Over the past few years, many organizations have realized how important their company culture is. From the way they treat employees, hire new ones, to how their employees treat each other, culture is a fundamental ingredient to an organization’s success. When it’s bad or nonexistent, it’s costly, as Walmart recently found out.
A few years ago, Walmart had a problem. Sales were falling at its stores and only 16% of them were meeting the company’s customer service benchmarks. The company’s revenue dropped for the first time in decades.
Walmart’s executives cames up with a solution: pay people more, train them better, and give them more opportunities for growth. Not exactly rocket science, but a huge shift for the world’s largest retailer who had built their company on keeping costs down to offer huge discounts. They may not have come out and said it, but the bottom line was that even at Walmart, company culture matters. For decades Walmart had thrived by offering incredible value to customers. Now they were trying to save the ship by offering value to their employees, too.
The key is to always pay attention to your culture, even when it seems like you don’t need to. Quite simply, proactively nurturing a positive, company culture is one of the best investments of time, energy and money that an organization can make. Creating a structured process do that will save your and your team countless headaches by giving you the information you need ahead of time to keep your organization on track when things are good and, more importantly, when things are on fire.
The difference between a stellar and mediocre company culture can be more subtle than you think. On the surface, things may look fine while major problems are simmering or vice versa. That’s why adding objectivity and data into the equation is crucial. Here’s how to do it.
Test Your Values
Organizational values set the tone of your culture, but espousing them and practicing them are two entirely different things. So, it’s important to figure out whether your culture is actually working or not. A good way is to do so is come up with questions about your culture and ask every person in the organization to answer them anonymously.
You probably only need five to ten questions in total. For instance, you could ask everyone if they are happy, if they think the organization is innovative, and if they think the organization is open to diverse viewpoints and perspectives. You want questions that are general enough to be easily interpreted and answered, while also offering insight into how your people view the organization.
After you see the results, share them with the entire organization, and create opportunities to have a dialogue. In some cases, a place that supports anonymity like Tinypulse may be best, but it can also help to have a open conversations with smaller teams about the results and about your organization's culture more broadly. From there you’ll have a pretty good idea of where you culture is working, and how it can be improved.
Install Abundant Feedback Loops
Culture is created by every single individual, and can be undermined just a handful. That’s why it’s important to have numerous and regular touch points to assess your culture. Feedback loops ensure that things, negative and positive, don’t go unmentioned or unnoticed for too long, and also offer the opportunity for regular course corrections as necessary.
Every stage of the employee lifecycle should have regular feedback loops, from the initial outreach phase with candidates to exit interviews when staffers leave the organization. It may sound like lots of work, but technology is making it easier than ever to collect troves of valuable information fairly often. Many ATS’s feature feedback solutions within their platform, and services like SurveyMonkey make it exceptionally straightforward to create detailed polls and then widely distribute them. With this kind of information, you’ll see issues before they become problems, learn what things are working well, what people care most about, and what things need to be fixed or addressed before they get worse.
When collecting feedback, be sure to mix yes and no questions with open-ended questions so that you get a holistic view of what’s happening. Including subjective feedback will make it easier to interpret the data you’re getting, and let you figure out what is driving the trends and changes you see. That makes it easier to diagnose potential problems and double down on effective strategies.
Lock In KPIs and Benchmarks
All that data can become overwhelming without context. That’s why setting up internal company culture KPIs and benchmarks are essential to fully leveraging the data you collect. If you’re not sure what kind of benchmarks are reasonable or how to create decent KPIs, Lever’s Recruiting Benchmark’s or Greenhouse’s KPIs are a great examples of strategically using KPIs and benchmarks to drive improved performance. It’s important that KPIs can be tracked over time, boiled down to a single number, and make comparisons easier to come by. Effective KPIs keep you honest by helping you avoid meaningless vanity metrics and instead focus on those metrics that have an actual bearing on your organization’s health.
Here’s a few KPIs that can help you track your company culture:
Employee Referrals - If people want their friends to come work at a company, that’s usually a pretty good indicator that they’re happy.
Absenteeism - Keeping track of absenteeism rates on a week to week or month to month basis can tell you very quickly if people are happy at the office. Segment out the data for teams, divisions or certain seniority levels to know if problems are isolated or widespread.
Employee Churn - How many people leave the organization during a given period of time. You can’t prevent everyone people from leaving, but upticks may indicate that you have a bigger problem than performance-related churn on your hands.
Employee Satisfaction Index - What percentage of your employees say they are happy? How happy is the average employee?
Average Tenure - Long-term employees are usually the happiest and most productive, which means there’s a powerful financial argument to be made for keeping your employees as long as possible.
Diversity Metrics - Tracking the breakdown of your staff tells you whether your organizational cultural supports diverse experiences and viewpoints or does not.
The best KPIs tell you that you have a problem ahead of time, thereby letting you fix the issue proactively. Effective benchmarks allow you to evaluate performance. Using both to track your culture will keep your team ahead of the curve when it comes to nurturing your company culture.
Remember, too many KPIs can muddle the process. Typically seven or fewer KPIs is optimal. This allows your team to stay focused on the most meaningful without muddling the process. Also, KPIs must be actively evaluated over time. A great KPI one year might not be so great the next, so ensure that they remain the most valid ways to gauge your culture. If not, come up with better ones.
Your company culture is created by actively promoting positive behaviors, activities and mindsets. The same goes for the nurturing process. Great culture comes from people caring enough to make things better, and that includes you.
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