Why measuring company culture matters—and how to do it

Company culture plays a fundamental role in shaping the values, beliefs, and norms employees are surrounded by and adopt—which, in turn, drives employee conduct and behavior. Due to this crucial relationship, as well as the relationship between culture and business performance, it is vital for leaders to not only understand their organization’s state of culture, but also to work towards creating a strong culture that aligns values with the overall strategic goals of the organization. Organizations that work intentionally to do so encourage behaviors that will ultimately lead to company success and reduce risk. In fact, LRN research shows that organizations with strong, values-based cultures outperform by 40% across a range of business metrics—including growth, innovation, and employee retention. And employees in these organizations are 1.4x more likely to report any misconduct they observe. Beyond these benefits, organizations that proactively assess their culture of compliance also adhere to expectations of the US Department of Justice (DOJ) regulatory guidelines.

So, how do you measure culture? At LRN, we have dedicated over 10 years to understanding and enhancing the measurement of company culture across a variety of dimensions. Our extensive experience has evolved into the development of a culture assessment which generates the actionable insights organizations need for culture initiatives and business performance to thrive.  

What is the Ethics & Compliance Culture Assessment?  

Culture is dynamic; therefore, organizations should strive to continuously assess, adapt, and improve culture to keep up with ever-changing business environments. We know from recent research that use of employee surveys, engagement with E&C resources, root cause analysis, and other metrics to assess compliance program effectiveness increased by one-third over the last year, highlighting the importance of continuous review and improvement.

When it comes to culture, you can’t manage what you don’t measure—and that’s where having a tool that can capture data and distill it into valuable insights comes in. LRN’s Ethics & Compliance Culture Assessment provides an actionable framework to understand and improve ethical culture. This 360-degree framework is designed to first assess an organization’s state of culture to effectively diagnose and measure it across key ethical dimensions.  

Ethical dimensions assessed to diagnose culture: 

  • Corporate Ethics  
  • Leadership Modeling  
  • E&C Program Impact  
  • Organizational Justice  
  • Trust  
  • Speaking Out  
  • Diversity, Equity, & Inclusion (DEI) 
  • Principled Performance  
  • Transparency  
  • Rewards and Recognition 

The 10 dimensions listed above along with misconduct and reporting, are quantified and measured to diagnose culture across 11 areas. The assessment is initially deployed to all employees to create a comprehensive baseline, generating a holistic view of ethical culture and the current impact of the organization’s E&C program. Short, frequent pulse checks then follow the assessment, enabling ongoing culture measurement and the ability to pivot more readily in response to changing dynamics.   

The 10 ethical dimensions are derived from rigorous research and validation techniques, proven to effectively measure the values, norms, and behaviors that influence and form ethical cultures. The dimensions are comprised of four to five Likert-scale questions that adequately represent each category. The assessment also measures the rate and type of observed misconduct, whether such observations were reported, and barriers to reporting. Finally, the assessment can include open response questions to gain additional insights into employees’ perception of culture or to solicit feedback on organizational initiatives. The quantitative and qualitative nature of this assessment promotes a holistic measurement, leading to an in-depth diagnosis and understanding of ethical culture.   

From compliance analytics to organizational action    

Upon completing the assessment, organizations can begin building an improved culture of ethics. LRN provides on-demand dashboards through its Catalyst Reveal platform, complemented by an executive report to easily digest the results and key insights. The dashboards deliver powerful data and analytics into the state of the organization’s culture through companywide scoring, demographic gap analysis, and industry comparisons from our robust benchmark dataset. Report analytics reveal patterns, trends, areas of strength, and opportunities for improvement which serve as the foundation for building action plans.   

When planning for next steps, it can be difficult to determine which aspects of your culture need the most attention. LRN’s advanced analytics uncover the areas of your culture that, if targeted as a priority for improvement, will have the greatest impact in advancing your ethical culture. Additionally, our expert advisory team analyzes and summarizes executive report findings to point your team in the right direction as you take steps to form action plans. The analytics and consultative partnership give you the confidence to dedicate resources towards forming and implementing action plans to drive positive change.   

Cultures do not change overnight, but progress gradually through continuous improvement efforts. Organizations need to be persistent as interventions work to reinforce employee behaviors that align to their strategic goals. These efforts require regular tracking and monitoring. LRN’s E&C Culture Assessment is dedicated to regular monitoring and adaptive, actionable strategies, with the goal of effectively creating positive change within your organization.   

The key takeaway  

It is never too late to start managing culture. A strong ethical culture is the cornerstone of any successful organization. At LRN, we are committed to helping build and maintain strong cultures, improve business performance and results, and propel organizations forward. With an industry leading, validated measure of ethical culture, we are here to support your ethics and compliance program goals. Using our robust analytics, reporting, and expert support, organizations have the knowledge and direction to transform insights into real action. Through a model of frequent measurement and improvement you will be prepared to overcome challenges and drive continuous change towards a strong culture of ethics. Learn more about LRN’s E&C Culture Assessment solution and how the tool helps businesses do and be better.