Understanding the core elements that foster a thriving, high-performing workplace beyond traditional engagement metrics.
Employee engagement is one of the most widely used metrics for gauging an organization’s health, but many CEOs are realizing that merely measuring engagement is not enough to drive meaningful cultural change. Engagement, which is typically defined as the emotional connection and commitment an employee feels toward their job, team, and organization, is essential for productivity, morale, and retention. Yet, despite its importance, engagement scores have stagnated. In the first quarter of 2024, engagement in the U.S. hit an 11-year low, with only a slight improvement in the following quarter, according to Gallup. Measuring engagement alone, without a clear understanding of what drives it, will not lead to sustainable improvements.
As a CEO coach and organizational psychologist, I frequently speak with executives who are puzzled by fluctuating engagement scores. They want to improve engagement but lack a deep understanding of the factors that truly influence it. What they are missing is a focus on the fundamental elements that drive engagement—and ultimately, the transformation of organizational culture.
Why Engagement Measurement Alone Isn’t Enough
Zack Wieder, CEO of Principles, offers a useful metaphor: the “swing vs. the shot.” In golf, a player doesn’t improve their game simply by looking at the score at the end of the round. Instead, they must focus on their swing—how they approach each shot. Similarly, organizations often focus on the end result (annual engagement scores) rather than the underlying elements (team dynamics, communication, and collaboration) that drive those scores. To truly improve engagement, companies need to measure and address these core elements.
In fact, research indicates that approximately 70% of culture transformation efforts fail, according to McKinsey. Why? Organizations frequently struggle with several common challenges, including trying to change too many things at once, lacking a clear strategy for what they want to improve, and focusing on short-term solutions instead of long-term cultural shifts. Many companies adopt “flavor of the week” initiatives, which generate initial excitement but ultimately fail because they are not integrated into the company’s overall strategy.
Common Cultural Challenges and Their Impact
When organizations fail to focus on the deeper aspects of culture, they face several negative consequences:
- Poor communication across departments and teams.
- Lack of clarity about roles, responsibilities, and goals.
- Disconnection among employees, particularly in remote or hybrid environments.
- Insufficient recognition of employee contributions.
- Ineffective collaboration and teamwork.
These issues often result in high employee turnover, disengagement, and missed growth opportunities. Overcoming them requires a comprehensive approach to culture transformation—one that focuses on the core elements of how employees interact, make decisions, and approach their work.
A Framework for Transforming Culture
True culture transformation takes time—often up to three years—and requires a long-term commitment. Executives must provide a clear framework for what they are trying to achieve, why it matters, and how progress will be measured. Culture change must be woven into all aspects of the organization, from leadership development and meeting culture to day-to-day interactions between employees.
Our organization’s research center, the Leader and Organization Vitality Center, in collaboration with the Principles Team, has conducted extensive research on the elements that foster cohesive, high-performing teams and thriving cultures. We’ve identified five key factors that drive team cohesion and overall culture:
- Connection: The emotional and social ties that employees feel toward their colleagues and the organization.
- Candid Communication: Honest, straightforward communication that fosters transparency and trust.
- Clarity: Clear expectations around roles, processes, and goals, ensuring that everyone knows what is required of them.
- Collaboration: The extent to which employees support one another and hold each other accountable for performance.
- Contribution: The alignment of individual actions with the organization’s core values, goals, and overall impact.
These five elements, which can be measured through surveys and assessments, account for a significant portion of employee job satisfaction and cultural health. In fact, our research suggests they explain roughly 50% of the variance in job satisfaction and nearly 80% of the variance in satisfaction with organizational culture.
Building an Actionable Plan for Cultural Transformation
Once organizations understand where they stand on these five elements, they can create a targeted, actionable plan for cultural transformation. By focusing on these core drivers, companies can foster a healthy, high-performing environment where employees feel connected, engaged, and empowered to do their best work.
The outcomes of a successful cultural transformation include:
- Increased open communication and trust throughout the organization.
- Greater clarity around roles, processes, and organizational goals, leading to higher efficiency.
- Stronger employee connections, promoting a shared sense of purpose and belonging.
- Recognition of individual contributions, ensuring employees feel valued and aligned with the organization’s broader mission.
- Improved collaboration, resulting in high-performing teams that consistently deliver results.
In today’s rapidly changing business landscape, the companies that will succeed in the years to come are those that prioritize building a culture of trust, communication, and collaboration. Organizations can no longer rely on measuring engagement alone. They must dig deeper, measure the core elements that create extraordinary cultures, and build a roadmap for long-term cultural transformation. Only then will they unlock the full potential of their teams and drive the highest levels of performance.
Post Views: 25
