Alive, impactful, measurable: How to bring company culture into the boardroom

The welcome your new team gives you on your first day. Catching up with a former colleague at an alumni event and hearing how much has changed since you left. Every age-old watercooler exchange (or virtual equivalent) that occurs in between. Company culture is all around us and on the surface is easy to recognize. But in truth, culture is difficult to measure, and that makes it an often-underappreciated part of boardroom-level conversations.

As HR leaders, it is our responsibility to understand how to measure and influence company culture, but also understand how to articulate the crucial role it plays in determining our organization’s success.

In this Q&A, Marissa Andrada, Board Director, Krispy Kreme, and former CPO, Chipotle, speaks to HRD about the signs of strong company culture and how to bring company culture into the boardroom.

1. How can business leaders tell whether their culture is alive in their organization?

Marissa Andrada: Culture, purpose, and values aren’t as strong when they’re not organically woven into how a company behaves. When culture is not alive in the boardroom, it’s just about the brass tacks. Yes, it’s important to talk about results based on the goals of the company, but it can lose the context and understanding of the soul of the company. When the CEO starts the conversation with the company’s mission and purpose, the culture comes alive. And it must start with the leaders.

At Starbucks, for example, our mission was to inspire and nurture the human spirit one person, one cup, one neighborhood at a time. The way that culture was expressed was through decisions we made at the partner and board level with the frontline workers in mind. There was emotion. That’s how you know when the culture is alive in the boardroom.

2. Could you elaborate on measures or KPIs that could determine and measure the ‘health’ of company culture?

Marissa Andrada: There are some simple measures. Firstly, there’s top and bottom-line growth. However you want to see it, be it sales comp, EBITDA, or operating income. Look at the business measures, then look at customer satisfaction scores or net promoter scores. The next piece is internal people scores like retention, turnover, engagement, and discretionary effort. The other components, especially for public-facing companies, are how you approach environmental and sociological issues, and whether the demographics of your organization reflect the communities you serve.

All these basic measures, when they align, indicate a healthy company culture. It’s telling when companies don’t make the connection between their external performance and internal measures. When your operating expenses are out of control for example, then it’s an indicator you don’t have control over your culture.

3. Can you provide a real-world example where a failure to manage culture led to tangible negative business outcomes?

Marissa Andrada: Take Chipotle. Right before I joined their organization, they went through a huge food safety issue. They set up a whole set of food safety experts and protocols for the company. And yet the sales didn’t recoup, the stock price wasn’t bouncing back. There was a disconnect between the company’s plans and behavior at large. They were doing all the right things to drive safe outcomes and business outcomes for the company, but it just wasn’t connecting. To me, it’s a mismatch in culture and in leadership and communication when you don’t see that movement.

4. What strategies would you recommend for improving or strengthening culture as a tangible asset within an organization?

Marissa Andrada: The CEO, CHRO, and C-Suite need to have real clarity when they are embarking on any kind of mission to improve the results for a company or improve its culture. My philosophy is that culture is a direct reflection of leadership. But culture isn’t just because the tongue says so, and it still requires co-creation.

The strategy is not just for leaders to go off and create a set of strengthened purpose, culture, and values, and tell everybody else what it is. Instead, sample everybody from the frontline to middle management and get feedback about what matters for them and what is missing.

The role HR can play in all of this is to gather data and translate behaviors from the organization into what it looks like when someone is living up to core values. Take employee development. At Chipotle, in 2019, we had 80,000+ hourly employees who were worried about their financial well-being. We rolled out a debt-free degree scheme, an idea that came from the employees. Don’t surround yourself with an echo chamber of human capital or people leaders.

5. What do you see as the biggest external threat to company culture?

Marissa Andrada: The biggest issue or barrier to culture is not getting your arms around civility and kindness as an organization. You don’t need to be a rocket scientist to understand kindness. When social issues are brought into the workplace, everyone has a strong point of view. It’s divisive and that’s destructive to culture. Kindness comes into play and to me, it’s akin to common sense.

When you have a strong culture, it doesn’t matter what the social issues are. During issues like Black Lives Matter and Roe v Wade, people and companies were making their statements right away. But for the companies whose culture was strong enough, they did not need to make a statement about these issues. Their values spoke for them.