‘How do you quantify the invisible?’

Today’s business leaders are well aware that culture is integral to an organization’s success. The difficulty is that the quantitative metrics to support growth and transformation are often missing, said Brett Richards, president of Connective Intelligence in Newmarket, Ont.

“Great cultures drive great financial performance,” he said, speaking at a recent SCNetwork event in Toronto. “We all intuitively know this to be true.”

But it’s the measurement of business intangibles to improve the bottom line that leaves leaders befuddled, said Richards.

“How do we actually measure tangible data (by) turning soft people and culture issues into these hard dynamics, hard metrics?” he said.

“How do we actually quantify these things? How do we evaluate and measure our training and organizational development (OD) efforts?”

For human resources professionals engaged in transformative efforts related to training, the links to business performance and key performance indicators (KPIs) are critical, said Richards.

“Some of the biggest needs that we’re finding in training and HR and OD are measurement, evaluation and business impact,” he said.

“It’s not just about quantifying the cultural transformation en masse within your organization, but it’s also measuring the activities that you’re doing year in, year out, that are designed and you’re investing in to support your organization’s success and evolution.”

Culture is an elusive intangible that companies struggle to quantify, said Richards.

“It’s really the motivational force that enables the ability of the organization to actually activate and achieve its business imperative, its vision, its mission and its strategic imperatives — these unspoken behaviours,” he said. “How do you quantify the invisible?”

Growth through disruption

Many organizations are working to create disruption to accelerate inner growth and respond to external environments, according to Richards.

Creating alignment between strategy and culture is an imperative for employers looking to thrive in today’s disruptive world, he said.

Accordingly, evaluation of an organization’s cultural environment is beneficial, but understanding how far that culture can shift may be more important, said Richards.

Similarly, measuring employee engagement doesn’t provide the whole story, he said.

“Employee engagement is good, but system activation and understanding how engagement synergizes with other factors essential for growth is important.”

“We have to understand that organizations are systems — not just a bunch of complicated processes,” said Richards.

“When you’re talking about supporting growth and transformation within an organization, understanding organizational mindset is also mission-critical.”

An organizational growth indicator (OGI) tool, for example, can help employers identify their readiness for change with an employer, he said.

The tool can identify eight different orientations — creative, strategic, innovative, learning, collaborative, connective, cultural and leadership — which influence an organization’s ability to grow.

“Having an understanding of the true readiness for change and transformation can be a very helpful piece of data. If our readiness is not high — if we push change too hard and too furiously on the organization — it could have the unintended consequence of driving less-effective results.”

Inconvenient truths

Employers are often held back from true innovation measures by a series of inconvenient truths, said Richards.

• Leaders need better ways to measure, quantify and demystify innovation so it can be tangibly addressed in a systematic way.

• Innovation is a leading indicator of an organization’s ability to sustain future success.

• Most organizations still view innovation as a nice-to-have, not a need-to-have, and they eventually pay the price.

• The goals of organizations and innovation are most often the same, and yet the two are experienced as enemies, not allies.

• Creativity is absolutely essential, but it’s not the whole story.

• The inability to break the bonds of short-term thinking by leaders will kill innovation.

• Organizations are most often adept at short-term incremental innovation, and are often less adept at radical or transformative forms.

• Failing to understand the full ramifications of the fact that organizations are complex systems, rather than a collection of complicated processes, will severely constrain an organization’s transformational capabilities.

• There is no innovation without leadership support.

• There’s a dramatic need to better understand the relationship between organizational thinking and innovation.

• Effective organizations are more likely to be successful with innovation, and yet it’s those ineffective organizations that typically need it most but suffer through failed efforts.

• Engagement surveys are useful, but not the whole story.

• Innovation and transformation are every bit as emotional as they are intellective.

Employers don’t pay enough attention to emotional dynamics that exist within organizations, he said.

“We pay far too little attention to the notion of innovation, and how emotion and affect plays a critical role to driving a successful innovation practice within organizations, and also how critical emotion is and affect is to driving culture and sustaining and shifting it in adaptive ways.”

Organizational environments can be broken down into three elements — climate, culture and mindset, said Richards.

“The internal environment influences the way we think, the way that we feel and, ultimately, the way we act.”

Mindsets matter

Mindset embodies the values, beliefs and thinking preferences that influence attention and organizational action, he said.

“It’s very, very important to driving success, particularly focusing on growth and transformation.”

Mindsets can also be broken down into three components: intellective, thinking/feeling and volitional — or the ability to choose, said Richards.

“A mindset represents more than how we think, it captures how we feel, and how we choose to act within the world.”

Four principles guiding mindsets are: imagine, or a focus on new ideas; resolve, a focus on solutions; analyze, a focus on proof; and align, a focus on values and integration, he said.

“Each of these four mindsets are equally relevant, equally necessary. However, organizations leverage these four mindsets in different ways. And, therefore, it has implications in terms of where their current state is and where they need to shift in order to be adaptive,” said Richards.

“Culture change and sustained success requires… attuning mindsets of leaders and contributors to the organization’s business strategy.”

“We have to think about where do we need to shift to and how do we attune the organization accordingly. And by attunement, I mean aligning the thoughts, the feelings and the intentional choices of organizational members to achieve intelligent action.”

Mindsets can’t simply be formulated and then hung on the wall, he said.

“It has to be built into the operational plan, in terms of the way people are actually living, moving and having their being in the organization. It has to be firmly embedded in the strategy and the operational plans, in the competencies in the performance management,” said Richards.

“In order for it to really see a sustained shift, you do need to embed it into the DNA. It’s not enough just to say this is our new strategy. You have to be very intentional with integrating it into the operations of the business, the processes, the systems, the cadence, the way in which people operate in their meetings.”