Matthew Corritore, Amir Goldberg, and Sameer B. Srivastava
From the Magazine (January–February 2020)
Jean-Pierre Attal/Courtesy of Galerie Olivier Waltman
A business’s culture can catalyze or undermine success. Yet the tools
available for measuring it—namely, employee surveys and
questionnaires—have significant shortcomings. Employee self-reports
are often unreliable. The values and beliefs that people say are important
to them, for example, are often not reflected in how they actually
behave. Moreover, surveys provide static, or at best episodic, snapshots
of organizations that are constantly evolving. And they’re limited by
researchers’ tendency to assume that distinctive and idiosyncratic
cultures can be neatly categorized into a few common types.
Our research focuses on a new method for assessing and measuring
organizational culture. We used big-data processing to mine the
ubiquitous “digital traces” of culture in electronic communications, such
as emails, Slack messages, and Glassdoor reviews. By studying the
language employees use in these communications, we can measure how
culture actually influences their thoughts and behavior at work.
In one study, two of us partnered with a midsize technology company to
assess the degree of cultural fit between employees and their colleagues
on the basis of similarity of linguistic style expressed in internal email
messages. In a separate study, two of us analyzed the content of Slack
messages exchanged among members of nearly 120 software
development teams. We examined the diversity of thoughts, ideas, and
meaning expressed by team members and then measured whether it was
beneficial or detrimental to team performance. We also partnered with
employer-review website Glassdoor to analyze how employees talk
about their organizations’ culture in anonymous reviews to examine the
effects of cultural diversity on organizational efficiency and innovation.
Jean-Pierre Attal/Courtesy of Galerie Olivier Waltman
The explosion of digital trace data such as emails and Slack
communications—together with the availability of computational
methods that are faster, cheaper, and easier to use—has ushered in a
new scientific approach to measuring culture. Our computational-
lingustics approach is challenging prevailing assumptions in the field of
people analytics and revealing novel insights about how managers can
harness culture as a strategic resource. We believe that with appropriate
measures to safeguard employee privacy and minimize algorithmic bias
it holds great promise as a tool for managers grappling with culture
issues in their firms.
The Studies
Our recent studies have focused on cultural fit versus adaptability, the
pros and cons of fitting in, cognitive diversity, and the effects of
diversity on organizational performance. Let’s look at each in detail.
Fit versus adaptability.
When managers think about hiring for cultural fit, they focus almost
exclusively on whether candidates reflect the values, norms, and
behaviors of the team or organization as it currently exists. They often
fail to consider cultural adaptability—the ability to rapidly learn and
conform to organizational cultural norms as they change over time. In a
recent study two of us conducted with Stanford’s V. Govind Manian and
Christopher Potts, we analyzed how cultural fit and cultural adaptability
affected individual performance at a high-tech company by comparing
linguistic styles expressed in more than 10 million internal email
messages exchanged over five years among 601 employees. For
example, we looked at the extent to which an employee used swear
words when communicating with colleagues who themselves cursed
frequently or used personal pronouns (“we” or “I”) that matched those
used by her peer group. We also tracked how employees adapted to
their peers’ cultural conventions over time.
We found, as expected, that a high level of cultural fit led to more
promotions, more-favorable performance evaluations, higher bonuses,
and fewer involuntary departures. Cultural adaptability, however,
turned out to be even more important for success. Employees who could
quickly adapt to cultural norms as they changed over time were more
successful than employees who exhibited high cultural fit when first
hired. These cultural “adapters” were better able to maintain fit when
cultural norms changed or evolved, which is common in organizations
operating in fast-moving, dynamic environments.
These results suggest that the process of cultural alignment does not end
at the point of hire. Indeed, our study also found that employees
followed distinct enculturation trajectories—at certain times in their
tenure demonstrating more cultural fit with colleagues and at other
times less. Most eventually adapted to the behavioral norms of their
peers, and those who stayed at their company exhibited increasing
cultural fit over time. Employees who were eventually terminated were
those who had been unable to adapt to the culture. Employees who left
voluntarily were the most fascinating: They quickly adapted culturally
early in their tenures but drifted out of step later on and were likely to
leave the firm once they became cultural outsiders.
To further assess how cultural fit and adaptability affect performance,
Berkeley’s Jennifer Chatman and Richard Lu and two of us surveyed
employees at the same high-tech company to measure value congruence
(the extent to which employees’ core values and beliefs about a desirable
workplace fit with their peers) and perceptual congruence (how well
employees can read the “cultural code” by accurately reporting the
values held by peers). We found that value congruence is predictive of
retention—employees with it are less likely to voluntarily leave the
company—but is unrelated to job performance. We found that the
opposite is true of perceptual congruence: It is predictive of higher job
performance but unrelated to retention. These results suggest that
companies striving to foster a stable and committed workforce should
focus on hiring candidates who share similar values with current
employees. Employers needing people who can quickly assimilate and
be productive should pay greater attention to candidates who
demonstrate the ability to adapt to new cultural contexts.
The benefits of not fitting in.
When might it better to hire a cultural misfit? People who see the world
differently and have diverse ideas and perspectives often bring creativity
and innovation to an organization. But because of their outsider status,
they may struggle to have their ideas recognized by colleagues as
legitimate. In a recent study two of us conducted with V. Govind
Manian, Christopher Potts, and William Monroe, we compared
employees’ levels of cultural fit with the extent to which they served as a
bridge between otherwise disconnected groups in the firm’s internal
communication network. For instance, an employee might have
connections with colleagues that bridge both the engineering and sales
departments, allowing her to access and pass on a greater variety of
information and ideas.
Consistent with prior work, we found that cultural fit was, on average,
positively associated with career success. The benefits of fitting in
culturally were especially great for individuals who served as network
bridges. When traversing the boundary between engineering and sales,
for example, they could hold their own in technical banter with the
former and in customer-oriented discourse with the latter. People who
attempted to span boundaries but could not display cultural
ambidexterity were especially penalized: They were seen as both cultural
outsiders and social outsiders without clear membership in any
particular social clique. However, we also identified a set of individuals
who benefited from being cultural misfits: those who did not have
networks spanning disparate groups but instead had strong connections
within a defined social clique. By building trusting social bonds with
colleagues, they were able to overcome their outsider status and
leverage their distinctiveness. These results suggest that an effective
hiring strategy should strive for a portfolio of both conformists—or at
least those who can rapidly adapt to a company’s changing culture—and
cultural misfits.
Cognitive diversity.
Proponents of cultural diversity in teams presume that it leads to
cognitive diversity; that is, diversity in thoughts and ideas. But the
findings about whether cognitive diversity helps or hinders team
performance are inconclusive. Part of the problem is that these studies
use imperfect proxies for cognitive diversity, such as diversity in
demographics, personalities, or self-reported beliefs and values.
Moreover, this line of research has rarely looked at how diversity is
actually expressed in communications and interactions, which is
problematic given that team members are sometimes reluctant to share
their real feelings and opinions. Finally, cognitive diversity is often
assumed to be static, even though we know team dynamics frequently
change over a project’s life cycle.
In a new study, which two of us conducted with Stanford researchers
Katharina Lix and Melissa Valentine, we overcame these challenges by
analyzing the content of Slack messages exchanged among team
members of 117 remote software-development teams. We identified
instances when team members discussing similar topics used diverse
meanings, perspectives, and styles, and then analyzed the impact of that
diversity on performance. For example, in discussions of customer
requirements, different interpretations of the desired look and feel of the
user interface in some cases led developers to talk past one another and
fail to coordinate but in other cases sparked creative new ideas.
Our results indicate that the performance consequences of cognitive
diversity vary as a function of project milestone stages. In the early
stages, when the team is defining the problem at hand, diversity lowers
the chances of successfully meeting milestones. During middle stages,
when the team is most likely to be engaged in ideation, diversity
increases the likelihood of team success. Diversity becomes an obstacle
again toward the end of a project, when the team is deep into execution.
Cultural diversity and the organization as a whole.
We’ve seen that there are trade-offs associated with diversity in teams,
but how does it affect the performance of entire organizations?
Conventional wisdom holds that firms must choose between a
homogeneous, efficient culture and a diverse, innovative culture. A
homogeneous culture improves efficiency and coordination, the theory
goes, because employees agree about the norms and beliefs guiding
work, but the benefits come at the expense of fewer novel ideas about
how to accomplish tasks. In contrast, a heterogeneous culture sacrifices
the benefits of consensus in favor of healthy disagreement among
employees that can promote adaptability and innovation. The evidence
supporting this thinking, however, is scant and inconclusive.
In a recent study, we analyzed the language that employees used when
describing their organization’s culture (for example, “our culture is
collaborative,” “our culture is entrepreneurial,” and so on) in
anonymous reviews of nearly 500 publicly traded companies on
Glassdoor. We first measured the level of interpersonal cultural
diversity, or disagreement among employees about the norms and
beliefs characterizing the organization. We found that interpersonal
cultural diversity makes it difficult for employees to coordinate with one
another and reduces the organization’s efficiency as measured by return
on assets.
We then measured the organizations’ level of intrapersonal cultural
diversity. Those with high intrapersonal cultural diversity had
employees with a large number of cultural ideas and beliefs about how
to accomplish tasks within the company (measured as the average
number of cultural topics that employees discussed in their Glassdoor
reviews). For instance, employees at Netflix conceptualized the work
culture in terms of autonomy, responsibility, collaboration, and intense
internal competition. We found that organizations with greater
intrapersonal cultural diversity had higher market valuations and
produced more and higher-quality intellectual property via patenting,
evidence that their employees’ diverse ideas about how to do work led
them to be more creative and innovative.
Jean-Pierre Attal/Courtesy of Galerie Olivier Waltman
About the art: In his project Cells, photographer Jean-Pierre Attal explores the social urban archaeology of modern office towers, revealing the recurrence of patterns and postures found inside.
This suggests that organizations may be able to resolve the assumed
trade-off between efficiency and innovation by encouraging diverse
cultural ideas while fostering agreement among employees about the
importance of a common set of organizational norms and beliefs. Again,
consider Netflix: Although “multicultural” employees contributed to the
company’s diverse culture and drove innovation, the culture was
nonetheless anchored by core shared beliefs, such as the importance of
radical transparency and accountability, which help employees
coordinate and work efficiently.
Implications for Practice
How can these findings inform leaders’ understanding of culture as a
tool for improving the performance of employees, teams, and the
broader organization?
First, managers can increase retention by hiring candidates whose core
values and beliefs about a desirable workplace align well with those of
current employees. However, too much emphasis on cultural fit can
stifle diversity and cause managers to overlook promising candidates
with unique perspectives. Hiring managers should look for candidates
who demonstrate cultural adaptability, as these employees may be better
able to adjust to the inevitable cultural changes that occur as
organizations navigate increasingly dynamic markets and an evolving
workforce.
Hiring managers should also not overlook cultural misfits. They can be
wellsprings of creativity and innovation. But to make sure they flourish
inside the organization, managers should consider assigning them to
roles in which they are likely to develop strong connections within
particular social groups. That’s because misfits need the trust and
support of colleagues to be seen as quirky innovators rather than
outlandish outsiders.
Second, leaders should be mindful that the expression of diverse
perspectives in teams needs to be managed. Cognitive diversity is
essential for generating novel, innovative solutions to complex
problems, especially during the planning and ideation phases of a
project. However, the expression of diverse perspectives can quickly
become a liability when the team needs to focus on execution and meet
looming deadlines. It is during these times that team members have to
unify around a common interpretation of the problem and come to
agreement about what needs to get done to solve it. Leaders must be
adept at switching back and forth, learning when and how to promote
the expression of divergent opinions and meanings and when to create a
context for convergence.
An important distinction is warranted here. The term “diversity” is
often used to connote variation in the demographic makeup of a firm’s
workforce. This has been particularly the case in recent years, as
companies have tackled pernicious problems such as the
underrepresentation of women and minorities in decision-making
positions in organizations. In our work, we use “cultural diversity” to
refer to variation in people’s beliefs and normative expectations,
irrespective of their demographic composition. As we pointed out
earlier, demographic and cultural diversity are related, but a
demographically homogenous group may be culturally diverse, and vice
versa. Our research on cultural diversity is relevant to but ultimately
independent of efforts to increase gender, race, and ethnic diversity in
firms.
Third, leaders should foster a culture that is diverse yet consensual in
order to promote both innovation and efficiency. Such a culture is
composed of multicultural employees who each subscribe to a variety of
norms and beliefs about how to do work. These diverse ideas help
employees excel at complex tasks, such as dreaming up the next
groundbreaking innovation. Managers should encourage employees to
experiment with different ways of working—extensive collaboration for
some tasks, for example, and intense competition for others. At the
same time, a culture should also be consensual in that employees agree
on a common set of cultural norms—shared understandings—that helps
them successfully coordinate with one another. Leaders can signal the
importance of these norms during onboarding and in everyday
interactions, just as leaders at Netflix do by rewarding employees for
sharing their mistakes with colleagues in order to promote beliefs about
the value of transparency.
A New Management Tool
Many of the tools we used in these studies are off-the-shelf products,
and there is great potential for managers to use them to help solve
practical challenges inside organizations. For instance, Stanford PhD
candidate Anjali Bhatt is working with two of us to demonstrate how
language-based culture measures can be used to anticipate the pain
points of postmerger integration. We are studying the merger of three
retail banks, and analysis of emails has revealed stark differences in the
rates of cultural assimilation among individuals. Such tools can be used
diagnostically to assess the cultural alignment between firms during
premerger due diligence, as well as prescriptively during integration to
identify where and how to focus managerial interventions.
Yet the accessibility of these tools also raises important ethical concerns.
In our work, we maintain strict employee confidentiality, meaning that
neither we nor the organization is able to link any employee to any
specific communication used in our studies. We also strongly advise
against using these tools to select, reward, or punish individual
employees and teams, for at least four reasons: Accurately predicting
individual and team performance is considerably more challenging than
estimating average effects for broad types of individuals and teams;
culture is only one of many factors influencing individual and team
performance in organizations; algorithmic predictions often create a
false sense of certainty in managers; and finally, giving any algorithm
undue weight can have unintended consequences—for instance,
exacerbating human biases that negatively affect women and members
of underrepresented social groups.
Algorithms make estimates, but it is ultimately humans’ responsibility to
make informed judgments using them. Managers must be vigilant about
keeping metadata anonymous and must regularly audit algorithmic
decision-making for bias to ensure that the use of language-based tools
does not have unintended adverse consequences on culture itself—for
instance, by breeding employee distrust.
These important ethical questions notwithstanding, we believe that
these tools will continue to generate insights that allow managers to
finally manage the culture as a strategic resource, and ultimately lead to
more culturally diverse and inclusive teams and organizations.
A version of this article appeared in the January–February 2020 issue of Harvard Business Review.
Read more on Organizational
culture or related topics Data
and Analytics
Matthew Corritore is an assistant professor of strategy and organization at McGill’s Desautels Faculty of Management.
Amir Goldberg is an associate professor of organizational behavior at Stanford’s Graduate School of Business. He and Sameer B. Srivastava codirect the Berkeley-Stanford Computational Culture Lab.
Sameer B. Srivastava is an associate professor and the Harold Furst Chair in Management Philosophy and Values at the University of California, Berkeley’s Haas School of Business. He and Amir Goldberg codirect the Berkeley- Stanford Computational Culture Lab.
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Summary. Culture is easy to sense but hard to measure. The workhorses of culture research—
employee surveys and questionnaires—are often unreliable. Studying the language that
employees use in electronic communication has opened a new window into… more
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