Measuring organizational culture - a new frontier for AI and a new company, Culturelytics

AI and HR: Where we are now

HR analytics and data-driven decision making are being integrated into processes throughout an employee lifecycle: from streamlining labor-intensive recruitment and onboarding processes, to personalizing employee experience, to enhancing learning and development (L&D) processes and performance management programs. AI’s well-known ability to sift through large amounts of employee data and identify patterns and trends can improve talent management outcomes, reduce reliance on HR staff for routine tasks, and provide HR leaders with better strategic insights. To serve these needs, a fast-growing array of new AI-based tools and services are on offer to HR teams in every organization.

AI and Culture: Where we are going

So what does AI have to do with culture? I believe there are two aspects to this.

On the one hand, as HR leaders adopt AI-backed people practices, they must avoid a danger – that new, automated processes might unintentionally embed cultural biases that are unfair to employees or counterproductive for the organization.

But on the other hand, there’s another aspect of AI and culture that holds huge upside potential and is only beginning to be explored – that of using AI to help leaders better understand and manage the complexity of company culture, and build cultures that align to their vision for success.

Today, business leaders around the world recognize company culture as a core success factor, and source of risk. Culture – the beliefs and behaviors of people in your organization – determines your ability to execute and realize the potential of your strategy. A positive work culture aligned to the organization’s purpose can also be a key differentiator from the competition. If you don’t get it right, unaligned or toxic cultures can become a major source of business risk: lost talent, unhappy customers, sullied reputations.

Cultural mismatch is also a primary reason why mergers and acquisitions fail to realize return on investment (ROI) goals. In my own experience working with investors, I have seen countless deals fail due to cultural gaps between buyer and seller.

Recognizing culture’s role in making or breaking companies (and sometimes entire sectors), corporate culture is even starting to become a compliance issue. In the UK, since 2018, the boards of all UK-listed companies are now required to assess their company cultures and ensure that they are aligned to their stated purposes and strategies. And the UK audit community¹is now looking at ways to audit culture the way you audit anything else in a firm.

Yet, despite this growing understanding of the ‘hard’ business impact of culture, many leaders, including chief executive oficers (CEOs) and chief human resources officers (CHROs), are still struggling to understand and manage company culture.

It’s often said that culture is a challenge to manage because it’s ‘soft’. I think it’s more accurate to say that culture poses a challenge because of its high degree of complexity. The saying goes, You can’t manage what you don’t measure.² But how do you measure something as complex as culture with any confidence? This is where AI comes in. 

AI-backed culture intelligence

I founded Culturelytics in response to these developing trends. ³ With my experience in investment, people management and technology, I saw both a need and an opportunity to use advanced analytics to help leaders sort through the challenge of measuring and managing culture.

At Culturelytics, we are pioneering the use of AI to help leaders address their culture challenges. Using the latest behaviour science, we have created the world’s first data analytics platform designed specifically to analyze organizational culture and predict its financial impact on the bottom line.

Our in-depth AI-backed analysis goes beyond employee engagement surveys to give leaders more comprehensive, accurate and actionable insights on their company culture. AI tools, such as language and learning models and smoothing algorithms, enable us to more accurately interpret data on culture, forecast trends, and provide a dynamic, intuitive data interface for clients.

This allows C-Suite⁴ leaders to bring culture more squarely into strategic business planning, and creates a more robust and objective platform for culture transformation projects.

Some features of the platform:

• Culture metrics provides quantitative scores on overall cultural health and eight critical dimensions of company culture that can be tracked over time.
• Reputation forecasting predicts employee sentiment and competitive employer reputation which is essential to recruit and retain top talent and minimize costly turnover.
• Demographic analysis pinpoints culture risks for more targeted, cost-effective interventions.
• Culture risk estimates the impact of culture misalignment on productivity and ability to meet revenue targets.
• Mergers and Acquisitions (M&A) help buyers conduct ‘cultural due diligence’ before and after deals, to maximize ROI and sharpen investment strategies.

AI also allows us to make culture easy for our clients. Because our powerful algorithm does the hard work of making smart correlations from selected data, we can also keep our surveys extremely short, improving the employee survey experience.

In short, measuring and managing organizational culture is yet another budding but growing area in which AI can make a vital contribution to the future of people management.

END NOTES

1. What is an audit, and what do auditors do?, Websters blog.  See also The Institute of Chartered Accountants in England and Wales (ICAEW) blog titled How to audit culture
2. Peter Drucker “You can’t manage what you don’t measure.”
3. Culturelytics website states that Culturelytics measures organizational culture and its financial impact. The company seeks to combine the power of advanced algorithms with the latest behavioral science, to bring “granularity and business focus to managing organisational culture.” See also more details here.
4. C-Suite definition: see TechTarget article titled What is C-level (C-suite)?  “The C-Suite includes the senior executives and managers whose job titles start with "C," such as the chief executive officer (CEO), chief financial officer (CFO), chief information officer (CIO), chief technology officer (CTO), chief operating officer (COO), and so on…”  Reference more information here.

ABOUT THE AUTHOR

Yeshasvini Ramaswamy is the Founder of Culturelytics Pvt. Ltd. She is a cultural transformation and analytics expert with extensive experience leading projects for Fortune 100 companies in countries around the world. She has represented India among the emerging 25 women leaders in the Fortune Most Powerful Women Partnership program, and is now Co-Chair of the ASSOCHAM National Council on Quality and Productivity. She was a featured speaker at WCC’s AI Contracting Week in September, on a panel addressing AI and Cultural Intelligence: embracing global diversity.

Culturelytics Pvt. Ltd. is a data analytics company that has developed a culture analytics platform to provide leaders with data-based culture intelligence to drive business results.