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Monitor Culture Like A KPI: Three Indicators Your Culture Is Secretly Sick

If the first half of 2017 has made anything clear about the future of the tech industry, it’s that ethics and culture are more important than ever. Headlines about Uber, Google and, more recently, SoFi, are just three examples of what happens when they fall out of alignment. At the same time, tech has led the charge to the rise of “company culture” as a differentiator. In the tech world, more than any other industry, companies are judged on employee experience, inspiring office spaces and work-life balance.

It makes sense. A strong culture can translate into increased productivity, employee retention, recruitment efforts and other positives. That culture must be based on shared ethics and values at its core if it’s going to stay healthy. But unlike revenues or talent acquisition, an “ethical culture” isn’t easy to measure. Are employees expressing concerns, asking questions and speaking up when they see questionable behavior?

It’s easy to assume if you’ve got a great day-to-day, in-office culture, two-way communication will just fall into place. But the truth is, it takes consistent work and it’s surprisingly easy to miss warning signs.

My company makes software that helps hundreds of companies implement and maintain stronger ethics, compliance and (the murkiest of them all) values, giving me an inside look at the issue. I know that there’s no magic bullet, but if you push yourself to think about ethics and culture the same way you monitor sales trends or development cycles, you’ll start to identify indicators. Paying attention to these can help you sense whether employees are truly communicating or if your company is an echo chamber. 

Indicator No. 1: Reports of bad behavior decline.

Reporting volume has dropped. Wonderful! No one’s reporting bad behavior or concerns so nothing bad is happening … right? Not necessarily.

Sure, it could mean new training is working and things are peachy. But it likely means something else is stopping people from speaking up. Remember Bill O’Reilly’s defense of his sexual harassment accusations? “No one has ever filed a complaint about me with [HR], even on the anonymous hotline.” That so-called “hotline defense” doesn’t hold up — zero reports does not equate to zero problems.

More often than not, fear of retribution or simple unawareness of how to speak upholds people back. Investigate an internal barrier first. From there, look outside. External factors are often overlooked and can have a huge impact.

One company I work with noticed a significant dip in employee engagement in Spain. After careful analysis, they found the external factor of soaring unemployment rates had increased fear of retaliation. It makes sense. Why risk rocking the boat when you’re the only person employed in your family? Once leadership knew the cause, they were able to launch an internal campaign to allay fears and heal communication.

A study my firm conducted in partnership with Ethisphere found that the average rate of reporting within a calendar is 2-3% of employees, whether those reports come in through a company’s anonymous whistleblower hotline, website forms or via in-person conversations. (So, if you have 1,000 employees, expect 20-30 total reports a year.) Figure out what your “normal” is and watch for fluctuation. Any significant variation is cause for careful questioning.

Indicator No. 2: Everyone’s anonymous.

A 2016 Harvard Business Review article identified the two biggest barriers to a healthy “speak up culture” as fear of consequences and a sense of futility. Self-preservation is common sense. That’s why having the option to remain anonymous is a necessary component of hotlines, helplines and even apps like Blind used by companies like Google, Amazon and Twitter to encourage honest conversation about workplace issues.

However, keep a close eye on the ratio of anonymous-to-named reports. An overabundance of anonymity — or a growing proportion of anonymous reports — is a sign something’s wrong with employee trust. On the flip side, a higher rate of named reports means that employees trust leadership enough to put their name on a report or even speak face-to-face.

Gaining that trust doesn’t happen overnight. It takes communication from leadership that speaking up isn’t encouraged, it’s expected. And make sure you’re actually listening when people do speak. Respond quickly and appropriately. It’s an uphill battle to overcome that instinct for self-preservation, but it’s possible. 

Indicator No. 3: Every ethics conversation happens in a conference room.

If conversations only happen in a formal setting — company offsite, training, performance review — ethics and values are going to seem like sterile corporate policy and not a dynamic, accessible dialogue.

No matter how overused this phrase is, ethics do “come from the top.” I learned this the hard way. A few months ago, we were stuck in a bad cycle of urging our development team to push code faster, which (surprise) led to a few quality issues. We needed to shift the focus back to quality, but it had to come from me. Now, during the lead-up to any release, I approach the product team lead each morning and ask, “Are you still comfortable with the release?” I do this in earshot of the entire team. It’s a small thing, but everyday actions show that you take values as seriously as you expect the team to.

We’ve seen this across tech in big and little ways, though not nearly enough. Whether it was Marc Benioff back in 2015 taking a very public stand against an anti-gay law in Indiana and canceling company events in the state or hundreds of tech executives recently signing an open letter in support of DACA, executives must practice the values they preach.

The final takeaway is this: it takes time. Start now. It’s hard work to maintain a two-way line of communication with employees and harder still to turn that into an ethical culture rooted in values. But it’s worth it. This year has shown just how much ethics and values matter for long-term success. Tech is building our future, but innovation isn’t the only path to long-term success. The companies that survive will be the ones that listen to their employees and strive to do the right thing.

By Patrick Quinlan

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