Organizational culture

Measuring Organizational Culture

Understanding the organizational culture provides insights into the inter-relationships, and behaviours, of people within the organization, which in turn explains why an organization acts in manner that it does.  Measurement of the organizational culture helps in assessing the strength and weaknesses of values and beliefs that shape these inter-relationships and behaviours.

Measurement of organizational culture is also well studied and documented subject. We have taken up here only a tip of these in-depth studies, to brief us about a few techniques and their strengths and limitations.

One typology that has received a lot of research attention is the Organizational Culture Profile (OCP) where culture is represented by seven distinct values (Chatman & Jehn, 1991; O’Reilly, et. al., 1991).[1]

Dimensions of Organizational Culture Profile (OCP)

                             Dimensions of Organizational Culture Profile (OCP)
Adapted from information in O’Reilly, C. A., III, Chatman, J. A., & Caldwell, D. F. (1991). People and organizational culture: A profile comparison approach to assessing person-organization fit. Academy of Management Journal, 34, 487–516.

There is one prerequisite in all organizational culture cases that makes it strong – corporate culture analysis.

To do it, there are several methodologies that can help you take a look at your corporate culture and values.

BNS (Business Needs Scorecard) to Measure Positive and Potentially Limiting Values, is one of the most precise methods to measure organizational values.

BNS as a diagnostic tool in cultural value assessment that uses 6 sections to categorize positive and potentially limiting values:

  • Finance – values that impact the growth of the company in terms of profits and financial performance.
  • Fitness – values that describe productivity and the general performance of your employees.
  • External relationships – values that affect your company’s relationship with outside players, including partners and customers.
  • Evolution – values that impact creativity and innovation of your company as well as its growth in comparison to your competitors.
  • Culture – values that influence communication and trust between the employees and corporate leaders.
  • Contribution to society – the alignment of your corporate values with the values of society.

This method allows you to perform a comprehensive analysis of your corporate values, especially from the perspective of leadership and what it takes for you to observe these values as a leader.

OCAI (Organizational Culture Assessment Instrument) Method to Measure Organizational Culture helps in measuring the active and passive values. It uses the so-called Competing Values Framework.

This method uses a diagram, which helps to identify the direction that the organizational values work towards:

Image credit: OCAI-Online

The result gives an answer about which corporate culture dominates in the company, indicating the changes that need to be made to create the organizational culture the leadership aspires to build.

Employee Surveys for Precise Engagement Rates is one of the most informative and precise ways to measure organizational culture. Besides, you actively engage your employees in creating your organizational culture.[2]

Since May 2016, Dr Tom Reader and Dr Alex Gillespie have led an academic research project to develop a new approach to measuring corporate culture. Funded by the AKO Foundation (a UK charity), this research has produced the Unobtrusive Corporate Culture Analysis Tool (UCCAT).

UCCAT is a theoretically based and scientifically tested methodology for analysing and benchmarking corporate culture. Uniquely, rather than gathering employee interviews and questionnaires to assess culture, UCCAT analyses publicly available data (e.g. annual reports, financial records, press releases and databases) indicative of a company’s cultural ‘footprint’. These data points are termed “unobtrusive indicators of organisational culture” (UICs). Each UIC represents an observable and measurable aspect of organisational activity indicative of culture (e.g. research spending, customer engagement), and can be understood as a ‘dipstick’ into a company’s culture. When aggregated together in terms of cultural dimensions, UICs allow corporate culture to be assessed from the ‘outside’.

The final UCCAT tool consists of 60 unobtrusive indicators of culture (UICs) which are grouped into 6 dimensions of corporate culture (with 10 UICs used to measure each dimension).  The following Table presents the definition for each dimension, and a single UIC indicative of it.

As can be seen in this table, each UIC is scored in terms of being positive or negative. If the data is not clearly positive or negative, then the UIC is scored as indeterminate. If data is not available, it is coded as missing. Where all 60 UICs are scored for a company, this leads to two key scores.

First, for a given company, each corporate culture dimension is scored in terms of positive UICs minus negative UICs (so 6 positive indicators minus 4 negative indicators would derive a score of 2). This provides an insight into those aspects of corporate culture for which an organisation is strong or weak.

Second, for a given company, an overall corporate culture score is derived through calculating the total number of positive UICs minus negative UICs (so 40 positive indicators minus 20 negative indicators would derive a score of 20). This provides both an overall assessment of corporate culture (in terms of positivity), and is used to benchmark companies against one another.

Several case studies were conducted with the help of UCCAT. Three key observations can be made from the results of these case studies. The anonymity of the companies examined is reserved.

First, the corporate culture profiles generated through UCCAT appear to discriminate between companies. For example, the sample’s two joint overall top performers had 23 more positive than negative indicators compared to the sample average of 7.3. They were also top performers in the dimensions of Transparency, Governance and Customer Focus, for instance with online archives of accessible company documents going back 28 years.  Conversely, the company with the sample’s poorest overall performance had 28 more negative than positive indicators: with Governance, Transparency, and Planning being particularly problematic.

Second, UCCAT provides specific insights for understanding the culture of companies. For example, one of the strongest performing companies (e.g. in terms of Employee Focus and Transparency) performed poorly on the dimension of Customer Focus. Conversely, one of the weakest companies (e.g. in terms of Governance, Customer- and Employee Focus) performed well on Transparency. Thus, UCCAT is able to identify cultural dimensions that should be monitored and potentially investigated for both weak and strong performers.

Third, some comments can be made about the patterns of UICs for each company. UICs such as “adapting to a negative event” focus on signs that a company is improving its culture: for example, by admitting and demonstrating willingness to learn from negative events. Other UICs focus on rarely occurring but highly concerning indicators. For example, the UIC of “adjusting CEO bonus”, which reveals problems in governance whereby failure is rewarded. Crucially, no single UIC or culture dimension can be used to determine corporate culture. Rather, overall patterns are telling, and paint a picture of corporate values and practices.[3]

Traditional methods provide static, or at best episodic, snapshots of organizations that are constantly evolving. And they’re limited by researchers’ tendency to assume that distinctive and idiosyncratic cultures can be neatly categorized into a few common types. Several researches have used big-data processing to mine the ubiquitous “digital traces” of culture in electronic communications, such as emails, Slack messages, and Glassdoor reviews. By studying the language employees use in these communications, we can measure how culture actually influences their thoughts and behavior at work. The Big-Data Analytics have ushered in a new scientific approach to measuring culture.[4]

Measurement of organizational culture acts as guide to the roadmap for improving culture and the performance –

  1. Measurement helps in informed decision-making
  2. Helps in understanding what resources will be required and where and when to invest for better RoIs.
  3. Involvement of a wide spectrum of people in the process of management helps in their better understanding of the culture-related issues, and also helps build better engagement.
  4. Better decisions, by more engaged people and more cohesive culture leads to improved performance.[5]

[1] Measuring Organizational Culture

[2] How to Measure Your Organizational Culture and Values by Ryan Pell

[3] Developing a tool to measure corporate culture from the ‘outside’ – Brett Heasman

[4] The New Analytics of CultureMatthew Corritore, Amir Goldberg and Sameer B. Srivastava

[5] The Importance of Measuring Organizational CultureAndrew Barenz, Client Engagement Associate