With an increasing regularity, ‘Culture’ emerges as an item to be ‘managed’. I fully expect it to be front and centre before the end of the current Royal Commission into the financial sector, as most of the poor practises we have seen , immoral, unethical, and some down-right illegal, stem from a poor culture, lack of leadership in the true sense of the word, and a failure of governance.

Culture pervades every organisation of more than  1 person. It is how we interact, behave, collaborate, and deal with other people in the pursuit of whatever objectives, personal, and commercial that are front of mind, but mostly is just about how the job gets done.

Mundane as that is, culture is the determining factor.

It truly bothers me that an outcome of the Royal Commission may be that a legislated  regime be put into place to regulate culture.  The boffins in Canberra have no idea what it is, and how to define it, but that may  not stop them regulating for it.

It is also a fact that ‘culture’ is an outcome, like a brand, of a host of small  behaviours, interactions, and processes over time that added together deliver an outcome we call ‘culture’. It is not an item to be managed as you would an expense item  in the P&L.

To my mind, culture is grown from the inside, but it responds to the outside environment. Growing a culture is not dissimilar to the Japanese art of ‘Bonsai’, the cultivation of dwarf plants, grown into all sorts of intricate shapes.

The bonsai gardener starts with the raw material of the plant, and the environment in which it will be growing, then over time, it encourages the characteristics they want, and cuts off those that do not want before they can take shape and become an integral part of the plants physiology, disfiguring the outcome. A leader who acts as a bonsai gardener for the growing evolving culture, will fertilise the behaviours that add to the development of the envisaged end result, while nipping in the bud those that do not add to the end result, all the time training others in the art of bonsai.

Making a commitment to the cultural style that suits the strategic and competitive choices being made is a first step.

What culture do you want? It seems to me that the starting point should be envisioning where you want to end up. No different from setting any other objective, as it provides a consistent framework for making those difficult trade-offs and compromises that become necessary. Therefore decide what sort of culture you want, one obsessed with customer service, innovation, operational productivity, attention to detail, whatever it may be, and behave accordingly. All will have elements of each of the others in them, but there should be an overriding objective.

Are you committed for the long term? Culture is not something you erect in a financial year, it is an incremental process, built over time and very dependent on the CEO. It is the boss who makes the running with the culture that prevails, and the boss must simply walk the talk, every single day, in every way. This can be painful, and the board of a business that has the wrong boss needs to make a choice about the culture it wants and recruit accordingly.

What measurement tools do you want to use? There are a lot of choices out there, a simple google search may lead you to the conclusion that this is a task that can be outsourced to a fancy consulting firm with pretty measurement tools. Those that in my experience try and either ignore or outsource ‘culture,’ end up with at best a neutral result, and usually a poor one. Most of the tools used are pretty simple when pared back to their essential elements.

However, the common element is that they are subjective, and only really relevant as a measure of change over time. Treating a measurement of ‘culture’ as an objective measure of performance at a point in time as you would with a P&L to measure profitability will be misleading. It is the trends that really count, not the quantum of any measurement you might take.

Measuring ‘Culture’ like most things can be, and should be, made as simple as possible. This is itself is a challenging notion. Much easier to have a series of complicated dashboards that measure all sorts of things, but are really there just to make those in authority feel better.

Employee referrals and sales leads.  An employee is hardly likely to refer their own networks to the business if they are unhappy.

Customer complaint responses. Timeliness and follow through are always good indications of a customer facing culture. Every business needs customers, and dealing with problems that arise should be a first order task.

Employee turnover, and rehires. A turnover of people is natural, and I would regard as healthy. The tipping point is around the point where they are leaving because they are tired, bored and not learning anything, and where they have acquired new skills and are keen to test them in new challenges. Similarly, capable people who wish to return is a good indicator. Large businesses can also track the internal movement of employees across functions and geographies for the same reasons.

Employee exit surveys. Understanding why employees leave can be a vital piece of information about the culture, and existing management. At exit, employees are often more likely to ‘tell all’ than under other circumstances. Such an interview should be routine, friendly and constructive, and not conducted by the exiting employees line manager, and certainly not  by the HR intern, but by someone of stature in the business.

Employee Survey.  Regular employee surveys  can deliver quantitative data across a range of cultural variables that makes measurement of changes over time possible. It is always better that they are anonymous and done by a third party.  It is usually the truth that you get when you engage with the operating level employees, those on the production line, the truckies, warehouse hands, they see and suffer from the impacts of poor practises every day.

Customer survey, as above.

Supplier survey, as above, and even more important that they be done by an external party, and certainly not by the sales force, or including only those recommended for interview by the sales force. Suppliers are often in a position to give great insights into cultural drivers.

Employee Net promoter Score. NPS is now an established measure amongst customers, there is  no reason  I can see  not to use it amongst employees. It is a more complicated version of employee surveys.

The ‘carpark’ test. If it is a race to get out at 5.00, it is a sign of employee disengagement, a poor cultural outcome, and easily assessed rather than measured simply by being there and watching.  The behaviour being exhibited by operational staff is the ultimate test of ‘culture’, and you can and should observe that in many ways.  How many smiles and greetings does the ‘Boss’ get during a factory walk-through, how happy are staff to interact with senior staff on matters trivial as well as important, how well do senior staff listen to and provide feedback to operational staff, and so on. While I call it the carpark test, it is really just being respectful  of others, building their their sense of personal value, irrespective of their role.

As a final point, we all talk about culture as if it was a ‘thing’. It is not, it is as noted, the gradual, incremental outcome of thousands of individual interactions. You can dictate culture all you like, but it will have no effect. It is only when you change the individual interactions, one by one, that the evolved culture will slowly emerge.

Photo credit: Dave Gammon via Flikr