibility to do something falls on the shoulders of the CEO and executive teams. Sometimes, dealing with the causes of a toxic culture may require tough and painful decisions that are easier to avoid if we aren’t actively looking for root cause.

The strength and wisdom required to unflinchingly seek out truth is no joke, but the relief that occurs once the situation is productively managed is immense. Recently, a C-level executive confessed that he was stunned by the positive impact on his team once he pulled the plug on a toxic but performing team member. The team reflected on how much more positive energy was released in the aftermath, even though workloads temporarily increased.

Culture Matters
There’s plenty of research that demonstrates the advantages of actively developing culture as a key contributor to company performance:

• 86 percent of leaders believe culture is as an important or very important issue, according to Deloitte Human Cap Trends 2016.

• 91 percent of executives believe that culture is important to their firms, according to Duke/Columbia 2015 research.

• 84 percent of leaders believe that culture is critical to their organization’s success, according to PWC 2013 Culture and Change Management Survey.

• 92 percent of board members say that investing in culture has improved financial performance, according to EY 2016 FTSE 350 Board of Directors Survey.

Despite these beliefs, true action is slow to happen. Consider these further statistics:

• 28 percent of CEO’s report that they understand their organization’s culture, according to Deloitte Human Cap Trends 2016.

• 5 percent said their own corporate culture was exactly where it needed to be, according to Duke/Columbia 2015 research.

• 51 percent believe their culture needs a major overhaul, according to PWC 2013 Culture and Change Management Survey.

• 12 percent believe their organizations are excellent at effectively driving the desired culture, according to Deloitte Human Cap Trends 2016.

The opportunity that exists for organizations to truly leverage their unique differentiator—their high performance culture—to pull away from their competitors is huge. One well known example is Southwest Airlines, whose values include, “A Warrior Spirit, A Servant’s Heart, and a Fun-LUVing Attitude.” Southwest hires for these values, recognizes and rewards them, and intentionally develops them throughout the organization.

The results speak or themselves: after 47 years of service, Southwest is the largest domestic carrier with 24 percent of market share, is the only domestic airline with 45 consecutive years of profitability, and has been rated first by the Department of Transportation’s Consumer Satisfaction Rating for 22 of the last 26 years. Pretty impressive.

We manage what we measure. What’s stopping you?

Ruth Lund is president of The Legacy Center, a firm in Portsmouth that works with organizations to target and develop values-based cultures. For more information visit legacy-center.com or linkedin.com/in/rutholund.

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