2019 will be remembered as the year of corporate culture. Beyond the banking sector, company leaders have begun to understand their messages don’t translate straight into a change in culture at the front line. So leaders are turning to new tools to measure and monitor corporate culture — including software that analyses how people relate to each other within organisations. Its creators claim it can measure important aspects of an organisation’s culture, and also help change how organisations work, increasing effective collaboration and boosting productivity.
Although such claims are far from proven, it is possible these tools may give some clue to the complex human dynamic of organisations.
Challenge of culture
Culture is hard to measure, let alone change. The University of Melbourne’s Paul Kofman has noted we do not know specifically how to make cultural interventions translate directly into good business outcomes. A previous generation of culture-monitoring software uses surveys, with limited success. On most measures, there remains a huge gap between what employees say in surveys and how they behave in practice. The banking Royal Commission pointed out how badly that gap was hampering conduct.
The new trend, embraced by startups and traditional human capital management (HCM) vendors alike, is analysing a company’s culture algorithmically, by analysing the connections between its people. Behind these tools is years of organisational theory from sociologists, behavioural scientists and computer scientists. University of Chicago Booth School of Business sociologist Ronald Burt developed the idea that while corporate culture starts with leadership, it spreads best through informal staff networks. At MIT’s Media Lab, Alex Pentland pioneered computational social science — social physics — developing algorithms to make artificial intelligence understand human society better. These ideas arrived as social media communication exploded and computer power became capable of processing all that information. Result: the new generation of culture software.
Race for leadership
New culture software products are emerging all over the world. Companies such as US giant IBM, Singapore’s Trustsphere and Rotterdam’s KeenCorp are using machine learning to analyse corporate language and behaviour. These software firms are pulling metrics out of email, collaboration and social media tools and “enterprise social networks”, including internal tools such as Jive, Microsoft’s Yammer and Salesforce’s Chatter, Facebook Workplace, internal wikis and social project management tools such as Basecamp and Trello. These metrics are also being used to analyse the content of forums specifically set up to promote discussions on an organisation’s issues.
Australian software vendors say local clients suddenly grew interested in their work as the banking Royal Commission revealed the gap between official corporate culture and front-line behaviour. Culture software is now in place at several large corporations. Westpac is using Australian-built Swoop Analytics. ANZ has been using C-Sight, from Australian-based Pax Republic.
Promise of truth
The promise of this new software is that it can expose the unattended-to realities of the modern shop floor. A survey “can tell you you’ve got a problem”, says Barbara Sharp GAICD, co-founder and CEO of Pax Republic. “But it can’t tell you why. This is the real challenge for directors. They need to find out why things are happening so they can intervene at the early stages and fix it up, so it doesn’t end up in a banking Royal Commission.”
C-Sight establishes company forums where employees can text-chat anonymously about issues the company wants to drill down on. That text is analysed and compiled into a report for management. “This is the stuff they need to know about — the whispers in corridors,” says Sharp. Pax co-founder and chief technical officer Tim Offor adds that the company has “digitised management by walking around”.
If you ask questions anonymously and at scale, says Sharp, “you can be confident that what you’re hearing is a collected truth” — a truth that leadership can act on.
“We call them culture carriers, because they spread culture like a virus in the organisation.” Harry Toukalas MAICD, Blackhall & Pearl
Fruits of engagement
Swoop Analytics pursues similar issues to Pax through the social media companies have already installed. Co-founder and chief scientist Laurence Lock Lee had worked on “knowledge management” and “expert systems” at BHP’s research labs, only to find experts stood out less for their raw expertise than for their connections to other people. That pushed him into “social network analysis”.
Swoop separates people by their social behaviour. Microsoft was its first customer, and Swoop is rolling out a version of its software for Microsoft’s Teams product. The company also offers versions for Facebook Workplace and Yammer.
Swoop’s next customers were Westpac and Telstra. Lock Lee says Telstra’s then CEO, David Thodey AO, was a natural “engager” who would start conversations and sustain them. Engagers drive social connections within organisations more powerfully than any other type of communicator, and Swoop analysis showed a substantial effect at Telstra. “When Thodey replied to one of your posts, you’d become 50 or 60 per cent more active,” says Lock Lee. “Leadership has a huge impact, by just engaging with people directly.”
Hope of change
For Australian companies, another option is Condor software from US company Galaxyadvisors, which advisory firm Blackhall & Pearl has implemented for a number of clients. Blackhall & Pearl group managing partner Harry Toukalas MAICD says Condor, like Skype, can examine social media streams. However, it also looks at email, invitations, Skype and Yammer logs, and even your physical proximity to other staff. Condor illustrates relationships in graphic form, with interactions charted as lines between individuals’ notes in various social networks.
Condor can take its own stab at measuring the state of a corporation’s culture. But Toukalas is more excited by the tool’s ability to change behaviour. He notes your personal culture is set largely by the people with who you regularly interact. Tools such as Condor can identify those people. “We call them culture carriers,” he says, “because they spread culture like a virus in the organisation.”
Without revealing his Condor client list, Toukalas says his firm has recently implemented Condor at a major Australian bank — “with dramatic, positive results”. “Using a tool such as this you’re able to shape and change behaviour up to eight times faster than typical approaches,” he says. “And the changing of that behaviour is much, much stickier, because you’re changing the social fabric in the organisation.”
Need for proof
There is some evidence for the new software’s claims. In a 2017 study led by MIT research scientist Peter Gloor, data was gathered by “virtual mirroring”, based on a Condor analysis of the email metadata from 176 teams at global professional services firm Genpact. The results showed that teams with direct communication, simple language, fast response times and consistent points of contact got higher net promoter scores from customers.
Cultural transformation remains more art than science, but we do know culture evolves when organisations establish processes to continuously move staff in the right direction. Which is why Macquarie University Business School professor and risk management expert Elizabeth Sheedy says Toukalas’ concept of a culture carrier “makes theoretical sense”.
Her biggest question is “whether the data analytics are sophisticated enough to accurately represent something ... to do what they claim?”
Of course, the danger with any new technology, she says, is that people “will make all kinds of claims that aren’t really adequately substantiated”. Peer-reviewed studies remain scarce and a swag of companies are trying to stake out a claim, but in the troubled field of culture change, culture software holds out the hope of progress.