Assessing Organizational Culture Made Simple

Originally published in Forbes.com

Smart leaders keep their fingers on the pulse of their organizations. Why? Because culture can determine whether the business succeeds or fails. Culture is the soul of a company.

Often, leaders ignore culture unless the workplace becomes toxic. Over the past few years, the news has been filled with stories of companies engaged in misdeeds that became public. And almost always, the stories attributed the actions to cultures that allowed, if not encouraged, the behaviors. The companies experienced damage to their reputations while also harming employees and, in some cases, society at large.

Companies where work is mind-numbing or leaders tolerate bad behavior are unlikely to survive for the long term. A 2019 report by the Society of Human Resources Management (SHRM) reported that toxic work cultures can result in:

• Drops in productivity
• Deterioration of employee well-being
• Loss of profits

The good news is healthy cultures can provide a clear competitive advantage for companies. When employees trust each other and feel valued, they are more engaged with their companies and their work. And high levels of employee engagement translate into greater company success.

The greatest competitive advantage comes from sustainable cultures. These workplaces are much more than just healthy. Companies with sustainable cultures have a powerful sense of who they are. The belief that corporations have a responsibility to make a positive contribution to society is central to their identity. Values guide decision-making and collaboration with individuals and groups outside of the organizational boundaries is the norm.

Companies with sustainable cultures gain a competitive edge because they are superior to their less sustainable peers in attracting talent, and are more successful financially over the long-term.

Since organizational culture is vital to a company’s success, wise leaders take steps to understand it. You don’t have to spend a lot of time and money to get a decent picture of what is going on in your organization. Begin with a quick culture assessment by following these steps:

Step 1: Review your stories.

The stories that you tell provide clues to your existing culture. Think about the tales and legends that people within your company recount repeatedly. What do they tell you about your workplace environment?

As an example, consider the anecdotes told by employees of a well-known transportation company. They describe how people who typically didn’t work well together collaborated seamlessly across boundaries during the 9/11 crisis and Hurricane Sandy. Their stories depict heroes, those who worked tirelessly at a great personal sacrifice. These narratives indicate that their culture is crisis-driven and hero-based.

Upon reflection, the leaders of the organization questioned whether their existing culture would support longer-term success. They explored the organizational characteristics they believed would serve them well going forward. They devised different stories that depicted their hopes for the future.

Once you have recounted your own stories, take stock of whether they reflect the culture you need to support your long-term goals and commitments to your stakeholders. Then develop the narratives of what you hope people will say about your organization in the future. These stories form a detailed picture of your desired culture.

Step 2: Check on how your employees view you!

Perceptions of leaders are central to the culture. Therefore, the second step in assessing your culture is to find out how employees view you. And don’t take for granted that you already have the answers. Leaders are often wrong about what their employees think.

For example, a large, global company brought in consultants to determine whether their culture was helping or hindering their purpose-driven, sustainability strategy. They assured the consultants that everyone throughout their company understood top-level leaders’ commitments. They suggested that the consultants concentrate on aspects of the culture unrelated to leadership. 

The leaders were shocked when the consultants’ assessment revealed employees’ skepticism. Employees said that leaders’ behaviors did not align with their stated commitments. Whether the leaders deserved this reputation is beside the point.

There is a difference between presenting a clear vision to someone at my level and having a clear vision that drives decisions. I know that our leaders talk about their long-term sustainability goals. But I haven’t seen them ever pass up a short-term profit because of their so-called commitments.

Employee comment on Culture Survey

The leaders determined to get at the root of why their employees doubted the sincerity of their commitments. They assembled employees throughout the company to discuss their perceptions of the disconnect between leaders’ words and actions.

Seek out objective evidence of how your employees view you without delay. You don’t have to hire consultants for this task. You can start by looking at what employees are saying about you and your company on social media or on websites that enable people to comment on their employers.

Consider creating an open forum where employees can talk about what they have observed versus what they would like to see. If you suspect a lack of trust might keep them from being candid, try an anonymous process. Put out a suggestion box or administer a short survey.

Step 3: Observe behaviors.

Culture shows up in behaviors. Note how employees act when they are in meetings such as town halls or cross-functional team gatherings. Do they ask questions? Do they offer their opinions? Do they seek out and listen to the views of others? Do they challenge the status quo? If you answered no to any of these questions, you might have a problem with trust in your organization.

Or, perhaps, your culture doesn’t truly value diversity. Observe how your leaders react when challenged with ideas that differ from the status quo.

Senior leaders of a global automotive company brought their teams together to discuss some quality-related challenges. They told those assembled that they wanted to hear their thoughts and ideas, no matter how divergent from the mainstream. Most of the attendees said nothing. And when a few brave people did bring up suggestions counter to the norm, the leaders argued with them and suggested that their ideas were not worthy. This behavior demonstrated that the culture did not welcome diverse points of view nor challenges to the status quo.

Step 4: Discuss how people interpret the company values.

Ask your employees to describe how the company values show up in behaviors. Their answers will shed a bright light on the culture. If employees can’t say how values guide decisions and actions, then they are not truly embedded into the culture.

Values that companies claim as their core often are ambiguous. Vague terms like respect, integrity, teamwork, responsibility show up on companies’ lists. But what do these words mean within your company? Discuss the implications of the value statements with your employees. Work towards developing a consensus on behavioral standards.

For example, if a stated value is respect, determine how it should show up in action.

Conversely, describe behaviors that should never occur in a respectful culture. Does the value apply only to how employees treat each other or are the implications broader? These discussions not only serve to assess your current culture; they can also lead to greater consensus on the desired future culture.

Conclusion

At some point, you may want to do a more in-depth evaluation of your workplace environment by hiring objective third parties. They can administer surveys, conduct focus groups, or observe and interpret behaviors. However, in the meantime, follow these four simple steps to develop a snapshot of your current culture. Understanding where you are now is the prerequisite to improving.

Want more help in assessing your culture? Take a look at our Sustainable Leadership and Culture Assessment (SCALA).