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How do you audit a company’s culture?

A company’s culture is important on so many fronts. It’s how the employees feel whilst they are at work. It’s how the public perceives the business. It can even be a factor in the productivity of employees and the revenue which they generate for the business. Companies such as Google and Virgin thrive off their culture and the perception we, as the public, have of them. But can you actually audit a company’s culture?

A recent exercise required me to build a company’s audit universe and help set out the long term audit plan. (Side note: I have thoughts and opinions on long term audit plans and the need for internal audit to remain agile, but this is for another day). Throughout the exercise of matching company processes to controls, risks, and general audit topics, I wondered about the likelihood of actually performing a company culture audit. Nevertheless, the topic still made the audit universe, and was rated ‘N/A’ under ‘Next scheduled audit’.

Whilst I am fortunate to be working for a company that has a great culture, it still raised the questions; should we still perform a review to help ensure we can maintain this culture? Are we spending too much to maintain this current culture? In true fashion, I begun Googling to see what other thoughts and opinions exist.

The team at Thought Farmer have developed a great list of 14 questions to help you get started when planning a culture audit. The list is only a starting point, but is crosses over various topics such as internal communications, customer service, organisational structure and general employee satisfaction. Whilst each of these are important, to include each of these items in an audit scope would result in a significant amount of time and resources to perform a detailed review. Even then, for a company with a relatively ok culture, would the review generate much benefit and would it promote any change. Any recommendations relating to organisation structure and tolerance risk are often higher level discussions, with senior management making the ultimate decision. For a company with a poor culture, you wold hope management would be privy to the dissatisfaction of its staff and the impact it is having on its business. Furthermore, if management is aware of their current culture problems, you would hope they would be taking proactive steps to improve it. If not, any internal audit review is essentially a waste of time as management would be consciously ignoring it.

The list from Thought Farmer also considers items such as the company’s vision, reward and recognition, and employee treatment. These items are often queried during employee satisfaction surveys, however the results can often be skewed, with surveys released prior to any bonus payments, or during ‘high times’ such as Christmas and summer / end of year parties, when employees are generally happy with some of the benefits they receive. There is no perfect timing for an employee satisfaction survey, however from my experience, the questions relating to remuneration, reward and recognition generally always score low.

Factoring in the 14 starter questions, results of the employee satisfaction survey and potentially market perception of our business; the only remaining item for consideration is cost. Friday office drinks, pool tables, boot camp and yoga classes, book clubs, etc, all come at a cost to the business. Not only does the business have to pay for these services, but an employee is required to administrator these benefits. Whether this is a dedicated employee or someone ‘volunteering’ in addition to their current role, this is a cost associated to these benefits. Determining these costs may not necessarily be an easy feat, with many businesses not requiring timesheets from staff. Any costs associated with employees will be a best guess.

But how do you compare the cost back to the benefit? Ultimately, this is question you are attempting to address through a culture audit. What is the current culture within our business? Where do we want our culture to be? Are we set up right to achieve this? How much are we prepared to spend to achieve this? What is the value of benefit we expect to see?

Above all though, an owner for the report and recommendations needs to be identified. Any senior manager who has overseen the deterioration of a company’s culture will not want to put their name on the bottom of the report.

Whilst I know this blog does not help show how a company audit can be performed, it at least shows the complexities and areas for consideration when performing such a review.

Regardless of the state of the business, a culture review should still be performed to ensure that money is being spent appropriately to ensure a positive company culture. The outcomes of the review will only be as beneficial as senior management allows it to be. After all, it is the ‘Tone from the Top’ which impacts a business on every front, particularly culture.

Have you had experience in delivering a company culture audit? I would be interested to know your thoughts.

#company #culture #internal #audit #internalaudit #business #management #people

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