Measuring and Managing Culture

For decades, organisational culture has been relegated to the low-end of corporate agendas, largely because it is perceived as intangible and immeasurable. Kind of ironic, then, that machine learning finally provides the missing link.

Quantifying corporate culture has confounded executives for decades; after all, how do you measure something that some describe as ‘an organisation’s soul’? Moreover, how do you measure something that is intrinsically variable; that changes from one organisation to the next?

But culture is measured, and in the hands of skilled practitioners it can be measured accurately and decisively. Currently, there are several models that can assist organisations in identifying and evaluating their corporate cultures. Typically, these models are survey-based and revolve around a number of interrelated themes or dimensions.

McKinsey’s Organizational Health Index (OHI) survey is one such model that goes beyond the run-of-the-mill employee survey. This highly regarded measurement tool assesses 37 individual management practices and nine outcomes against a global database of more than 1.5 million individual responses. From initial assessment through ongoing tracking and evaluation, McKinsey’s OHI sets a benchmark for building a high-performance culture.

But if there is a flaw in McKinsey’s, and other leading global organisational management firms’ tools, it’s that they are survey-driven.

Empirical evidence for the validity of these organisational culture and employee engagement measurement tools rests on survey data alone.

Until now, that is.

Introducing the MIT SMR / Glassdoor Culture 500

June 2019 saw the launch of the MIT SMR / Glassdoor Culture 500 – an online, benchmarking tool that uses machine learning (as well as human skill) to analyse culture using a data set of 1.2 million employee reviews on Glassdoor.

To create the Culture 500 tool, the team at MIT SMR analysed the Glassdoor reviews using what they call a ‘natural language processing’ (NLP) methodology. Essentially, algorithms that classify words extracted from the reviews into more than 90 culture-related themes or topics.

Powered by Glassdoor’s deep data set, and applying MIT SMR’s unique NLP algorithm, the Culture 500 creators have provided – as a true global first – a tool that compares the cultures of some of the world’s leading companies that, together, employ over 34 million people.

Employees speak from experience

But what validates the Culture 500 as such a powerful culture measurement tool is its data source: employee reviews. Because here’s the undeniable truth: Employees speak from experience. And with platforms, such as Glassdoor and Yelp at their fingertips, employees are able to speak openly and freely.

The same can’t always be said about employee culture and engagement surveys.

For the Culture 500, the team at MIT SMR have used Charles O’ Reilly and Jennifer Chatman’s definition of culture as, “a set of norms and values that are widely shared and strongly held throughout the organisation.”

Within this definition, values signal what matters to employees; what they uphold as vital and important, while norms provide the behavioural guides that align with the values – or not.

Using O’ Reilly and Chatman’s definition, the Culture 500 team has developed a theoretical framework within which they have identified and classified common organistional values, condensing them down to what they call, ‘The Big Nine’: agility, collaboration, customer, diversity, execution, innovation, integrity, performance and respect.

In calculating the Culture 500, the team matched the number of employee reviews that mention the corporate value (incidence), against the percentage of reviews that describe the value in positive terms (sentiment).

At its most simple, the Culture 500 provides an overview of how frequently and how positively employees in a company talk about the Big Nine values.

It’s interesting to note that the majority of organisations in the Culture 500 are for-profit companies, and that most of them are US-based.

What makes the Culture 500 a truly significant and breakthrough body of work is how it can be used within organisations – as a benchmark, yes, but also as a signpost for cultural direction, helping companies see what matters to employees, and why.

In a world where leaders are beginning to appreciate the power of organisational culture for competitive advantage, it’s a tool that finally provides the missing link: definitive measurement.