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I'm sometimes asked by CEOs, "How can we measure the effect of our work on our culture?" Well, the short answer is that you can't, but the longer answer is that there are definitely things we can measure, and should be measuring, that are important leading indicators of success. Let me explain further.

You Can't Isolate The Variables

The reason I say that you can't directly measure the impact of your work on culture is that you just can't isolate the variables. If your sales or profits increased by 18% last year, was that due to the work you did on your culture, or did you come out with a new product that the market loved, or did one of your biggest competitors go out of business, or did you hire 3 new sales reps who hit it big, or did you kick off a major new advertising campaign? Since a myriad of factors are influencing your results at any one time, it would be misleading to put a specific number on the impact of your culture work. But that doesn't mean there's nothing meaningful that we can measure.

So What Can We Measure?

Those who've read my work before know that I define culture as the day-to-day behavior of your people. If we can define, with real clarity, the day-to-day behaviors that most drive success in your organization, and we can get your people to do those behaviors far more consistently, then it's a small logical step to conclude that you're going to be more successful. So the key then is to measure how much more consistently we are, or are not, behaving in accordance with the culture we're trying to drive.

The best way to measure the consistency of our behaviors is to survey those who interact with our people and ask them what they observe. At HPC, we recommend surveying customers, suppliers and vendors, and employees so that we get a full 360 degree view. We take each behavior (we call them Fundamentals) and we write a statement describing what someone would observe it we did this well. For example, if we have a Fundamental called "Honor commitments," we might write a statement that says, "XYZ employees do what they say they're going to do, when they say they're going to do it." Then we ask the respondents to say whether, in their observation, XYZ employees do this:

[ ] Almost always
[ ] Usually
[ ] Sometimes
[ ] Seldom
[ ] Never

We suggest that a baseline survey be conducted initially, and then a follow-up survey be done each year thereafter, so that we can track our progress. If these are the behaviors that you say will lead to success, and you can verify that your employees are doing these things 20% or 30% or 40% more consistently, it has to be a significant contributing factor to your improved results.

Employee engagement in learning your culture and employees exhibiting the behaviors that define your culture, are the two best leading indicators of success. While we may not be able to isolate the variables enough to quantify the precise impact of your culture work, we absolutely can and should measure the leading indicators.

Contributed by David Friedman, author of Fundamentally Different


Larry Hart

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