Wave goodbye to clunky employee surveys, say Don and Charlie Sull

In our new article in The Economist,  Donald Sull and Charlie Sull argue that AI will transform leaders' ability to understand and improve corporate culture. Our key points:

1) Culture matters: Nearly 80% of CEOs and CFOs list corporate culture among the top five factors driving financial performance. Organizations with a healthy corporate culture can attract, retain, and engage the best employees. A study by Alex Edmans of the best places to work in the U.S. found that their returns to shareholders outperform peers by 24% over a five year period.

2) Culture is not where it needs to be: In the U.S., the average employer rates a 3.6 out of 5 on Glassdoor. Most people wouldn't relish a meal in a restaurant or a ride with an Uber driver with a similar rating. How excited do you think they are to work in an average culture?

3) Current tools to measure culture are ineffective: Organizations cannot improve culture unless they can measure it. Employee engagement surveys excel at assessing whether an employee is engaged, but fall short in measuring all the dimensions of culture. Faced with dozens of multiple choice questions, employees zone out and provide the same or similar answers to very different questions. Their numerical scores provide little context or guidance on how to improve. And of course they cannot discuss topics that are not included in the survey.

4) Free text is a goldmine of cultural insights: When employees answer open-ended questions they discuss what matters most to them, provide context on their concerns, and often suggest concrete recommendations for improvement. The sheer volume of employee feedback available to leaders is staggering. For a large organization, the free text from internal surveys, online reviews, 360 performance reviews, exit interviews, and other sources can equate to dozens of novel-length "books" brimming with granular insights from what employees have to say in their own words.

5) AI revolutionizes our ability to analyze free text: In the past, companies resorted to crude tools like word clouds or key-word search to analyze employee feedback. Now, large language models can reliably make sense of free text at scale. Our CultureX platform, for example, classifies employee feedback into hundreds of granular elements of culture. Armed with these measures, leaders can assess how well their organization lives its core values, identify toxic sub-cultures, smooth cultural integration in M&A, and identify what drives critical outcomes like employee engagement or innovation.

Full article here.