Some thoughts on the measurement of culture within firms

A recent article in the FCA-hosted Insights newsletter considers whether and how firms’ culture can be measured, offering a potentially interesting insight into how the FCA could be looking at this important, if somewhat intangible, challenge.

It notes that culture can be ‘measured’ in terms of both quantitative and qualitative factors. The former approach is likely to capture more superficial metrics, while the latter seeks to home in on more systemic and strategic issues.

The article proposes a distinction between measuring and assessing. It highlights the ‘illusion of control’ that measurement can create. While there’s some merit in the well-worn adage that you can only manage what you can measure, the article suggests, measurements can sometimes get in the way of assessing culture in a deeper, more meaningful sense.

The article defines culture as ‘a combination of artefacts, values and basic (often unconscious) assumptions which cover all aspects of a group’s internal integration processes and external tasks, and the way these interact and constantly recombine.’

It takes issue with the concept of risk culture, arguing that this encourages too narrow a focus. Focussing on how an organisation manages safety or risks, the article argues, ‘is to attend to only one aspect of culture’. Some of the current tools used to survey and measure cultural factors within an organisation, it suggests, only encourage this failing.

By way of illustration, it takes the example of a firm rolling out anti-bullying training that focuses purely on stopping that specific issue, without first seeking to assess the cultural environment in which that behaviour manifested itself. An assessment based on interrogation, interpretation and understanding, it says, could help reveal and subsequently tackle the underlying cultural causes of the behaviour witnessed.

When it comes to culture, assessment is almost always preferable to measurement, the article concludes. Better to undertake qualitative assessments designed to fully understand and rectify underlying cultural issues, rather than provide training based on an incomplete or partial understanding of why it’s needed and whether it will be (or subsequently has been) effective in practice.

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