The just published Culture 500 study by MIT Sloan Management Review and Glassdoor analyze 500 of America’s largest companies and provide results on corporate culture. The study names 21 companies as “champions of culture”, recognizing them for their cultural excellence.
Some of the most famous companies with a trillion dollar market cap are not doing well in the study. Google is identified as one of the least agile companies in America. Microsoft is not doing well on collaboration, or Apple on customer orientation. It might come as no surprise that Verizon does not do well when it comes to execution, but it is striking that Apple and Google “fall short of making the top 70 for innovation.” Given the turbulent history of corporate culture studies, further consideration of the study methodology is warranted.
The Culture 500 methodology
The Culture 500 was created by Donald Sull, senior lecturer at MIT Sloan School of Management and co-founder of CultureX; and Charles Sull, co-founder of CultureX.
While Glassdoor is a treasure trove of employee submissions on what’s going on in big business, it has been difficult to access its wealth. MIT Sloan Management Review and Glassdoor deserve our kudos for their collaboration, collecting the data, and providing a research tool to access it. The tool is accessible here.
Culture 500 interactive online tool uses artificial intelligence to analyze 1.4 million Glassdoor reviews for 500 of America’s most powerful companies and ranks companies in what it calls the ‘Big 9’ : collaboration, integrity, agility, diversity, customer focus, execution, innovation, performance and respect.
When I spoke with Charles Sull this week, he explained to me that MIT Sloan Management Review has partnered with Glassdoor. CultureX has developed technology to accurately analyze hundreds of different cultural topics on a large scale. It took about three years before the launch of the first Culture 500. It was an intensive process, which involved overseeing and refining the accuracy of tens of thousands of different terms with cultural significance. This is now the second iteration of the Culture 500.
While people often think that Glassdoor reviews are all negatively biased by disgruntled employees, Sull told me that over half of the reviews are four and five star reviews (51%) and only 10% are unhappy reviews. star. People speak frankly on the platform, which has the advantage of being directly comparable because everyone speaks on the same platform.
A Glassdoor review involves ratings on a scale of one to five on issues such as the whole company, its culture, and its CEO. But what researchers are really interested in are free text submissions. People are basically asked: what is working well in this business? What is not working so well about this business? So what’s your advice to management? Free-text submissions are the richest source of cultural information and that’s what the technology platform is designed to measure.
The ideas for Culture 500 come from analyzing free-text comments. Hundreds of different types of cultural subjects are measured. But for the purposes of Culture 500, there are nine different values: Agility, Collaboration, Customer Focus, Diversity and Inclusion, Integrity, Innovation, Performance, Execution and Respect. And so, whenever someone mentions one of these different cultural topics, which they do in various ways, the study picks it up and notes whether it talks about it in a positive or negative way. Next, the study compares the ratio of positive to negative in how people talk about these values as well as how often they talk about them.
The promise and disappointment of cultural studies
Culture studies first gained prominence in the 1980s at a time when Japanese companies were suspected to be doing well because of their strong corporate culture. It was hoped that corporate culture could be a sort of Rosetta Stone that could reveal the secret to an organization’s performance. If we knew the values and standards of a company, we would have a hidden key to the future.
The usefulness of providing such a Rosetta Stone depended on the ability to reliably identify and measure norms and values and show a correlation or causal relationship with the performance variables.
The however, the results of hundreds of studies on corporate culture have been disappointing. This resulted in a lack of unity and precision in the definition and measurement of culture. This ambiguity has limited progress both in developing a coherent theory of organizational culture and in drawing repeatable and valid conclusions.
A mix of culture and performance
The Culture 500 study, Charles Sull told me, follows Professor Charles O’Reilly and Professor Jennifer Chatman in defining culture as a set of widely shared norms and values that are strongly anchored throughout the world. ‘organization. These values express what is important to employees.
What is unusual about the Culture 500 study is that, of the nine variables chosen, only three are unambiguous norms and values: collaboration, integrity and respect.
A fourth variable, diversity, could be seen as a mixture of performance and value to which companies aspire. It is supported by a series of standards, for example “providing safe spaces for discussions on inclusion”.
The other five variables appear to be themselves performance variables: agility, customer focus, execution, innovation and performance. On these variables, the study summarizes what employees wrote about them. Researchers believe that these performance variables are also ambitious values with an associated set of standards.
However, it is not clear that employees always have the best information or the best judgment on performance matters. In fact, customers are also able to tell us about customer focus, innovation and execution, sometimes more accurately than employees. Financial information and accounts also inform performance and execution. (Researchers view these performance variables as ambitious cultural values.)
In a large company, employees necessarily have the big picture of the world. They can see very clearly what is going on in their small part of the business and they know when they are being treated well or badly. On these questions, they have a privileged vision.
But they don’t always have a broader perspective on how customers are treated or what’s going on overall performance or execution. A random selection of written conversations from employees on these issues may or may not matter. It is not always obvious that the use of artificial intelligence to synthesize and prioritize comments elevates them to something other than comments from employees whose relevance and validity remain to be established.
Researchers, meanwhile, believe employees understand these performance issues better than anyone else. They believe that the bird’s-eye views of several worms can add up to a bird’s-eye view. In some cases, it is the employees who treat customers well or badly. They consider that the study examines how a company rewards results through compensation, informal recognition and promotions, and whether it effectively treats underperforming employees.
Corporate culture versus subcultures
Academic authors, such as Schein (1992) and Deal and Kennedy (2000), have argued that organizations often have very different subcultures. While a business may have its own “unique culture”, in large organizations there are often coexisting or conflicting subcultures, as each subculture is linked to a different management team.
The differences between different parts of the business can be even more striking. At Amazon, for example, management practices in high-end software development mind work (around 15% of the business) appear to be the opposite of what happens in Amazon fulfillment centers where the work is mainly manual and tightly controlled. In such cases, one has to question the meaning of a composite term such as “Amazonian culture”.
Future development of culture 500
If the Culture500 study is to be more useful in the future, it could evolve in the following direction:
· It could distinguish more clearly between culture and performance variables.
· He could more clearly recognize the differences between subcultures in a company, at least where there are glaring differences.
· It could more explicitly recognize both the inherent strengths and limitations of employee perspectives on performance variables.
He could recognize more clearly that a company is a complex adaptive ecosystem of managers, talents, customers, suppliers, shareholders and society, in which employee feedback is a source of information but not the only one key to understanding the corporate culture or organization. (This is a topic researchers are already working on.)
This could give greater recognition to the idea that a business ecosystem is more than a set of unconnected values and standards, and is a highly integrated set of arrangements that can only be fully understood as a system.
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