Measuring Culture to Manage Culture

January 28, 2022 – As the ramifications of COVID-19 continue, broad and lasting changes to the workplace have advanced a more integrated approach to talent management built around culture. Organizations that used to synchronize their talent to corporate vision, core values and strategic objectives are now aligning people around purpose. And for good reason: Building sustainable cultures in the long run will attract, engage, and retain talent – and give organizations with strong cultures a key competitive edge, according to executive recruiters.

Eighteen months ago, as the pandemic settled in globally, Washington, D.C.-based consultancy THRUUE commissioned a study of leading thinkers in strategy and culture from around the world. The firm was looking to understand the long-term implications of COVID-19 on company culture. “Early on, we observed that the social contract between employers and employees had shifted dramatically toward the side of employees and that a renegotiation of the social contract between the two parties was imminent,” said Philipia Hillman, the firm’s vice president of talent and client solutions, and Daniel P. Forrester, founder and chief growth officer, in the subsequent report. “By social contract, we mean the spoken and unspoken agreements between employers and employees about nearly every aspect of work, including recognition, compensation, commuting, safety, hybrid/remote work, business travel, onboarding, performance coaching, home/work balance, and more.”

What’s clear today, they agreed, is that while new norms, assumptions, and employees’ wants and needs are surfacing, “traditional contracts that haven’t yet been renegotiated are creating friction and fear between parties.”

The report cited a recent interview with Karin Kimbrough, chief economist of LinkedIn, on the television news show “60 Minutes” about the recent trend of early retirements by Baby Boomers as well as Gen Z workers. “People have been living to work for a very long time,” said Ms. Kimbrough. “And I think the pandemic brought that moment of reflection for everyone. ‘What do I want to do? What makes my heart sing?’ And people are thinking, ‘If not now, then when?’” Women, she added, have been leaving the workforce at a higher rate than men. “In all, the highest ‘quit rate’ since the government started keeping track two decades ago,” she said.

In the Driver’s Seat

“At the nationwide level the number of Americans quitting their job is higher than ever….We can see what sectors people are quitting,” said Ms. Kimbrough. “Retail sectors and hospitality sectors. It may not just be worth it for some folks. And so in some cases people are quitting and they’re not yet returning. They’re taking a break. Americans are burnt out. I like to think of it is a ‘Take this job and shove it,’ measure. But it’s just a sign of people saying, ‘You know, I don’t need this.’”

Transforming Corporate Culture and Driving Performance in the New Workplace
As organizations begin to look at the matter of if, when and how they will transition back to traditional workplaces, leaders are fielding a number of questions: What will the office look like? Will it be safe? Will it ever be the same again? Can we have a high-performance culture with so many people working remotely?

“We know that some team members will happily return to offices, while others will choose to visit the office as needed, and yet others will continue to use their home office as a base of operations,” Marty Parker, president and CEO of Waterstone Human Capital, said in a new report. “The impact of these changes on corporate culture cannot be overlooked; nor can the fact that now more than ever, organizational culture will be the driver of competitive advantage and performance. Your culture will differentiate your organization more than anything.”

Ms. Kimbrough said it is as if the social contract of work is being rewritten: “And right now, the worker is holding the pen,” she told the news show. “There are thousands upon thousands of available jobs in America right now. And companies are eager to hire. But workers are being very choosy. Employees are in the driver seat.”

Related: Five Things to Consider When Creating a Company Culture

“THRUUE’s best thinking continues to be that it’s only with humility, dialogue and data on culture that leaders can navigate what we call The Great Renegotiation,” Dr. Hillman and Mr. Forrester said. “That renegotiation is still unfolding, and it will be years before we will establish a new equilibrium. Still, it’s decidedly in the favor of employees right now.”

Addressing Culture Gaps

Employers, the THRUUE report said, must double down on understanding (through culture measurement) the shifts in employees’ norms, values, beliefs, behaviors and assumptions. “Leadership teams must realize that their view of the current culture is rarely the same as that of managers and frontline employees (it’s often way more positive than that of employees),” the study concluded.

CEOs must also know that measuring employee engagement will not provide sufficient insights on addressing culture gaps. “A lot is on the line because talent exiting the firm costs far more than paying a salary,” said the study. “BlackRock’s CEO Larry Fink stated the business case very clearly when he said, ‘Turnover drives up expenses, drives down productivity, and erodes culture and corporate memory.’”

“For any strategy to be activated, it must have a high-performing and constructive culture,” said Mr. Forrester. “Therefore, we urge leaders to measure the right things (culture vs. engagement) to manage the desired culture of their employees.”

THRUUE is a consultancy advising CEOs, boards, and their leadership teams on the intersection of ideas, strategy, and culture. The firm’s mission is to close the gap between the aspiration expressed in its client’s mission, vision, and values and the execution implied ion culture. Founded in 2012, THRUUE serves clients in commercial and non-profit sectors from its Washington, D.C., headquarters office.

Related: Why Total Well-Being is the Biggest Culture Shift to Happen in Decades

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor  – Hunt Scanlon Media