I tell my management students that executives should focus on one task above all others: developing a positive, supportive corporate culture. When a company has a positive culture, all things are possible. When a company has a negative culture, very few positive outcomes occur.
The problem, of course, is how to assess a culture. How does one know if a culture is positive or negative? It’s perhaps the most important question an executive (or job applicant) can ask. But the answer is murky at best. Further, how can one tell if a culture is getting better or worse? Is the company living up to its professed values? How does one know?
A new company called CultureX may help us solve the problem. Formed in conjunction with MIT’s Sloan School of Management, CultureX uses the millions of employee reviews on Glassdoor to analyze corporate cultures. Along the way, CultureX identifies the most frequent values companies profess, the norms used to promote those values, and how employees view company performance in fulfilling the values.
CultureX uses a range of textual analysis tools to analyze free-form employee comments in Glassdoor reviews. The result is a composite view of what it’s like to work in an organization – from employees’ perspective. As you might expect, employee reviews often highlight what the company actually values as opposed to what it professes to value.
CultureX initially applied its methodology to analyze 1.2 million Glassdoor reviews for some 500 companies. The average Culture 500 company has over 2,000 employee reviews. The analysis identified some 60 “… distinct values that companies listed in their corporate values statements.” From the 60, CultureX researchers winnowed the list down to the Big Nine that were cited most frequently. These are: agility, collaboration, customer, diversity, execution, innovation, integrity, performance, and respect.
CultureX researchers then built an interactive tool which “… provides users a snapshot of how frequently and positively employees … speak about each of the Big Nine values.” Users can see how employees discuss each of the Big Nine – even those that a company doesn’t include in its own values statements.
CultureX uses Amazon as an example of how the tool might be used. Amazon’s employee reviews, for instance, spoke frequently and positively about two specific values: innovation and customer centricity. (Innovation was about two standard deviations above the mean; customer centricity was about one standard deviation above). On the other hand, employees were “much less enthusiastic” about the company’s respect for employees – about 1.5 standard deviations below the mean.
How might one use these data? An Amazon executive might be concerned that employees don’t feel respected. The executive might develop programs to improve the company’s performance. (I’m sure that consultants from CultureX would have some suggestions). The executive could then use changes over time in the “respect” value to monitor progress (or lack of it). Similarly, an executive might compare her own company to any number of other companies – in the same industry or in others – to identify competitive gaps and/or advantages.
But the data are not reserved solely for executives. Want to work for a company that is truly innovative? The CultureX data can help you identify which companies are walking the walk and not just talking the talk. Potential employees can identify companies that match their value set. Companies can identify potential employees whose values match the company’s. With better information, both sides stand to benefit.
CultureX’s work should help us focus more attention on the role of corporate culture in business success. The data set could become a useful platform for investors, executives, employees, and job applicants. So … how’s your company doing?
I was in a meeting not long ago with a client whose organization is undergoing a significant transformation. We were discussing what needed to change and how we might promote the appropriate change efforts. A senior executive spoke up to say, “Well, you get what you measure.” Nobody challenged the assumption behind the thought and we began to focus on how to measure change in the organization.
I had, of course, heard similar statements many times before. Business schools emphasize measurement as a key ingredient of management. As a leader, you point the way, establish some key measurements, and then harvest the results. Sounds simple, doesn’t it?
But think about the things that we don’t bother to measure – or that we don’t know how to measure. These include love, respect, hope, initiative, creativity, open-mindedness, ability to resolve conflicts, receptiveness to new ideas, focus, drive, and resilience. Do we really not care about these things?
We tell managers that the most important thing they can do is build a positive, engaging organizational culture. (See here and here). We also tell them they can only get what they measure. Yet many of the components of culture are simply not measureable. I have yet to hear a manager say, “In the third quarter, we increased corporate resilience by 3.2% compared with the same quarter in the previous year.”
So, how do we help managers build a positive culture even when they can’t measure it? Here are some thoughts:
I think we obsess about measurement because we have a bad case of physics envy. We want our organization to behave like a physics experiment. If we apply Force X, we get Result Y. It doesn’t work that way and never will. Time to get over the measurement mania.
The future is uncertain. Eat dessert first.
If you act on this sage advice, you may well come from a culture that’s high on the Uncertainty Avoidance Index (UAI). As Geert and Gert Jan Hofstede have pointed out, the desire to avoid uncertainty varies dramatically from culture to culture and fundamentally affects how people think and behave.
The Hofstedes (father and son) study the influence of national cultures on organizational behavior. They write that there are five basic dimensions of culture: 1) power distance; 2) individualist/ collectivist; 3) masculine/feminine; 4) Uncertainty avoidance; 5) short-term/long-term orientation. I’ve written about the first three previously (here, here, and here). Today, let’s talk about uncertainty avoidance.
The Uncertainty Avoidance Index measures the degree to which a culture believes that what’s different is dangerous. Countries with high UAIs tend to be anxious about ambiguity and the future in general. They often establish laws, behavioral codes, religions, and technologies that reduce ambiguity. Countries with high UAIs include Greece (UAI = 114), Poland (93), Japan (92), France (86), South Korea (85), Israel (81), and Italy (75).
Countries with low UAIs tend to believe that what’s difference is curious. They are generally less rules-oriented and less anxious about the future. They tend to see the world as a relatively benevolent place and to give the benefit of the doubt to new ideas, situations, and people. Countries with low UAIs include the United States (46), India (40), Great Britain (35), Ireland (35), Sweden (29), and Denmark (23).
Uncertainty avoidance expresses itself in many different ways. Very generally speaking, families in affluent countries with high UAIs have fewer children than those in affluent countries with low UA indexes. People in high UAI cultures tend to be more stressed and rules for children are quite firm. People in low UAI culture tend to be more agreeable and more blasé about children’s play habits. They worry less about health and money.
Let’s say you want to market a product internationally, including both low and high UAI countries. Your message will need to be very different. In high UAI countries, consumers will want to know about the purity and cleanliness of the product. They also value expert opinion in their advertising. In low UAI countries, consumers tend to seek convenience rather than purity and prefer humorous ads.
Similarly, consumers in low UAI countries find used cars acceptable and are more likely to be do-it-yourself enthusiasts. They also tend to be early adopters of new technologies. Consumers in high UAI countries tend to prefer new cars and hire experts to do their home repairs. They’re also slower to adopt new technologies.
In the workplace, differences are equally pronounced. High UAI cultures emphasize the importance of rules – even those that are not obeyed. They also prefer more structure, precision, and formality. Managers should be technical experts and tend to focus on daily operations.
Low UAI cultures have fewer rules in the workplace and value managers who are known more for common sense than technical expertise. Managers focus more on strategy than daily operations. Low UAI workplaces tend to be better at inventing new processes but high UAI workplaces are better at implementing them.
It’s a very interesting mix, especially when you combine uncertainty with masculinity, individualism, and power distance. To learn more, get the Hofstede’s book.
Last week, in Time – The Infinite Resource, I wrote about the “time culture” in your organization. If your organization is like most, you keep close track of how employees spend money and no track of how they spend their time. Yet, management gurus like Peter Drucker, say that time is our most precious resource. If you can’t manage your time, you can’t manage anything.
In my post, I outlined three (of five) time management techniques that McKinsey recommends to make organizations more productive and less stressful. The basic trick is to treat time as a corporate resource rather than an individual resource. In other words, we should treat time essentially the same way as we treat money.
Here are the other two time techniques from the McKinsey article.
Refine the master calendar — to identify things that you can stop doing, you first need to identify (to yourself and others) that you are doing them. This often means a master calendar for key individuals and meetings. In fact, meetings are some of the biggest time wasters. (See the Travis Rule). Make them do double duty. If executives travel to a meeting, ask them to schedule other activities at the same time. Perhaps they can visit customers or schedule personnel evaluations on the same trip. McKinsey also suggests categorizing your meetings. Are they for: 1) reporting; 2) collaboration and coordination; 3) managing performance through course corrections; 4) making decisions? (Not approving decisions, but actually making them). McKinsey reports that, in top performing organizations, executive spend some 50% of their meeting time in decision-making meetings and only 10% in reporting meetings. Less efficient organizations often over-schedule reporting meetings and under-schedule decision-making meetings. By wasting time that also increases stress.
Provide high-quality administrative support – how often have I seen companies lay off relatively inexpensive clerical workers and then ask expensive executives to pick up the task? Far too often. That reduces the time efficiency of your most costly employees and adds to their stress. In McKinsey’s study, 85% of executives who manage their time effectively also report that they have excellent administrative support. Only 7% of the poor time manager report that they have excellent support.
It’s also interesting to note how effective time managers spend their time. According to McKinsey, the best managers are alone 24% of the time. That doesn’t mean they’re not communicating — they could be on the phone or e-mail — but it does mean that they’re not in meetings. They also spend 17% of their time in meetings with customers or prospects and another 10% in meetings with external stakeholders. Taking the three activities together, they spend 51% of their time not in internal management meetings. If you’re trying to organize your time more effectively, that seems like a good number to shoot for.
When effective time managers communicate with others, their preferred method is face-to-face meetings. Indeed, such meetings account for 38% of their communication time. This was a revelation to me. I’ve always believed that meeting face-to-face is the most effective way to communicate. But I never thought of them as time savers. Perhaps because face-to-face meetings do provide richer, more nuanced communications, they also save time in the long run. With richer communications, you make fewer errors — and correcting errors is a huge time sink.
Time, cost, and quality. Pick any two.
It’s a good thought to keep in mind when managing a project. You can choose to optimize two — and only two — of the three parameters. The third parameter will always go in the other direction. Let’s say you want something done in less time and at lower cost. By optimizing those two parameters, you’ve sub-optimized the third – quality will suffer. If you want high quality at low cost, well… it’s going to take a long time. Pick any two.
Interestingly, we only measure two of the three parameters. We have armies of accountants to keep track of how we spend our money. We have quality control experts to measure quality. We have no one who keeps track of how we spend our time. Are we spending our time wisely? Are we allocating our time based on strategic objectives? Who knows? We treat time as an infinite resource.
Though we treat money and assets and goodwill as corporate resources, we treat time as a personal resource. How you spend your time is pretty much up to you. This higher you rise in the ranks, the more you control your own time.
And that’s a practice that needs to change according to “Making Time Management the Organization’s Priority,” a recent article from the McKinsey Quarterly. As the article notes, “Time management isn’t just a personal-productivity issue … [it’s] an organizational issue whose root causes are deeply embedded in corporate structures and cultures.”
How can you change the “time culture” in your organization? The McKinsey article provides six suggestions. To save time, I’ll cover three today and three more in an upcoming post.
Create a time leadership budget – this may sound obvious but far too few organizations actually do it. When you create a proposal for a new project, you always include a cost budget. How about a leadership time budget? You can think of leadership time as a general corporate resource – just like money. Let’s say you have ten executives working on new projects. Assuming, that each works 2,000 hours per year, that’s an overall “budget” of 20,000 hours. If you add a new project, how much leadership time will it take? What will you take away to make the budget balance?
Think about time when introducing organizational change – organizational change takes enormous resources, much more than we typically estimate. That includes time. Yet we often ask managers to change things while also doing their “day” jobs. Establishing a leadership time budget can help here. So can managerial restructuring. My rule of thumb — call it the Travis rule — is that more managers mean more meetings. Reducing the number of managers can (within reason) reduce the number of hours spent in meetings and re-balance the time leadership budget.
Measure and manage time – ask your leaders to keep track of their time by keeping a simple diary. As McKinsey points out, “Executive are usually surprised to see the output from time analysis exercises, for it generally reveals how little of their activity is aligned with the company’s stated priorities.” As the old saying goes, if you don’t measure it, you can’t manage it.
Let’s exercise a little time budgeting here. Most people read at about 200 words per minute. This article is about 600 words long. So you’ve been reading for three minutes. Time to get back to work.