Leading Through Challenging Times With a Culture Audit

Blog by Ayla Langer, SFive Contributing Writer

The value of a healthy workplace culture cannot be overstated. Not only have companies been shaken up with new COVID-19 health standards, but recent social justice issues also prompt an even further dissection of how companies set and maintain standards for diversity, inclusion, and adherence to ethics. If culture is like a company’s DNA, then all it takes is one mutation in the chain to cause substantial harm. Therefore, an audit should be considered as an effective tool to take a snapshot of the current company-wide culture. The audit process will provide organizations the tools to understand the current ecosystem and give clarity for actionable steps towards a more sustainable workplace culture.

What is a culture audit?

Our team at SFive recently came across MIS Training Institute’s (MISTI) publication on “The Why and How of Auditing Corporate Culture”, and found their framework incredibly important for understanding relevance in the current climate. According to MISTI, a culture audit breaks down the “set of enduring and underlying assumptions and norms that determine how things are actually done in an organization”. During an audit, a third-party objectively evaluates how the values, beliefs, and behavior of an organization manifest cultural precedents throughout senior managers, middle managers, and rank-and-file employees. Through assessing cultural congruence between communities, companies can diagnose symptoms of distress resulting from inefficient communications of values, ethics oversights, and lack of adherence to expected standards.

Is it possible to measure culture?

Unlike other forms of audit, cultural analysis is not as clear cut. Although culture can be difficult to identify and measure, what an audit can do is quantify what a company currently does to understand and shape its culture. Auditors analyze aspects like “tone at the top” and adherence to standards of conduct using methods such as focus groups, entity-level interviews, and company-wide anonymous surveys. Through these methods, organizations are able to gain insight into how different departments view overall management style, dedication to diversity and inclusion, and approach to decision making.

Auditors are then able to pinpoint precisely where pain points exist along the workflow chain and offer solutions for mitigation. For the student housing industry, for example, this method could reveal disconnections between on-site and headquarter perspectives, and offer strategies for how to bridge the gap between different departments and communities. Once inconsistencies are identified, auditors can determine whether a point of contention is behavioral or cultural and provide actionable solutions for strategic intervention towards healthier outcomes.

Why should an organization undergo an audit in this climate?

It’s an exciting time for discussing culture. More importantly, it’s a time to acknowledge the power of culture to affect organizational changes. In a Deloitte article titled “Care and Feeding of the Company’s Culture”, the US Managing partner of internal audit Sandy Pundmann smartly reflected that while companies “may attribute organizational failures to things like fraud, poor leadership decisions, and other such symptoms, culture is really at the crux.” As a result of COVID-19 and national attention on social injustices, it’s more important than ever to identify nuclear critical areas where cultural incongruence leads to negative outcomes. Ultimately, if the employees are happy with clear and transparent culture, they are more inclined to perform better and tackle whatever is coming next at work.

Many companies will want to check in on their culture as the result of current events, and as the student housing industry closes out Q2 and plans for Q3 and Q4, now is a perfect time to consider the benefits of an audit. It’s imperative to remember that the strength of a culture is built in the good times but revealed in the bad and although many businesses are focused on the bottom line, the stability of an organization is built on the health and longevity of its internal culture. An audit can help bring all of the voices, demographics, and perspectives to the table and bridge the gaps in understanding. Through treating culture audits like one would treat regular and preventative physical health checkups, organizations will be better prepared to weather challenging times with stronger reputations, more innovative teams, and happier employees.

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