Welcome to the third module of People Analytics. Now you will learn how to measure and manage culture. One of the most important aspects of performance management, which we talked about in the last module, is being able to understand what characteristics top performers and top performing teams have. For that reason, we also have to understand what are the features of the environment in which they operate at maximum capacities. A sports analogy makes this very simple. Let's take Leo Messi, one of the best soccer players of all time. He's the all time top scorer of Spanish La Liga and the European Champions League. He won 25 titles with Barcelona, and four times was named FIFA player of the year. This list can be continued almost indefinitely. Messi is an ideal performer, yet he hasn't yet won a single significant trophy within Argentina's national team. And this is also a great team bringing together legion players from top clubs all over the world. Even great performers will not necessarily perform as great in another team. Why is that? In this module, you will learn about the interplay of culture, values, skills, and performance. We have already talked about performance management, in this lecture we turn to assessing cultural value fit. Harvard professor Boris Groysberg studied performance changes for Wall Street professionals switching companies. It turns out, professionals moving to superior companies are more likely to improve performance. While professionals moving to weaker teams, experienced the sharpest decline in performance. However, moving to a new firm with colleagues protected performance. Professionals who moved as a team were more likely to perform well after the move, than those who moved solo. Organizational culture refers to employees' shared assumptions and norms, as well as tangible aspects of the work environment that influence and reflect those beliefs. The foundation of corporate culture is laid down by the company's founders and top management. It deals with demonstrating, and encouraging in others, certain behaviors. It doesn't necessarily have anything to do with values stated on corporate websites or displayed in lobby decorations. In the end, it is about employee behaviors, not about slogans. In corporate culture and performance, Kotter and Heskett were the first to show empirically how corporate culture influences performance. They found that companies with what they called performance-enhancing culture significantly outperformed those without it. In fact, the stock price growth of 12 companies with performance-enhancing culture, was 12 times higher than those in the control group. The researchers found out that even though the cultures of successful companies were different, they shared [INAUDIBLE] characteristics. First, they emphasized customers, investors, and employees. Second, they were adaptable to change. They saw that correlation stands by the numerals compounded variables they found. The most critical task for the organization is to figure out what kind of organizational culture as a whole it has, and which specific elements of this culture enhance organizational performance. This magic formula would be very much different, unique for each organization. But it directly affects all people management issues, including what people should be hired or let go, how they should be managed, evaluated, developed, paid and so on.