Why Measuring Culture Is Crucial for Making Progress!

There is that famous phrase stating that what gets measured gets done, attributed to Peter Drucker. Even though actually, Peter Drucker[*] did not say that, the expression is quite pertinent, particularly when beginning any kind of commercial endeavor. Which is why setting goals, key performance indicators, maintaining objectivity, and monitoring your progress are essential components of reality management and the road to success. The whole thing has to be MEASURABLE. The inclusion of culture in your strategy calculations necessitates its measurement.

Given that culture is so airy, nebulous, and ethereal, one could reasonably wonder whether it is even possible to quantify it. Yes, of course it can! However, there is a scathing test that the measurement must pass if it is to be relevant for use in commercial applications: Show me the money! Unfortunately, proving ROI won’t be a picnic if culture is seen as nothing more than an HR stunt or a fan club activity. To overcome this obstacle, you must have the right strategy, tools, and technique. Organizational culture transformation frameworks such as Hofstede Insights MultiFocus™ are one example.

In my opinion, a genuine application scenario is the best way to see the approach’s usefulness.

A TV and video ad sales business in Europe was one of our clients a few years ago. For the sake of this narrative, let’s refer to it as TVHouse. Completely unimportant. But with a straightforward goal in mind: to revolutionize their industry. A youthful executive team and a small team of maybe fifteen professionals are committed to realizing this vision by actively listening to their two customer groups—the corporate advertisers, who are anxious about the measurable impact of their decisions, and the television channels, which provide the actual setting in which the ads are sold—and adjusting their organization appropriately. They followed their clients’ lead and patiently tracked their progress towards the end goal using fully measurable metrics in both areas. They used the Customer Satisfaction Index, which evaluated all market competitors based on feedback from actual customers, and Hofstede Insights Multi-Focus™ Methodology, which allowed to scan, measure, and fine-tune the company’s culture. Annually, they would conduct scans and analyses to pinpoint problem areas by examining the company from the customer’s perspective and getting to the bottom of things by analyzing the company’s operations and the degree to which its practices aligned with its business strategy and expectations. With each passing year, they were able to implement a series of tangible improvements, tweak their processes, and see their market relevance and share grow steadily. It was inevitable that they would rise to the position of #1 among market-independent TV/video ad sales companies and #4 among all suppliers in the industry, including the three sales houses affiliated with the main TV channels. Joining the other regions’ marketplaces where they achieved success (by, say, capturing 55% of a market within 7 years and ranking among the top 4 players in every other market) is crucial.

Why did they decide to go with us using Hofstede Insights’ method? Only two things are required to effectively manage culture: first, the capacity to assess, plan, and implement the path leading to the anticipated financial results, which are based on the company’s long-term strategy. Upon one’s own direct strategic relationship.

And the second is to have a reliable system of measurements. Reliable? Indeed, the answer is yes, as it provides a solid grounding in scientific research and offers an exhaustive picture of the organizational environment through a database filled with actual data.

Clearly, it is conceivable to measure culture; the only remaining issue is how. Insights Multi-Focus Model™ from Hofstede: What Is It? According to the pioneering work of Professor Geert Hofstede, there are six different elements pertaining to organizational sociology that account for a significant portion of the variation among units or firms. Organizational culture’s six dimensions emerged from these six variables.

Independent of one another are the MFM™ dimensions. Why is it even relevant to bring up that autonomy now? Why? Because you want to be absolutely sure that the viewpoints (or dimensions, if you prefer) you use to develop the goal (future) profile of your culture—the one that guarantees strategic success—do not overlap or impact one another. Your meticulous preparations would have been for nothing under these circumstances.

Organizational EFFECTIVENESS (means vs. goal orientation) is the first dimension (D1). What is the idea behind the company’s value-generating process? This question goes right to the heart of the matter. People in a means-oriented society are more concerned with the „how” than the „what” when it comes to completing tasks. People in a goal-oriented culture find meaning in the „what”—the precise internal objectives or outcomes—and will go to great lengths to get them, regardless of the dangers involved.

Customer orientation is the focus of Dimension D2. In a culture heavily focused on internal factors, employees take their responsibility to the outside world for granted, believing they are the ultimate judges of consumer and global welfare, and that corporate ethics and honesty are of utmost importance. Results matter most in a highly externally driven culture, where a pragmatic rather than an ethical mindset is prevalent and satisfying the needs of customers (or stakeholders) is the sole concern.

We touch on the methods by which the organization maintains member discipline in our discussion of the third dimension (D3), the level of formal control. Internal structure, control, and formal discipline make up this dimension. There is a great deal of improvising and unexpectedness in a culture that is very laid-back, which gives insight into its underlying structure as being fluid, unpredictable, and lacking in control and discipline. On the other side, innovation and creativity flourish in such an atmosphere. Contrary to expectations, a highly regimented formal control system actually increases the level of job discipline. People are serious, on time, mindful of their budget, and focused on quality. By exhibiting seriousness, punctuality, budget consciousness, and a focus on quality, the organization’s behavior becomes more predictable.

The focus of interest, or the glue that holds the company’s functionally diverse elements together, is the subject of Dimension D4. Employees in a locally oriented organization identify with concrete people: their superiors and/or members of their department. On the other hand, an employee’s profession and the nature of their work define them in a company that places a premium on professionalism. Employees in a very local culture are extremely self-absorbed, have a narrow view of the world, and are subject to intense social pressure to fit in. In highly professionally focused cultures, members of these groups bind together through a shared commitment to learning as much as possible, building upon existing practices, and becoming experts in their respective fields.

How easily people can reach their company and be sufficiently informed is the topic of the fifth dimension, APPROACHABILITY (D5). One is welcoming to both insiders and outsiders in a culture that values openness, and it is considered that almost everyone might find a place in the group. It is also the question of providing help and assistance to others, both subordinates but also colleagues. It works the other way around in a very closed corporation.

D6: Management Philosophy focuses on the most important aspect of every organization: its management philosophy. When a company is really committed to its workers, they make sure to address their personal issues and prioritize their well-being, even if it means sacrificing some work. Individuals affected by the choices are actively involved in the decentralized decision-making processes. The temptation to get the job done, even if it means sacrificing workers’ well-being, is high in firms that place a premium on work. Furthermore, nobody cares about what they think, to put it simply.

Although each dimension operates independently, the interplay between them is crucial for many company concerns from an operational standpoint, particularly when it comes to harmonizing strategy and culture. Consider the company’s Focus of Interest (D4), which pertains to professionalism, and Effectiveness (D1), which pertains to a high enough goal orientation, if you want to establish a learning culture inside your corporation. Everything you do runs the danger of being in vain if there are any flaws. Alternately, you should examine the results and behavioral indices related to Effectiveness (D1) and Customer Orientation (D2) if you want to establish a results-driven company that effectively adapts to the demands and desires of consumers. We could discuss for hours the possibilities offered by the methodology, but the essential aspect is always: what the company’s strategy is, the intents and ambitions, and how well the entire internal ecosystem is geared towards serving that purpose. Guesswork in such a sensitive matter is hardly recommendable.

Gaining a grasp of such relationships and the impact they have on businesses is beneficial. You can see them, however, if you commit to using an appropriate measuring system rather than wasting time on pointless discussions. You can’t begin to deliberately control the situation until it happens. If you can quantify your progress, you will be able to achieve more.

[*] It was Lord Kelvin (19th-century British scientist) who stated that “if you can measure it, you can manage it.” But the origins date back to the 1500’s to the Austrian astronomer Rheticus in the 1500’s, the sole student of Nicolaus Copernicus!