The Importance of Tracking Culture in Your Company
Businesses are bombarded with data daily – revenue data, turnover data, expenses, customer acquisition – and it can be very overwhelming. One data point that seems to be missing from many of these action plans is culture change. That can be detrimental to a business. Do you track culture as a metric within your business?
Over the past couple years, we undertook a couple of culture-focused projects. Until then, we didn’t pay close enough attention to how established businesses managed (or failed to manage) culture within their company. We were working heavily with early-stage startups who hadn’t taken the wrong turn toward bad culture. Most times were too early to have any established culture. Being an innovation consultant, we hadn’t seen the impact that such culture can have on ideation and turning ideas into solutions. Most startups are equipped to do that because that’s all they know at that stage, and corporate structure hasn’t had a chance to squash or deter those efforts. A few big turning points in our understanding and changes in our approach stand out: our first culture survey results, a business competition, and a factory tour.
Tracking Culture
In 2017, we were tasked with helping a company in the financial sector to make big changes. They had faced a couple years of upheaval. Their board of directors needed help understanding what was going wrong internally and how to improve the situation. The board members were told that things were on track. The numbers looked good, but there was an underlying discomfort that had them on edge. They decided to bring our team in to investigate. At that point, we hadn’t facilitated a company-wide survey to assess problems and opportunities, but we were ready and excited to create it, then dig in to the data. Little did we know, we would uncover several culture killers.
A couple weeks after the survey launched, we prepared the just shy of one-hundred page report. Then, we presented it and our solutions to the board and executive team. We were excited for the opportunity to dig in and launch our proposed strategies. We were hopeful that everyone would see the evidence and jump on board. What happened couldn’t be further from that. They decided to bring in a team builder they used a couple years earlier to see if they could overcome some of the challenges in their business that we uncovered. Our work was needed, but we were seen as the deliverers of bad news. We had launched the iceberg that took down the Titanic instead of being one of the rescuing ships.
Following Up
We recently followed up with this company, 15 months after our contract ended, and received the first bit of positive news: they are using our report in their strategic planning for the upcoming two years. Apparently, ignoring and trying to put a band-aid on their deep-seated culture issues isn’t working for them any longer. Thankfully, we gained opportunities with other companies to test and prove our theories and methods, though we would love to return and implement them with our initial contact.
Last spring, coming fresh off of the rejection of the survey, we decided to enter a business competition. The goal of the challenge was to take a problem that existed in a regional business sector and prove that there’s opportunity to find a solution. We decided to tackle the manufacturing sector, and started researching problems that exist in that sector. It didn’t take long before we noticed a thread that we decided to tug on. A lack of culture and proper onboarding for new employees, especially relating to mergers and acquisitions, were causing huge numbers of turnover and profit loss.
The Research
Over two days, research led to one hundred data points that supported our theory: when a target company is created in an M&A, culture and integration into the target company’s culture is not tracked as a data point, and a lack of cohesive onboarding to the new culture causes close to a 20% attrition rate of employees from the merger on both side (acquiring and acquired company). We presented our findings with proposed opportunities for the solution and ended up receiving a grant from University of Notre Dame. Over the past year, we have been working toward creating a software that can help companies, especially those involved in a merger, to create data around their company culture and implement additional training and professional development that help keep everyone on a cohesive track.
The Big A-Ha
Our last revelation on the importance of integrating culture into innovation consulting came when we approached a contact made during the business competition. He invited us to his manufacturing facility, and of course, we accepted. We have been on dozens of industry floors, but this tour was very different. Instead of starting the tour in a specific department, the owner started the tour in the employee restrooms. That was the last place most manufacturing plants want you to start – many are utilitarian, bright white and stark, and definitely not something you want to show off. This company, understanding the importance of an established culture, did something very different – they had fully upgraded, high-end, and attractive comfort stations.
Our next impression was how clean every square inch of their facility was. Every employee took pride in what they did. That included making sure that their spaces were clean (and not waiting for someone else to come and take care of it for them). The design of each department changed to specifically meet the needs of that department. Employees built, created, or implemented solutions that they needed to be at peak performance. For many projects, a special task force investigated internal processes and employee issues to create solutions. Their approach on culture and innovation was near textbook, but only because it was absolutely intentional. Their business looked like what we want each of our clients to look like when we complete our contracts, but this company figured it out on their own after years of dissatisfaction.
Why Culture Matters
The point of these three stories is this: culture, and tracking culture, has to be at the heart of every company that wants to grow and become future-proof. Innovation cannot thrive in the wrong culture. Attrition and turnover will continue in the wrong culture. Unless every single person focuses on the same outcome and heads in the same direction, a company’s culture will splinter apart and break.
Without continuous focus and development by your staff, the right culture cannot sustain. Without consistent tracking and treating culture as a measurable data point, you will fail to see the problem until the effects are too large to ignore. A lack of cohesive culture and the turnover it causes can be an extremely costly problem to have. Your company doesn’t have to face years of dissatisfaction to make the right moves. Hiring an experienced innovation consulting firm can help you to find, analyze, and overcome culture and innovation barriers and get your company moving in the right direction.
