In our new article in The Economist, Donald Sull and Charlie Sull argue that AI will transform leaders' ability to understand and improve corporate culture. Our key points: 1) Culture matters: Nearly 80% of CEOs and CFOs list corporate culture among the top five factors driving financial performance. Organizations with a healthy corporate culture can attract, retain, and engage the best employees. A study by Alex Edmans of the best places to work in the U.S. found that their returns to shareholders outperform peers by 24% over a five year period. 2) Culture is not where it needs to be: In the U.S., the average employer rates a 3.6 out of 5 on Glassdoor. Most people wouldn't relish a meal in a restaurant or a ride with an Uber driver with a similar rating. How excited do you think they are to work in an average culture? 3) Current tools to measure culture are ineffective: Organizations cannot improve culture unless they can measure it. Employee engagement surveys excel at assessing whether an employee is engaged, but fall short in measuring all the dimensions of culture. Faced with dozens of multiple choice questions, employees zone out and provide the same or similar answers to very different questions. Their numerical scores provide little context or guidance on how to improve. And of course they cannot discuss topics that are not included in the survey. 4) Free text is a goldmine of cultural insights: When employees answer open-ended questions they discuss what matters most to them, provide context on their concerns, and often suggest concrete recommendations for improvement. The sheer volume of employee feedback available to leaders is staggering. For a large organization, the free text from internal surveys, online reviews, 360 performance reviews, exit interviews, and other sources can equate to dozens of novel-length "books" brimming with granular insights from what employees have to say in their own words. 5) AI revolutionizes our ability to analyze free text: In the past, companies resorted to crude tools like word clouds or key-word search to analyze employee feedback. Now, large language models can reliably make sense of free text at scale. Our CultureX platform, for example, classifies employee feedback into hundreds of granular elements of culture. Armed with these measures, leaders can assess how well their organization lives its core values, identify toxic sub-cultures, smooth cultural integration in M&A, and identify what drives critical outcomes like employee engagement or innovation. #corporateculture #ai #culture https://lnkd.in/gUYPCXEQ
CultureX
Software Development
Cambridge, Massachusetts 3,865 followers
Using AI from MIT to Improve Culture
About us
Using AI to measure and improve organizational cultures is significantly more effective than the industry standard, which is nearly a century old yet still used by most. What industry standard? Long, clunky, 1-to-5-point scale employee surveys. The biggest barrier to strong culture, besides leadership buy-in, is a lack of understanding about what a company’s culture actually is and the best ways to improve it. As AI replaces the old employee listening methodology—providing step-change better answers to these questions-- we can expect to see much stronger cultures that create more value for everyone. Most organizations use long, close-ended surveys to manage their culture and most cultures are not very strong. That is not a coincidence. The average culture rating on Glassdoor is 3.5 stars. (Would you ever get in an Uber rated 3.5 stars?) With AI management, we can significantly improve that score. CultureX’s first SaaS product, Voice, immediately won the HR Executive Top HR Product award. Our research series, Measuring Culture, is the most-read series in MIT Sloan Management Review history, read by millions of professionals. Our research is regularly featured by leading media, like TIME and The Economist. We serve many leading clients, such as Amazon and HSBC. We can help you, too. If you would like to build a culture that measurably supports strategy execution, maximizes employee satisfaction at low cost, or accomplishes another objective, please reach out to us. We provide data-driven, intellectually rigorous insights from MIT grounded in the domain’s most innovative yet responsible technology. Our approach is rooted in sympathy for employees but also leadership teams, a determination to discover the real truth about how everybody feels, and the responsibility to translate insights into concrete action and enact measurable change.
- Website
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www.culturex.com
External link for CultureX
- Industry
- Software Development
- Company size
- 2-10 employees
- Headquarters
- Cambridge, Massachusetts
- Type
- Privately Held
- Founded
- 2020
- Specialties
- artificial intelligence and corporate culture
Locations
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Primary
1 Broadway
Cambridge, Massachusetts, US
Employees at CultureX
Updates
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CultureX reposted this
We spend more than 40% of our waking hours embedded in the culture of our employer. Even when we clock off, our work shapes our identity and sticks with us. What are we doing? Why are so many cultures so toxic? Why have we created these misery machines to live in? This is the lion’s share of our life we are talking about. Why are most cultures mediocre or worse? Why is the average culture rating a pathetic 3.5 stars out of 5, according to millions of people? In 2024 this is not getting better. It is getting worse. Can’t we do better than this? What about NVIDIA? What about Hermès? What about the LEGO group? What about Ferrari? What about Bain and Company? There is ample evidence that you can have a great, vibrant culture and make bucketloads of cash too. Or, to reframe that, you can make bucketloads of cash largely because you have such a great culture. Still, too many companies are drab and grey. “Fitter, happier, more productive” goes the Radiohead song, a fitting soundtrack to the majority of sullen workplaces which struggle both to energize employees and create impressive financial returns. There is another way. We have made great strides in the study and practice of corporate culture in recent years. Just as advances in telescopes enabled a much better understanding of our galaxy, so recent advances in AI enable a revolution in understanding corporate culture. For the first time, culture is quantifiable and concrete at scale. And it is malleable. By better understanding culture, we are now able to harness its promise and shape it to desired objectives, be they strategic or designed to create more humanistic workplaces. We have the technology. All we need is the will. For too many leaders, culture is dismissible, ethereal fluff that adds no real economic value to firms and, in any case, cannot be properly managed one way or the other. Where are the business school courses about creating strong cultures? Few and far between. Too many leaders were not taught to care, they were not taught to understand, and as a result they do not understand or care about culture. Let’s change that. Culture matters. Better culture will make the world richer financially and humanistically. We have the capacity to do much better, and we really ought to.
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CultureX reposted this
Want to build trust in leadership? Here are the 7 topics that, when employees say they trust leadership, they are most likely to also speak about positively, based on correlation analysis of a sample of 3.6 million recent Glassdoor reviews from 2356 of the largest employers in the United States. 1. Strategic clarity: clearly articulate your strategy and make sure employees understand their place in it to gain their trust. 2. Honesty: If you want to be trusted, practice honest, straightforward leadership. Do not go back on your word, and always tell the truth. 3. Frequent communication: Communicate frequently to build trust. Keep employees in the loop. 4. Transparency: Proactively share relevant information with employees to gain their trust. Do not be a closed book. 5. In touch leadership: Walk around the office, be visible, be accessible. Don’t spend all day in an ivory tower. This makes it much easier to trust you. 6. Job security: The most critical issue for trust is job security. If employees feel secure in their jobs, it is much easier to establish a bedrock of trust. To the extent that it is possible, make employees feel secure in their job and sure of their worth. If it is not possible, be as honest and transparent as you can be about the situation to salvage trust, keeping them in the loop. 7. Psychological safety: Creating a psychological safe environment that fosters a candid flow of ideas allows trust to flourish (trust is also a prerequisite for such an environment-- as with other topics on this list, the causality may go both ways). Read Amy Edmondson for tips on how to cultivate. (All results industry-adjusted. Rs of 0.63, 0.60, 0.54, 0.51, 0.51, 0.51, and 0.44, respectively. P-values all below 0.001)
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CultureX reposted this
Peter Drucker famously (never actually) said that culture eats strategy for breakfast. More consistent with what he actually wrote, I think, is the idea that a company’s destiny rests in the hands of both. Culture can eat strategy for breakfast, but strategy can give culture food poisoning later that afternoon. A company can have a fantastic culture, but if the strategy is flawed the organization can still tread water, rudderless, missing out on countless opportunities to create value. Strategy and culture are two triggers a company needs to pull simultaneously to successfully maximize financial value creation. Get just one right, you will likely fail. Strategy is what you need to do, and culture is a large part of what needs to go right for that to happen. These ideas are more than fifty years old (although you would not know that from the way many companies operate. It is common to have no strategy and a bad culture!). What is new? Effective cultural measurement. When Peter Drucker and Edgar Schein, who later picked up the mantle of culture, wrote, culture was still an enigma, albeit a tremendously powerful one. I have a lot of favorite Edgar Schein quotes, but the one that hits closest to home in my own world is a little more prosaic: “Organizational culture is difficult to study”. He announced that in 1984, and little changed in the next 40 years. How do you measure culture? With ethnographies? A very artful way of doing it, but expensive, time consuming, and difficult to scale. With focus groups? You only capture a small slice of the employee population, and how do you synthesize findings into structured data? With point-scale surveys? Employees do not pay attention to them, and they result in crude, low-quality cultural data. AI is the biggest breakthrough in cultural measurement since 1932, when Rensis Likert developed point-scale surveys. Now leaders can reliably capture culture in something approaching its true complexity and richness. This is a revolution. While the strategy-culture framework Drucker proposed has not changed, leadership’s ability to effectively manage this dynamic just improved dramatically. Culture is now measurable and manageable, and it is much easier to shape to the requirements of strategy. Thanks to AI, we now live in a more enlightened world where culture does not have to eat strategy for any meal. Instead, we can ensure culture supports strategy. When strategy and culture pull in the same direction, tremendous value creation is possible. https://lnkd.in/eTvYqZHp
Strategic Culture | CultureX
culturex.com
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CultureX reposted this
Everyone knows toxic culture is bad, but do you know how bad, and what its scale is? Here is how bad toxic culture is: it increases the chance of major disease—heart attack, cancer—by more than 40% according to research from Stanford. It affects you not on a professional level, but attacks your core personhood, violating your basic sense of right and wrong in the same way it might impact you if you were mugged. You spend the lion’s share of your waking hours in a place that causes you suffering. It can ruin your life. Here’s the scale of toxic culture: In 11 large employers alone, more than 1 million employees likely suffer from toxic culture. By itself, Walmart has more than 250,000 sufferers. Extrapolating this number in the most conservative way you can, that means about 350 million employees globally suffer from toxic culture. Given its severity and scale, toxic culture is a social issue. It is surprising that the media and public health leaders almost never mention it when it causes misery for so many millions. By the way, I don’t mean to name and shame these employers. With the exception of the USPS—which does have some serious problems—they are not unusually toxic. They are just very large. The problem is more that the baseline level of toxicity in our society—about 10%-- is so high that it will inevitably mean countless millions of employees are bound to suffer from it. Your company may have a similar level of toxicity to these companies shown. Culture matters. Let’s improve it. Toxic culture matters. Let’s end it.
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CultureX reposted this
According to this about 5% of employees are burnt out this year. That is about 8 million people in the United States. Pretty big social problem. (For reference, that is only about half as many as suffer from a toxic culture. Not that it’s a competition) At least our pilots and truck drivers aren’t too burnt out…
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CultureX reposted this
Have you read your company’s culture book? When thousands of your employees reflect on their experience online, what do they say is working well, and what do they say is not working well? Do you know what they would say? Have you ever listened to the reflective, considered words of thousands of your employees providing their heartfelt referendum on the company? Most companies have not, at least not systematically with good technology. According to your culture book, are you high integrity? Are you agile? Are you supportive? Do you pay enough? Are you a psychologically safe environment? Are you collaborative? And how are you doing compared to your peers and competitors? And how has your culture changed over time? Is it getting better or worse? In which ways? And what are the most powerful drivers of your employee satisfaction? And, once you have identified what you want to improve, how do you actually improve? What do your employees say about these challenges and how to fix them? If every company read their culture book, the world would be a better place. Unfortunately, few do. A few reasons why not… Culture AI is still in its infancy, so it is technically challenging to glean cultural insight from all that free text. But even if you could effectively analyze the free text data (in 2024, you can), most companies don’t read their culture books. Ironically, the companies that need to read their culture books the most are the ones who are least likely to. These companies get low scores on Glassdoor and, as a result, they dismiss Glassdoor. This can’t be right if it is critical about me! They say things like Glassdoor is negatively biased (actually, employees are more than 3x as likely to write a positive review on Glassdoor than a negative one—they’re just negative about you, bro) and that the sample size is too small to consider (the average percentage of reviews on Glassdoor compared to the number of employees in a company is 20%-- way too big to dismiss out of hand). Don’t be one of those companies. Listen to your employees. Try to improve your culture. Read your culture book. It might not have all the answers, but it is a big part of puzzle.
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CultureX reposted this
The question “What is the cultural secret to strong financial performance” is not easy to answer, largely because it is so context- and strategy-specific. A strong culture of performance for Microsoft is different than for Apple, let alone than for Chick-fil-A. Because of this, we would expect the differences between highly financially successful cultures to be more interesting than their similarities. That said, they do have some things in common. Let’s look at the ten largest market cap companies with major operations in the US (NVIDIA, Apple, Microsoft, Alphabet, Amazon, Meta, Tesla, Broadcom, Eli Lilly, and Walmart—Berkshire Hathaway excluded because subsidiaries are run as independent entities) and see, on average, what cultural topics (out of 237) employees tend to speak the most positively about compared to their industries. This results in a list of cultural and employee experience dimensions that companies which have created the most value in the world tend to do well, versus industry peers, according to their employees’ recent Glassdoor reviews. - The main things high market caps do differently is compensation (and, to a lesser extent, benefits and perks). What is the causality here? Are they financially successful because they pay well, or because they are so financially successful they can splash out on strong compensation? Unclear. But you can see how this would be attractive to the best talent. - High market caps engage and retain the best (intelligent, impressive) talent. Is part of this compensation? No doubt, but they also seem to do a good job of making work meaningful. - High market cap companies have in touch leaders who listen to their employees and resolve their issues, which employees feel comfortable raising honestly. I could go on about this all day… but this is basically the heart of effective cultural measurement. The highest market cap companies effectively manage culture by listening and responding to the voice of the employee. (Note: these findings broadly hold true regardless of whether mean or median is used to calculate scores, suggesting limited skew from outliers)
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CultureX reposted this
It was a real pleasure speaking with Marvin Boakye a couple of weeks ago. Like all of our Culture Champions, Marvin leads (as CHRO) a company with a measurably remarkable culture (Cummins Inc.). As I have observed anecdotally in all of these conversations, as well as through research, fantastic cultures tend to be led by fantastic leaders, and Marvin’s empathy, thoughtfulness, and insight contributed to a warm but eye-opening discussion. “Every company has a culture, whether they know it or not,” Marvin began. “Very, very few companies have an intentional culture.” How true is this. As I often point out, most cultures are mediocre or worse. On Glassdoor, the average culture is rated 3.6 stars out of 5. If your Uber was approaching you with a 3.6 star rating, would you get in it? Absolutely not, but this is what billions of employees do every day when they go to work. What a shame. Culture is rarely managed intentionally (if it were, there would be lots of ways to improve those ratings), but every company still has a culture. Prioritized or ignored, culture is still present, governing thousands of value creating or destroying algorithms (like “do I raise my hand in this meeting or not?”). Cummins is one of the strongest examples in the world of a large company that successfully practices intentional culture. As you can see from how thousands of employees recently spoke about Cummins compared to 85 industrials peers (e.g., Siemens, Honeywell, GE) on Glassdoor, the culture is remarkable. Cummins employees are about twice as likely to say their employer cares about them than the average employer in their peer set. They are more than four times as likely to say that DEI is going well. And, as we discuss in the podcast, Cummins has managed to foster a world-class culture while posting strong financial performance. In fact, the company views its culture as a strategic imperative to value creation (see MIT SMR article). It is really fun to learn “how they did it” from the Culture Champions, and our discussion with Marvin was full of great moments. His story about his first executive committee meeting as CHRO made me laugh—those top team norms and rituals sound very different than most companies, but it is easy to see how they would lead to a much less toxic culture than normal (Cummins is an astounding 3.5 standard deviations above average for cultural health). If any business leader is interested in creating and sustaining a measurably world-class culture, I would recommend checking out this discussion. Marvin Youtube: https://lnkd.in/eYJZ7qwb Marvin Apple Podcast: https://lnkd.in/ewFV2KiB Marvin Spotify Podcast: https://lnkd.in/eDi8a7Ds Marvin MIT SMR Writeup: https://lnkd.in/eVWXvzYk
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CultureX reposted this
Culture is a company’s operating system and here are ten of the algorithms it governs: 1. Should I raise my hand in this meeting or not? (Psychological safety) 2. As a local manager, should I react proactively to a changing market condition or report back to headquarters and wait for a decision? (Agility) 3. Should I make sure that all of my reports are on the same page, or quickly move ahead? (Clear communication, Speed) 4. When I receive new, relevant information, do I promptly share it with departments I am collaborating with? (Cross unit collaboration, Transparency) 5. If my report makes a mistake, do I insult him behind his back? (Respect) 6. When a project goes wrong, do I take my share of responsibility or blame others? (Accountability) 7. Do I treat women the same as men? (Gender equity) 8. Do I go above and beyond, or do the bare minimum to get by? (Engagement, Workload) 9. Am I in competition with my colleagues, or do we help each other achieve objectives? (Cut-throat competition, Teamwork, Supportive) 10. If I see suspicious numbers, do I report them or pretend I did not see them? (Ethical) When you break culture down into the myriad algorithms it governs, you can understand why the majority of CEOs and CFOs believe that culture is a top 3 driver of financial value creation, out of any conceivable factor (Graham et al.). Not to mention culture is the number one driver of the employee experience (CultureX MIT research into what drives more than 1 million employee Glassdoor reviews’ overall rating). Say it loud, say it proud: Culture Matters.