A corporate culture transformation initiative is an expensive undertaking, both in terms of tangible and intangible costs. When done well, the long-term benefits will outweigh the costs — but how do you measure that? After all, a lot of what makes an organizational culture great is intangible.
The true focus shouldn’t be on measuring the culture, but on measuring outcomes that are impacted by the company culture. This is easier and more practical, and since financial stakeholders are interested in the value the organization is providing, these metrics will be valuable information for them as well. Of course, what gets measured will depend on the goals of the culture transformation initiative, because the impact may be different depending on what’s changing. Here are five ways you will be able to tell if your culture transformation was a success or not.
1. Empowerment or Engagement
When you’ve changed your organization successfully, you should see increased employee engagement and empowerment. If your change management hasn’t been up to par, your employees are likely to be less engaged than they were at the beginning of the process. Keeping your desired outcome in mind, develop a list of questions or characteristics that will measure the engagement of your workforce. Key questions to ask and areas to consider when assessing engagement and empowerment include:
- Do employees willingly participate in projects or events, or is management seeing only minimal participation in the context of “required” meetings?
- Is work completed at a high level, meeting deadlines, and exceeding expectations?
- Do employees speak up when they have new ideas or a better way to complete a project or task, or do they only follow protocol, even when it’s inefficient?
- Are employees willing to take ownership of projects? Do they welcome challenges or shy away from new opportunities?
A common goal of culture transformation initiatives is to increase innovation. The first step of innovation involves coming up with something new, either by generating ideas, or synthesizing existing ideas into something new by combining concepts in unexpected ways. These ideas can be related to any part of the business, including products or services, internal processes and procedures, customer experience, and so on. Innovation occurs when ideas follow a rigorous process that brings them to fruition. The measurement of an innovative culture is based on how many new ideas have been executed, and how much value was realized from those ideas.
If you have initiated changes within your sales team, either to equip it to deliver a new product or service, to approach a new market, to approach existing markets in a different fashion, or to adopt new tools or ways of behaving, measuring success is typically straightforward. The intention behind this type of transformation is clearly to grow sales and customer loyalty. Some questions to ask include:
- How do our sales since the culture transformation happened compare to before?
- Are we retaining our customers for longer than we did previously?
- Are we able to up-sell or cross-sell products more easily now?
- Are our sales reps able to follow programs and protocols?
4. Customer Focus
Measuring the achievement of customer centricity through culture change should be twofold. First, survey your customers. This information will be even more valuable if you do a customer survey before the initiative begins, because then you can compare the results before and after the transformation. Second, look at the areas you would expect to be affected by better customer experience. Statistics for loyalty, repeat business, invoice or check size, and referrals are all indicators. Key questions to investigate include:
- How do our customers feel about our performance since we initiated this change?
- How likely are our current customers to recommend us to a friend or colleague?
- Has our repeat business increased since starting this change?
- How much has our average sale size increased?
5. Leadership Excellence
When leadership competence is a component of organizational change, as it often is when culture transformation is occurring, measuring success can be difficult. Some form of 360-degree assessment is important in order to determine how well leaders are adopting the new behaviors, but that is only part of it.
We know that the quality of any organization’s output is directly tied to the quality of its leadership. The measure of great leadership is the overall performance of the organization. Therefore, the best place to look for the measures of the transformation are the measures already in place that evaluate the overall success of the organization, such as productivity, employee turnover, speed to market, working capital, sales-per-employee ratios, process improvements, or waste elimination. Each of these is the direct result of leaders leading people. If the leadership is great, then the performance of the people will also be great, and as leadership competence improves, so will overall performance.
These questions are intended to get you started. As you plan for a culture transformation within your organization, be sure have captured the current state of the things you’re changing so you have the ability to make meaningful comparisons. Tailor the metrics to the objectives you are trying to achieve. If you can do that, you will be able to accurately determine the return on your investment.