Culture Quantified: A Look at MITSloan’s Research into Company Culture
Jason Bacaj | 5 min read
Every so often we come across a project that catches our eye and causes us to sit up and say ‘Oh, that’s interesting.’
A recent collaboration between MIT Sloan Management Review and Glassdoor made us do exactly that. Their joint project, called the Culture 500, used machine learning to analyze more than one million reviews on Glassdoor of some of the largest companies with a presence in the United States. The result is not only a measurement of culture, culture quantified, but an interactive tool that allows you to compare company cultures across industries—one that’s near impossible not to fiddle around with.
So we were impressed when MIT Sloan Management Review this summer published the Culture 500, a three-year study done in collaboration with Glassdoor and CultureX. But, then again, what more would you expect from a publication affiliated with a world-class research institution and Glassdoor, one of the largest job sites in the world?
Researchers started off by whittling down the more than 60 unique values held by each company to the nine most frequently cited: agility, collaboration, customer, diversity, execution, innovation, integrity, performance, and respect.
The study then analyzed 1.2 million reviews on Glassdoor, or an average of “over 2,000 employee reviews—the equivalent of three full-length books’ worth of textual data” for each company in the Culture 500. The analysis was done through artificial intelligence and machine learning. Specifically, the project wielded natural language processing that was tweaked and adjusted by human researchers. By the end, they’d built a dictionary of more than 20,000 terms, which is why the project took longer than an elephant pregnancy.
What the AI program looked for were reviews that mentioned the value and how many mentioned it in a positive light—a familiar tactic to job seekers who try to measure culture during the application process. Some statistical wizardry was applied and, lo and behold, the researchers found culture quantified.
Nine Most Common Cultural Values
Employees can respond quickly and effectively to changes in the marketplace and seize new opportunities.
Employees work well together within their team and across different parts of the organization.
Employees put customers at the center of everything they do, listening to them and prioritizing their needs.
Company promotes a diverse and inclusive workplace where no one is disadvantaged because of their gender, race, ethnicity, sexual orientation, religion, or nationality.
Employees are empowered to act, have the resources they need, adhere to process discipline, and are held accountable for results.
Company pioneers novel products, services, technologies, or ways of working.
Employees consistently act in an honest and ethical manner.
Company rewards results through compensation, informal recognition, and promotions, and deals effectively with underperforming employees.
Employees demonstrate consideration and courtesy for others, and treat each other with dignity.
This is all very cool and very interesting, especially when comparing companies within industries. For instance, in the retail industry, Family Dollar employees see customer satisfaction as important as employees at Nordstrom. However, Family Dollar employees don’t believe the company culture emphasizes integrity and ethics.
You might be wondering whether this culture quantification tool has much value beyond finding fun facts and the use of AI in its development, and that’s fair. There are a few potential insights tucked into the data once you bring specific questions or thoughts to the interactive tool.
Culture in Action
The Culture 500 doesn’t provide a real-time picture of company culture. But the one-time snapshot it provides is an accurate portrait of these cultures and industries, because of the rules around Glassdoor reviews. The way it works, in a nutshell: employees submit anonymous reviews, are limited to one review per company per year, reviews can only be viewed after leaving a review, and companies can’t remove negative ones.
One suggestion the researchers make is using the data to see whether an industry is ripe for a shakeup. The most direct example is the banking industry. Regional banks and financial services ranked low for innovation, which the researchers say foreshadowed the rise of fintech startups.
Reviews as a Leading Indicator
Employee reviews also can act as a leading indicator for diagnosing culture problems. And culture problems can spiral into much larger issues. The Culture 500 opens with an anecdote from early 2018 when Wells Fargo was penalized by the Federal Reserve after a scandal whose “root cause… was the culture of the division” that perpetrated financial fraud.
According to the research, in the years before the fraud, “Wells Fargo employees were nearly twice as likely to discuss integrity in their reviews, and half as likely to discuss the bank’s ethics in positive terms compared with other large banks.”
While that example is fairly extreme, the value of paying attention to cultural issues as they crop up in employee reviews is clear. Recognizing the value empowers you to act within the organization to address it, whatever that may be. There’s a dollar value to it, which the Culture 500 researchers pointed out: companies with strong culture see nearly 20% higher returns to shareholders.
Understand Dynamic Markets
This measurement also benchmarks the culture of industry-leading companies. As such, it provides some insight into what values you might want to emphasize the next time your company revisits them.
Maybe your organization is in general retail or is a grocer and would like to emulate Costco’s culture. In that case it’s best to focus on customer needs, integrity and honesty, and respect. Or if you want to emulate the industrial conglomerate 3M, the focus should fall on collaboration, execution, and innovation.
All in all, it’s hard to measure culture. This particular measurement, however imperfect, is useful and worth checking out. Because the more layers of understanding we can wrap around the drivers of company culture, the healthier employees will be and the better organizations will perform.
BY JASON BACAJ
Jason is a content creator with Wisetail. Through research and interviews, he works to help L&D pros grow the breadth of their knowledge. He’s a recovering journalist fascinated with learning.