Blog | 12.07.2015

Can People Analytics Help Managers Improve Company Culture?

Culture eats strategy for breakfast. – Peter Drucker

It is a globally accepted fact that company culture is extremely important for the success of any business, irrespective of its size. After all, culture is a set of shared beliefs, collective behavior, values and practices that binds an organization together. Company culture has a definite impact on company behavior and employee performance and eventually, the company’s bottom line. According to Wharton Management Professor, Larry Hrebiniak, company culture is “a dependent variable factor that is affected by external execution related elements”. Going by this it can be safe to say that organizational culture is a reflection of the prevailing management style.

Since companies are people driven, their culture too needs to make employee engagement a key parameter. According to a latest Deloitte research on Global Human Capital trends, HR professionals’ most important issue in 2015 is culture and engagement. It has been seen that organizations which promote a culture of engagement tend to perform better than the others, since employees are more invested in the organization.

A survey conducted in the year 2013 by Booz & Co., now Strategy&, reported that while 84% of employees thought culture was critical for business success, 60% rated culture more important than a business strategy and 57% thought that a major company culture overhaul was needed within their organization.

Since company culture is ingrained in the DNA of an organization, usually a significant event has to take place for the leadership team to consider changing it. While loss of sales, customer dissatisfaction and bankruptcy are some significant indicators that an organization might be in need of culture change, subtle indicators such as low employee engagement and contribution, higher attrition, crumbling morals and subsequent low productivity cannot really be ignored.

The fact however remains that employees across organizations are resistant to change. This mainly stems from the uncertainties that arise from it. Employees mostly resist change when they do not understand the reason behind it, are not included as a part of the change process, don’t have the systems that support change in place and have to deal with ‘change fatigue’ brought on with constantly shifting priorities. If organizations are able to address these employee concerns convincingly, then implementing these changes can become much easier. This is where people analytics can help immensely to ensure a smooth transition.

Technology empowers organizations in almost all aspects today and people analytics can help identify what exactly is not working within the organization and the reasons for the same. In fact, in larger organization, leaders, who play a crucial role in maintaining company culture, can use people analytics to identify team’s performance, employee engagement or lack of it, alignment of effort with business goals and historical data to help teams understand and accept the need for change in the company culture.

Managers can use data to drive change by providing measurable insights to win this difficult battle. The pertinent question then becomes, what should be measured and against what standard, because measuring the wrong things can be counterproductive and can prove to be a distraction. Using a data-driven toolkit that allows employees to use concrete data to gauge their effectiveness and value to the organizations helps in creating a transparent environment – one that is essential to convince them of validity of the change and the subsequent decisions.

It is true that culture is quite an elusive subject. So when leadership takes a data-driven approach, plans where it is going with company culture and implements the changes on the basis of measurable data, employees find it easy to accept. Change is hard, so it is wise not only to pick the battles worth fighting for but also selecting the right ammunition to win them.