Culture, and its impact, is difficult to measure in traditional financial terms. But it can affect various aspects of a business, such as employee engagement and retention, productivity, and customer loyalty that drives repeat business, referrals, and long-term success. It can also promote creativity and innovation, translating into new products, services or processes that can increase revenue and market share. All very good things, but not easy to attach to a dollar amount! 

To measure the ROI of culture, you need to look beyond financial metrics and consider the impact on people and the organisation as a whole. Here are some steps to follow: 

1. Define your culture 

The first step in measuring the ROI of culture is to define what it means for your organisation. What are your values, mission and vision, and how do they influence the behaviour of your employees? For example, Zappos is fundamentally a customer satisfaction-driven business, requiring super customer-focused employees. 

Once you clearly understand your unique culture and the behaviours and business processes required to reinforce it, you can track what’s working (and what isn’t) across the business.  

2. Set clear goals and KPIs to measure what matters 

When you think about it, a poor performing culture will be easy to spot because your data will show turnover and absenteeism is up, productivity is down, and customer satisfaction will be a 1-star standard. 

To help measure the ROI of culture, have clear goals and Key Performance Indicators (KPIs) that align with your business strategy. That may be reducing turnover rates and unscheduled absenteeism, reducing recruitment costs and time to fill, increasing productivity or improving customer satisfaction. Things that are tracked can be measured. 

3. Collect and analyse the right data 

Collect all the relevant data you have that reflects the impact of your culture on your business goals. This can include employee engagement surveys, turnover rates, productivity metrics, customer satisfaction scores, customer and employee referrals, and revenue growth rates. 

Ensure you collect data regularly and consistently to track changes and trends over time. For example, you might collect the perceptions of new hires at onboarding to create a cultural baseline, and then run quarterly surveys throughout their first year to track how their perceptions of culture change. 

4. Look at the big picture to measure your ROI 

If you’re looking to attach a financial figure to your ROI, you could try comparing the costs of implementing and maintaining your culture to the benefits it offers. Consider things like, the cost of training, communication and other cultural initiatives, the increased revenue from higher innovation productivity and customer loyalty, as well as the savings from reduced turnover and recruitment costs. But as culture is a competitive advantage touching every aspect of the business, it’s important to consider the tangible and intangible impact at both the micro and macro levels. 

When you can measure the ROI of your culture, you can make informed decisions about how to invest in it to drive long-term success. Remember that culture is not something you can change overnight, but with a commitment to improvement and a data-driven approach, you can develop a culture that drives innovation, engagement and growth