A study from Columbia University and Duke University found that 92% of CEOs and CFOs believe that improving their company’s culture would increase its value — not just in terms of increased employee engagement or job satisfaction but also better financial and operational performance.
“Culture matters,” said MIT Sloan senior lecturer during a recent MIT Sloan Management Review webinar. “A good culture can help boost performance; a bad culture can really harm performance. Maybe the most interesting finding from this survey was that only about 1 in 6 of these executives … said their culture is where it needs to be.”
Organizations can take a variety of steps to close that gap. Sull highlighted three instances where companies might be missing opportunities to promote a more positive work culture.
AI can offer insights into culture
Some organizational experts believe that the introduction of artificial intelligence will silence human voices in the culture conversation, but machines can help managers better understand people, according to Sull.
Consider an organization’s annual engagement survey, which often includes dozens of questions that are multiple-choice or based on a 5-point scale. The longer the list of questions, the more likely employees are to switch to answering on autopilot — frequently choosing 4s and 5s, or 1s and 2s — and thus the nuances of the organization aren’t captured, Sull said.
But more leaders are turning to people analytics — a data-driven approach to improving people-related decisions — to understand their employees, and this is where machines can help. For example, Donald Sull and his CultureX co-founder, Charlie Sull, used natural language processing for their recent research. They used an AI platform to sort transcribed employee interviews into hundreds of topics around culture, employee experience, and leadership.
“We’re able to see what people talk about and then how positively and negatively they talk about it,” Donald Sull said. “Then, once we’ve structured this unstructured data, we’re able to conduct analysis.”
Once organizations install effective listening tools, it will be easier to respond to issues that are important to employees but weren’t necessarily on the radar of leadership due to the limitations of traditional engagement surveys, Charlie Sull said.
Done thoughtfully, layoffs can reinforce culture
Employee layoffs can be difficult situations to manage, but they can also be an opportunity to strengthen an organization’s culture.
One approach is to frame an employee’s exit — whether voluntary or involuntary — as the departure of someone who wasn’t embodying the organization’s values or social norms.
“Unfortunately, most companies don’t do [layoffs] that way,” Donald Sull said. “It tends to be last in, first out, or whoever’s least politically connected gets laid off. They don’t think about culture when they’re thinking about subtraction.”
Additionally, layoffs can sometimes open up vacancies, giving leaders an opportunity to hire people who reflect the organization’s culture.
“If you promote those employees to management positions who embody the values and norms that you aspire to, that can reinforce the culture,” Donald Sull said.
Use in-person time to its full potential
Post-pandemic, employees might not be in the office every day, but that doesn’t mean that they don’t care about culture.
Leaders trying to build and maintain a healthy culture likely don’t have the same amount of in-person time to do it. That means organizations and leaders need to be more mindful about framing on-site time as an opportunity to shape culture and social norms, Donald Sull said.
“You can’t afford to be sloppy if you only have employees in the office three days a week,” he said. “Frankly, you can’t afford to be sloppy if you have them in the office five days a week, but it’s even more pronounced with a shorter workweek.”