Whitepaper: Transparency is increasing–and you can handle it with a strong culture

By Scott Young and Cathy Maraist 

Increasing transparency is a trend permeating and disrupting almost every aspect of society, with technology, cultural norms, and new laws and regulations all contributing. Smartphone video, social media, whistleblower sites such as Wikileaks and 24/7 news coverage make the actions of politicians, celebrities, police officers and even teenagers much more visible to the public.  

The trend is affecting corporations as well. The quality of a company’s products and services can be quantified on sites including Yelp, OpenTable and Amazon. Its worst moments of customer service, such as violently removing a passenger from an overbooked flight, are viewed millions of times on YouTube. Regulations and shareholders demand that they measure and report the environmental impact of their business and plans to reduce it. In addition, corporations are increasingly expected, by the public and their own employees, to make statements in response to world events and about social causes on which much disagreement exists. 

All eyes on you

As a consumer, it’s never been easier to use your purchasing power to influence corporate behavior, whether you want to purchase from companies that have progressive environmental impact programs, donate to educational causes, or tie CEO pay to organization performance. You can even use the BuyPartisan app to scan a product’s barcode and instantly see which political campaigns have been supported by the company’s CEO.  

This “operating in a fishbowl” feeling for companies extends to their treatment of employees. Just as consumers can find lists of companies known for supporting new mothers or having a diverse workforce, job applicants can use Glassdoor to read employees’ unvarnished opinions and survey ratings of prospective employers.  LinkedIn makes it easy to connect with current employees before interviewing or accepting a job offer. 

The good news is that these trends have provided greater benefits to those companies whose leaders’ and employees’ actions reflect their values. Thus, it’s never been more important for companies to have a very clear sense of identity, which forms the core of organizational culture. In order to thrive in the current business environment, companies must rely on culture to guide the behavior of employees and the decisions of leaders. 

The CultureIQ Culture Framework is uniquely suited to help companies do just that. 

What is Culture? 

Despite understanding the importance of having a strong culture, many organizations have difficulty understanding what culture means, or how to use it to drive business growth. 

CultureIQ defines culture as the set of behavioral norms and unwritten rules that shape the organizational environment and how individuals interact and get work done in that environment. Culture is often thought of as an organization’s personality, influencing how people react to adversity, conflict, change, failure and success.  

Culture is unique to your organization

There is not a universal “ideal culture” that every organization should attempt to create. The culture that is needed to drive innovation in a technology company may be very different than a culture that helps a hotel chain lead its industry in customer service. Indeed, culture is often cited as a reason for a failed merger, large-scale organizational change, or new strategy.  

This point was illustrated well in the quote frequently attributed to management author, professor and consultant Peter Drucker, “Culture eats strategy for breakfast.” This quote is often used to make the point that no matter how creative or brilliant a new strategy, it will ultimately fail if an organization’s culture is in conflict with it. Therefore, it’s important for any culture framework to take into account the particular strategic objectives an organization is pursuing.  

How Was the Culture Framework Created? 

The CultureIQ framework was built to help organizations define, assess and activate an organizational culture that is ideally suited to support their business objectives. These objectives can be based on what we call “planned strategies” – things companies strive to be as they grow, such as more diverse or innovative – and/or “emergent requirements” – external or unanticipated changes such as COVID-19, a sudden employee retention challenge, or the opportunistic acquisition of another company. 

Our customizable framework was developed by our experienced team of culture strategists after extensive qualitative and quantitative research. We reviewed decades of culture articles and studies related to culture measurement, the relationship between leadership and culture, and the links between culture and organizational performance. In addition, we studied highly related constructs such as organizational climate and personal/organization fit. We also examined less traditional culture research involving the relationship between culture and emotions and neuroscience. This ensured that we considered a broad array of culture dimensions or attributes.  

Culture Framework main
The 7 elements of our framework

Essential elements

CultureIQ’s research also greatly benefitted from our decades of collecting culture data through organizational surveys. Our framework development involved exploratory and confirmatory factor analyses based on 10 years of data, involving nearly 200 individual survey items and having a wide representation across diverse companies. The result is a framework that includes the foundational elements of culture that are essential to every organization. 

The Core of Culture 

Although the culture within each organization is as unique as a person’s fingerprint, we firmly believe that the central core starts with two critical components that underpin any successful culture.  First, a strong and effective culture is much more likely to form when employees are aligned around and inspired by a compelling, shared purpose. Purpose is more than a strategy, a goal, or even some mission statements. Doubling revenue in the next five years is not a purpose in our view. Achieving the highest customer satisfaction scores in the industry is not a purpose. Nor is becoming the largest financial services company in the world.  

A purpose conveys an organization’s commitment to making an important contribution to its customers’ lives and society as a whole. It might involve improving worldwide health, helping customers achieve their retirement dreams through financial planning and investing, or advancing educational achievement through innovative technology. Even companies whose products are not life-changing for their customers can have a compelling purpose, by focusing on what the organization does for its employees, how its products or the production of those products protects the environment, or how the organization gives time and financial assistance to important social and community causes.  

Inspiring employees to bring their best

A compelling purpose lets employees know that they exist as an organization for reasons that are more important than an industry ranking or a shareholder’s dividend check. This purpose serves as the north star for the organization and inspires employees to bring their best every day. 

The second part of the foundation of an organization’s culture involves its core beliefs about how people—employees and customers—should be treated and valued, which we refer to as dignity. This involves an organization’s commitment to diversity and inclusion, both in terms of recruiting, hiring, supporting, and promoting employees, as well as respectful treatment of customers and potential customers. 

Dignity also pertains to setting and upholding clear ethical standards for employee behavior, as well as management’s obligation to provide a safe and healthy environment for employees. Above all else, dignity conveys that each person has unique life circumstances, skills, and ideas that deserve to be valued and respected. Without dignity, an organization will struggle to build energy around the behaviors and decisions needed to support its objectives. 

“Flexing” to Fit Your Needs 

An organization that has a strong, stable core based on a compelling purpose and sense of dignity is well-positioned to develop the culture it needs to successfully execute its strategy. Then, depending on strategic goals, it can prioritize the next set of four aspects of culture, which focus on how employees organize their work and team up to serve customers, and how effective they are at improving the business by developing people and surfacing and implementing new ideas.  

Those that have superior collaboration create an environment in which sharing information, resources and ideas are highly valued, and where team accomplishments are celebrated and recognized more than individual achievement. Importantly, effective collaboration is facilitated by processes and technology, particularly between functions or business units. 

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This culture scenario may be one you need to deal with sudden changes

To what extent does an organization prioritize and hold employees accountable for accuracy and error-free work above speed or volume of sales? Is going the extra mile for a customer viewed as an investment in a long-term relationship or as the enemy of cost containment? Execution also involves decision-making. Are decisions pushed down to those employees most impacted by the decision and with the most information, or is decision-making part of a hierarchical, bureaucratic structure that focuses on approvals and layers of protection? 

Investing in talent

Some organizations approach their people as pieces on a chessboard – with each person hired for a very specific purpose or skill, without much regard for what skills they might develop or what skills will be needed in the future. Jobs are structured primarily based on efficiency or cost containment. Other organizations view their talent as a long-term source of competitive advantage and invest in their talent accordingly.  

They understand that an important path to success is to help employees develop and expand their skills so that those employees can contribute in new ways and so they are more likely to desire to reinvest their own skills in the success of the company that helped develop them. They also understand that designing jobs and work in ways that engage, challenge and develop employees will provide a greater return on investment than designing repetitive, specialized jobs that prioritize efficiency. 

Expanding thinking

Curiosity is a critical element of culture that involves a learning mindset – a willingness to invest time in experimentation and trial and error. Curious organizations understand that a willingness to accept and learn from failed ideas is part of growth and improvement, and that there is value in ideas that expand thinking. On the other hand, organizations with an exclusive focus on speed, output and efficiency stifle creativity and prevent breakthrough innovation that can propel them ahead in their industry.  

Collaboration, execution, talent and curiosity play an important role in any organization’s success but become critical for organizations pursuing certain strategic objectives. At CultureIQ, we have extensively researched many strategic objectives and the culture ingredients needed to achieve those objectives. For example, curiosity and collaboration are paramount for organizations attempting to differentiate in their industries through superior innovation, whereas execution plays a more prominent role in organizations focused on winning by achieving superior product quality. The framework and underlying assessment therefore “flexes” to provide the ideal match to a particular strategic objective. 

How Culture Powers Velocity 

The final element of the CultureIQ Culture Framework is essential because of the reality that an organization’s external environment and strategic objectives change. Highly disruptive societal, technological and economic changes have converged in a very short period of time, clearly showing that the need to adapt to a rapidly shifting competitive landscape has never been greater. Organizations that demonstrate the agility to thrive during times of change are those that will achieve long-term success. At its most basic level, this means being able to adapt to disruptions brought upon an organization from the external environment. This could be reacting to new government regulations, a new product introduced by a competitor, and of course, ever-increasing demands from customers for transparency. 

A more advanced level of agility involves sensing or anticipating those changes and preparing for them in advance. At peak level, agility involves proactively identifying and seizing opportunities to positivelydisruptthe future. 

Your Culture is Your Advantage 

The CultureIQ Culture Framework highlights essential ingredients in an organization’s culture, while providing each organization with the flexibility to make their culture unique. At CultureIQ, our purpose is “to ensure culture propels business growth rather than prevents It.” We believe that:  

  • A powerful, inspiring purpose is essential for success, but your organization’s purpose should be unique.  
  • An organization’s people are at the heart of whether crucial changes and business growth will be achieved.  
  • There are a set of unique cultural elements that flex based on an organization’s planned strategies or emergent business requirements. 
  • The agility of an organization will enable change, and drive faster change in the organization. 

Most important, we believe our framework provides a powerful and effective way to communicate the importance of your culture to your employees and leaders. We would love to partner with you to prove it. 

Scott Young is Culture IQ’s Managing Director, Culture Solutions, and Cathy Maraist is CultureIQ’s Head of Culture Solutions

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