How to measure organizational culture effectiveness

Dear All,

Please suggest KPIs to measure culture effectiveness (other than pulse check through survey)   

  • Harvey Bennett

    | 1605 Posts

    Chartered Fellow

    11 Dec, 2014 10:03

    A definition of culture is "the way we do things around here".

     Who experiences your organisation's culture? Clearly your staff do (as well as being a part of the creation of that culture!) so measures of staff perceptions will be important.

    Also, your customers will experience aspects of your organisation's culture - what is it like to do business with you? (HR departments might like to explore their departmental culture, too........). I think that we can all identify organisation's that we would prefer not to deal with. I have my list....but I won't share as I would rather not be sued.

    In a similar vein, your suppliers of goods and services  will have views about your organisation and whether or not you are good to do business with. Some of the supermarket chains have been getting some really damaging publicity over the past year regarding the way that they treat their suppliers.....not good for their Reputation Management.

    Culture can "just happen", evolving from the early days of the founding of the organisation and from the personal values of the founder(s).

    Or it can be actively managed.

    Managing culture (and getting some measures in place) isn't too difficult.....but it will take an investment of time and effort.

    I was fortunate to work for many years with an organisation that paid great attention to reputation and culture. The key measurable elements  can be summarised as:

    1. Is there a clearly articulated mission and vision statement, routine reviewed by the board (execs and non exces)?

    2. Are the above translated into behavioural standards and communicated across the organisation so that employees know what is expected of them? People managers had standards; customer facing employees had standards, including how to deal with complaints; there were standards for procurement which did not mean just the Purchasing Dept but covered all staff who were in a situation of buying in goods and services; there was a business ethics policy.

    3. Although all the stuff in #2 above is good, the key step is in ensuring it is put into practice. So audit was an important element. External measures included IiP, ISO accreditation, and participation in Brand research by the Marketing function. Customer Satisfaction surveys were carried out using a 3% sample of customer experiences. Then there was the inevitable employee opinion survey, reinforced by 360-degree feedback for all people managers at all levels using a survey based wholly on the Peple Management Standards (no escape!).

    4. Maybe this won't be an option for you, but we were able to easily measure customer retention. Historically, this ran at around 95% year on year. One of the triggers for all this structured intervention was the fact that their was a statistically significant decline in retention to 85%, with its consequent impact upon revenues and in marketing/customer acquisition costs.

     The above tells you about how the "soft side" of the business was managed. There were lots of other actions taken to redress the situation: restructuring, the use of innovative technology, using a more flexible employee structure to cope with geographic and seasonal variations in demand.

    it took about 2 years to get the business back on an even keel.

    i hope that you can see that there are lots of areas to which you can attach KPIs on components of cultural effectiveness


  • Thanks a lot. Really very informative and helpful.
  • Hi Faiza

    I am too looking for ways to measure the organisational culture, other than the employee survey.

    What measures did you implement?

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