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Written by 4:43 am People & Culture

A data-driven approach to build a healthy organisation culture via eNPS

In our conversations with 70+ founders and people leaders, culture has emerged as one of the most challenging areas to fix in organisations. Two concerns that stand out are:

  • Is there a structured way to approach people and culture?
  • Is it possible to build a high-performance culture without resorting to guesswork?

Our in-depth experience of helping hyper-growth organisations scale has shown that the answer to both these questions is a resounding ‘yes’. And the way to do this is by designing, building and measuring organisation culture in a scientific and data-driven manner. In this article, you will learn how to build a high-performance culture using the insights from organisations that are already on this journey.

Organisation health via eNPS – the cornerstone of a high-performance culture

We measure organisation health using a mix of time tested tools such as surveys and focused group discussions (FGD). We call our framework the ‘Greek Temple’ because it resembles the ‘Parthenon’ in ancient Greece. You can lay the foundation by defining the Org principles that embody the type of organisation to be built and working ways to be institutionalised. The three core organisational pillars are:  

  • Processes: Uncover the org positioning in the spectrum of bureaucratic vs chaotic
  • Practices: Check whether your employees approve of day-to-day people policies and practices around hiring, career growth, performance and rewards, etc.
  • People: Understand employee sentiments about their teams, managers & leaders

These three pillars together hold in place your overall organisation health, akin to a Greek temple. If either of the pillars weakens, the entire edifice can collapse.

The eNPS survey also provides organisations with eNPS and mNPS scores*. As you’ll learn later in this article, eNPS scores are strongly correlated to different parts of the pillars of our Greek temple. Organisations with a high-performance culture tend to have higher eNPS and higher block-level scores across all themes.

The eNPS survey is followed by FGDs with employees and one-on-one conversations with functional leaders across the organisation to probe deeper into the Greek Temple themes. These discussions tend to uncover the larger Org wide themes around employee sentiment as well as certain department/team specific themes. These conversations reveal the ‘why’ behind the scores.

Measure and understand culture through org health heatmaps – Understand with an example

To demonstrate what an organisation health heatmap tells you about culture and what you can do about it, let us share an example of a high growth organisation.

Exhibit_2

The median eNPS score for the startup ecosystem is 32. An eNPS of 53 implies good organisation health.

Each block on the heatmap represents a different theme pertaining to the respective pillar of the Greek temple. The blocks with a lightning symbol have a high statistical correlation with eNPS (as computed by the ML algorithm). This means that an improvement in these blocks is more likely to improve the overall eNPS of the organisation than that of the others.

In our example, a glance reveals that ‘Performance & Rewards’ is an immediate must-fix area that can have the highest impact on improving the eNPS, given the block has the lowest score compared to other blocks and has a high statical correlation with eNPS. 

The next blocks to be looked at are the ones coloured in amber. Since ‘Managers’ has a high correlation with eNPS, it should be prioritised. The most common concerns here are the fairness in the way managers manage their teams and how much they value their team members’ opinions.

The other blocks to be looked at from a short term lens are Decision Making & Innovation followed by Policies, Org Principles and Career & Development.

Measure employee sentiment to crack your org's culture code

What should you do to improve your org culture with eNPS?

5 insights from 70+ orgs that have used 10xPeople’s assessment

In this section, we share insights from 70+ organisations on how they have used eNPS to shape their organisation culture.

Learning 1: Culture tends to dilute as organisations scale

Exhibit_3

The eNPS score tends to decrease as the size of the company increases. The fall is especially sharp (44%) between organisations with 150-250 employees and those with 250-600. Although eNPS tends to rise for organisations with 750+ employees, the score is substantially lower compared to the ones with less than 70 people.

A decrease in eNPS overlaps with the growth phase in most organisations, indicating culture dilution as a company rapidly adds more employees. Once they cross the growth phase or a threshold of 600+ employees, companies typically formalise processes and practices and consolidate their organisation culture, resulting in a higher eNPS.

Learning 2: How proud your employees feel about your org matters

Sense of pride drives eNPS for over 75% of the companies we have worked with. Employees tend to relate this to the impact organisation has created on society i.e. customers’ lives, environment, etc. The organisation’s cultural norms on transparency and ownership also contribute to the sense of pride. Employees of organisations which create a positive impact on society and drive a culture of high transparency and ownership tend to have a high sense of pride.

Learning 3: Managers have a disproportionate impact on eNPS

Exhibit_4

Manager effectiveness has driven eNPS in over 70% of the organisations. We have seen that mNPS has an exponential effect on eNPS once it crosses the median score of 40.

Here are a few recurring themes in the ecosystem that reveal why scores for this driver could be low:

  • Fairness – 28% of employees don’t feel their manager is fair while managing individuals in the team
  • Valuing opinions – 28% of employees don’t feel that their manager values their opinions
  • Technical knowledge – 25% of employees don’t feel that their manager has the technical knowledge to lead

So, what do the top-quartile managers do well?

  1. Caring for their reportees – 99% of employees feel their manager cares about them
  2. Good problem-solving skills – 98% of employees feel their managers guide them in problem-solving
  3. Conduct regular one-on-one conversations – 96% of employees find such conversations to be regular and productive

Learning 4: Consistently delayed and non-inclusive decision making will prove costly

The effective decision-making process and autonomy impact eNPS in over 55% of organisations. Companies with low scores in this area have two themes in common:

  1. Too many layers lead to delayed decisions
  2. No involvement of key stakeholders in the decision-making process (a lot of key stakeholders are informed after decisions are made)

Learning 5: ‘Employee-friendly’ policies mean little if not supported by actual norms and culture

People-friendly employee policies and work-life balance are drivers of eNPS for over 50% and 40% of organisations respectively. You may find this surprising given that a lot of startups are known for their employee-friendly policies such as unlimited time off from work. However, their culture is not always suitable for the adoption of such policies. High levels of ownership and bias for action often result in employees stretching beyond regular work hours to create an impact. Employees who don’t follow this norm tend to feel left out.

Why should you care about eNPS? Can eNPS help retain employees?

Exhibit 5

Attrition is highest (35%) amongst detractors.

eNPS is inversely proportional to employee attrition. The cost of passives getting converted to detractors, who are 13% more likely to leave, can be substantial for organisations. On the other hand, organisations can significantly benefit when detractors get converted into promoters, who are 14% less likely to leave. Getting passives to become promoters also reduces the likelihood of attrition by 1%.

How can you get started with eNPS?

What we have shared in this article are broad themes that apply to most organisations. You need to understand what specific areas would be important for your organisation to build and maintain a healthy culture.

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*Similar to CNPS or Customer Net Promoter Score, eNPS and mNPS are measured on a scale of -100 to +100 based on employee responses to the following questions:

  • On a scale of 0-10, how likely are you to recommend your organisation as a great place to work?
  • On a scale of 0-10, how likely are you to recommend your manager to your friends?

Employees who mark 9 or 10 are classified as promoters; those who select 7 or 8 are passives, and everyone whose response is 6 or below is a detractor. The eNPS and mNPS are arrived at using the following formula: % of promoters – % of detractors.

We would like to thank Arun Vigneswaran, Head – People Excellence, xto10x, and Avinash Dontamsetty, Consultant, xto10x, for their invaluable contributions to this article.

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Last modified: December 6, 2021