Healthy cultures matter
Study after study confirms that companies with healthy cultures outperform those that don’t across a myriad of indicators, including revenue, margin, earnings per share, and retention.
Even critical factors like safety or reduction of medical mistakes improve when people feel they can grow, make an impact, and enjoy meaningful relationships at work.
A recent Gallup Study titled “The Relationship Between Engagement at Work and Organizational Outcomes,” published in May 2024, concluded that:
“Across companies, business/work units scoring in the top half on employee engagement more than double their odds of success compared with those in the bottom half. Those at the 99th percentile have nearly five times the success rate of those at the first percentile.
“The relationship between engagement and performance at the business/work unit level is substantial and highly generalizable across organizations.”
Median percent differences between top-quartile and bottom-quartile units were:
These results are undeniable. In addition, a healthy culture impacts another key metric: a company’s ability to change. To shift. To transform.
What is the Cultural Health Check?
The Cultural Health Check, or as LOCAL likes to call it, the “CHC,” is an org-wide diagnostic tool that provides a snapshot of a company’s well-being. It works by assessing critical factors known to contribute to healthy, high-performing cultures.
The CHC reveals cultural strengths and weaknesses, identifying change drivers or obstacles that typical employee engagement surveys may miss.
But most importantly, it tells you where you need to focus time and energy so your people and your company can effectively navigate change and grow together.
Why is it important?
“Companies with high-trust cultures outperform the market by a factor of 3.36 on average.”
Successful companies have something in common — a healthy response to change.
Trying to implement change without the right cultural environment is like trying to cultivate a vegetable garden in a drought.
The CHC is cultural due diligence — it helps us identify the right conditions for change to take root, because a healthy culture is fertile ground for business growth and performance.
Do I need a Cultural Health Check?
Before launching any new initiative, it’s important to ensure your employees are change-ready. While a unified vision, competent leadership, sufficient planning, and adequate resources are all important, it’s ultimately your people who make change stick.
The CHC can be deployed before an acquisition, or the launch of a new employee-facing technology or program. No reputable brand would ever go to market without understanding their consumer. It’s no different with your people.
Ready to get started? Let’s Talk. Need to hear more? Keep reading.
How does it work?
The CHC measures three attributes of healthy cultures across three categories — career, purpose, and community. All nine attributes help cultures thrive in times of change and uncertainty.
A quick and easy tool
The survey is intuitive and takes no more than five to ten minutes to complete.
Employees plot their experience of each of the nine attributes using Net Promoter Score (NPS) methodology across two axes — one for the individual’s perception of themselves and one for their perception of the company — scoring them each on a scale of 0-10 on a 10x10 grid.
The Trust example
In the example below, using the career attribute Trust, the respondent evaluates whether they feel they work for a company that generally trusts its people on the X axis and whether they feel they are a trusted member of the team on the Y axis.
Reading the results
Results are then aggregated by team, department, and organization as a heat map for each of the nine attributes, indicating where employees’ feelings and perceptions are concentrated.
TRUST
The green zone in the upper-right corner of the grid represents those with positive experiences (scoring 8-10 in both dimensions). The yellow zone (5-7) represents acceptable experiences, and red (0-4) represents experiences that need focused attention.
When 80% or more of your employees’ responses fall in the green zone, that attribute is considered healthy.
When 20% or more responses fall in the red zone, that attribute is considered unhealthy.
While there are no immediate fixes for cultural health, the CHC gives us a clearer picture of what’s working, what isn’t, and where to put more care and energy so experiences can improve over time.
Case Study: LOCAL
LOCAL uses the CHC to measure our own culture and report findings to the entire company in our quarterly business reviews.
The CHC helped us to identify that Impact was a soft spot in our cultural health. Employees intuitively knew they were helping a client transform, but it wasn’t always measurable beyond qualitative testimonials or the relationship continuing into future work.
As a result of this insight, our team began researching, concepting, prototyping, and implementing new, more robust tools and routines to intentionally measure the impact of our client’s success. This includes frequent NPS scoring, client surveys, and advising our clients to gather internal performance data.
Not only has this helped LOCAL increase value to our clients, it’s helped us engage our people more closely by providing transparency and tangible action, based on their feedback. It’s one of the reasons we are regularly awarded a Best Place to Work.
[CALL-OUT BOX] “It’s rare to have people seek to understand who you are with such tenacity. To create ideas and concepts that are being integrated into the very essence of our vision. Their experience and expertise have challenged our thinking and unknown assumptions, spurring us on to be a far better global organization. Our relationship has moved well beyond client-company to really seeking to accomplish something remarkable together.”
— Chief Growth Officer, Non-Profit
Measure, and then measure again
The CHC is meant to be taken on a quarterly basis to identify chronic challenges, seasonal shifts, and positive trends.
Observing the data over time not only gives you better insight into how your people really feel but also how to time a new initiative so it’s more likely to be adopted.
There is no perfect
You don’t need nine green boxes for change to work. Even the healthiest company cultures are unlikely to see nine green boxes.
Perfectionism isn’t recommended. Awareness is. Listening to your employees and taking meaningful action to improve their experience goes a long way toward building a change-ready culture.
Impact of the CHC
Insight work like this is the foundation for understanding how different internal audiences think and feel. It equips changemakers to create the right conditions for transformation to take root and thrive.
Your culture’s strengths become key themes in the story you tell about your change. If your culture emphasizes measurement, your story should lead with rational data. If your culture is more anchored in relationships, your story should emphasize how the change will reinforce a sense of community.
The more employees feel heard, valued, and supported throughout a change, the more accepted, successful, and long-lasting the change will be.
If you’re asking yourself any of these questions, it’s time for the CHC:
Ready to get started?
If you’re unsure where to begin, LOCAL is here to help. We can customize a strategy that works for your unique change and company culture.
If you’d like to learn more about the Cultural Health Check, Let’s Talk.