Does Your Corporation Need a Culture Audit?

When it comes to your workplace culture, you don’t know what you don’t know…

We know the importance of conducting independent investigations when an internal crisis arises in a business or organization. While some companies are focusing on revising their company culture in order to improve responses to internal crises, others are seeking an ounce of prevention for a pound of cure. For many businesses and organizations, this means going back to the root of their company culture and conducting a corporate culture audit.

What is corporate culture?

According to the MISTI Training Institute, a corporation’s culture is defined as, “the set of enduring and underlying assumptions and norms that determine how things are actually done in the organization.” This collection of shared beliefs, values, and visions should play a direct role in how the entity handles its day to day operations and shape their overall goals for the future of the company. However, it is not enough for a corporation or organization to have a corporate culture on paper, because the point of having a company culture established is that management and executives with decision-making power exemplify and lead by virtue of these beliefs. That’s why it’s prudent to conduct an internal culture audit in order to identify the core issues that lead to decline in production, revenue, and employee morale.

It’s not uncommon for businesses to encounter an internal crisis. Among the different types of internal crises, some of the most common are employee misconduct, fraud & theft, security vulnerabilities, and workplace safety. It’s also not uncommon for companies to operate under a “fire alarm” system, in which there are focused attempts to put out an internal “fire,” like a complaint of sexual harassment, or reports of theft. Human resource employees can spend so much time putting out fires that there’s no time to investigate the root of these problems and reform policy for smoother, healthier operations.

Typical culture audits

Culture audits can come in many forms and many levels of comprehension. Some assessment firms boast that they will personalize an assessment for their clients—unfortunately, a “personalized” audit can be problematic. If “personalized” is interpreted to mean that the client may specify which aspects of their organization’s culture they would like evaluated, it defeats the purpose of a cultural audit. Culture is not just one aspect of a company, but how all of those aspects harmonize for the good of the company. A typical culture audit includes, but is not limited to:

  • organizational mission, vision, and values
  • understanding of and extent of buy-in to mission, vision, and values
  • how values are symbolized
  • value differences between the organization and its competitors
  • identification of key measures of success
  • type of leadership required
  • the behaviors and attitudes of management and leadership
  • background of top managers, including schooling, time with the organization, job experiences, current duties and status, and career path policies, procedures, training requirements, and recognition systems that support or inhibit the ideal culture and behaviors
  • incidents and examples that illustrate what is really important to the organization
  • shared language or terminology
  • other strategic influences in the environment, such as competitive or allied organizations that may influence behavior
  • cultural heritage or history since founding
  • organization’s structure and its relation to culture and strategy
  • behaviors that reinforce core values
  • identification of subcultures and their roles.

Significance to companies

There are many types of internal crisis that can be prevented with a company culture audit, with two at the forefront of many Human Resource departments and executive leadership: Active shooter events and employee misconduct. Employee misconduct continues to become a higher priority for companies as more victims of employee sexual harassment are coming forward in the wake of the #MeToo movement. When a company’s management does not show initiative to improve operations surrounding these types of complaints, it can create a culture of silence within the workforce. The 2018 Global Business Ethics report stated that the reporting rate for “interpersonal misconduct” was around 30% for sexual harassment, surveying businesses that were actually registered with the researching body. With that level of sexual harassment going unreported within a company, how would leadership know if a pervasive problem exists within their company culture?

Between 2000 and 2017, nearly half of the active shooter events that took place were categorized as places of “commerce,” or business. A startling 60% of the active shooter events that took place in 2018 were also at places of business. In 10% of the cases examined from that FBI 2018 study indicated that the perpetrator exhibited warning signs of active shooter behavior prior to the event, following termination or disciplinary action.  Lower & Associates estimates businesses across the United States will lose more than $55 million in employee wages each year due to violence in the workplace. They experience direct losses in the form of medical expenses, workers’ compensation, litigation fees, and indirect losses such as breakdown in operations due to arrested productivity, record-low morale, and public relations nightmares.

The company culture audit is an ounce of prevention for a pound of cure. While many companies consider their culture well-established and well-practiced, the fact remains: You don’t know what you don’t know. That’s why investing in a quarterly or even biannual corporate cultural audit is so crucial for companies. Culture audits can save thousands in the future by identifying problems that would lead to litigation, low morale, and high rates of turnover within a company or organization. Rather than putting out fires on a day to day basis, why not fireproof instead?