Doing the Math on Return on Culture

Numbers are my persistent frenemy.

I lose focus when counting past 7 and snooze drooled through calculus.
When asked how we'll measure the success of a workshop or culture improvement program, I cringe.

I'm not cringing because I believe culture work can’t be measured.

No matter how vast the ineffability might be, there's always a before and an after and some kind of countable difference between them.

40% meeting time saved. Employee engagement up by 32%.
Measurably zippier delivery and happier customers.

I cringe because I know leaders want me to promise them results.

I could. Just like the tabloids promise that you can drop 30 pounds in 30 days.
The claims are true, and the promise could come true. For some teams.
If the circumstances are just right.

(I lost 30 pounds in 30 days once, so it's doable!
But I'm not sure if giving birth is an option for everyone?)

The Method Behind Most Case Study Math

Here's how those nicely quantified claims come to be:

1. Before: surveys or a discovery project.
   We count everything we can count, and turn all the subjective "strongly disagrees” to “strongly agrees" into tidy charts.

2. We run the project.

3. Then, we check the numbers again.
   More surveys, more reports. Tada! There’s our After number.

4. We adjust our graphs and highlight the positive changes.
   The others? Boring. Nothing to see there.

For example, here's how Atlassian showed the benefits of a team retreat.

Before you send that angrygram, I’m not saying that these numbers are faked (often), or that they don’t represent a real improvement.
I know (many) folks apply significant methodological rigour here.

But can we tell if these numbers represent a lasting change?
Are we even sure it was the retreat that made the difference? Or might it actually be the departure of Evil Ellen, “the Demon Queen of HR”, that has them all so cheery?

Most organizations today can't answer these questions.
They just don't have the data.
Instead, leaders talk about the bigger culture picture as if it were intangible.
A vibe, a mood, or something HR handles on the side.

This is a mistake.
Culture isn’t free, and it isn’t soft. It is built through choices, time, and money.

Measuring Culture Over Time

I've been looking at how to nurture great cultures for over 20 years. Like you, I love the inspiring stories from visionary companies.

I've met many leaders featured in these stories. I’ve heard them complain about their multi-year "zero attrition" challenge. Success does indeed reward leaders with a better class of problems, which they’ll happily share in detail if you’ve got the time.

But who has time for the whole story?

No problem. These luminaries converted their experience into catchy anecdotes. From the messy mash of hard choices, real problems, and monotonous follow-through, they distill a pure elixir of leadership quips and conference talks.

We see their version of the Michael Jordan training montage from Space Jam.
In the keynote, the journey to GOAT runs about 30 seconds.

In reality, it takes years to build great cultures, and the job is never done.
It's also not one job, but instead, a series of coordinated and interwoven efforts.

The best organizations I know continue to invest heavily to keep their culture strong.
They know that as soon as they back off, the energy drains away.

Case in point: Atlassian has the data, and they saw that the boost from a retreat lasts about four months. Without a fresh injection of energy after that, you may land in a worse place than you were at the start.

I also know several once-great organizations that now hurt my heart to visit.
Where leaders who kept the story alive moved on, and new leaders must have thought the culture thing took care of itself.

As it always does. There's always a culture.

Of course, it could be a corpulent and diseased culture. Turnover, bureaucracy, rework, churn, backstabbing... that's culture too.

We’re always paying for culture.
The question is: what return are you getting?

This is an awkward conversation to have, because:

• We want and need to believe in the 30-second magical stories!
  These spark hope and help us commit to action.

• Our society prioritizes financial capital above all other forms. 
  We're not so good at talking about deficits in the other forms of energy an organization needs to thrive (social, experiential, etc.). We're even worse at thinking about how those deficits compound over time.

• Most orgs have few resources explicitly dedicated to culture design and maintenance. 
  Even when present, those folks often lack the necessary influence and insight required to ensure their efforts yield results.

So, instead of talking about the hard truths, the consultants, and trainers, and productivity tool vendors sell what overwhelmed leaders can easily understand and buy.

I know this because I’ve been all of the above: the consultant, the trainer, the tech vendor, and the leader, trying to figure out how to invest in my teams.

Survey -> project -> survey: blip!
Survey -> project -> survey: blip!
On repeat.

Which is often far short of what the organization needs.

Here's where Culture Math comes in.

Culture Math is a way to turn those hard-truth conversations into "no duh" conversations about expectations, tradeoffs, and investing wisely.
It shows:

• Where you actively spend to build and sustain culture.

• How those investments convert into impact: revenue, quality, talent, efficiency, innovation, and reputation.

• Whether your culture is compounding into a durable advantage, stuck in blahs-ville, or killing you softly.

I've been playing with this idea for some time. It's changed how I think about past experiences, how I read case studies, and how I structure client work.

I think you might find it handy too, so I'm putting it out there for your comments and critiques in a five-part series.

Series Overview

1. This intro

2. Six real-world mini case studies, and the lessons we can learn from them

3. How to calculate Culture Math, and what you might put in the equation

4. A leader’s playbook for getting a return on culture services, outlining the kind of investment and return you can expect for common projects, and ways to increase mutual accountability in contracting

5. Managing the culture portfolio: a thought-experiment about why orgs need a Culture GC on hand

Let's dive in.

The Math: Calculating Return on Culture Over Time

This equation recognizes two truths:

1. Culture functions like a metabolism.
   Every organization has a baseline energy requirement to stay healthy. Events and programs inject energy. Systems and maintenance routines keep it circulating. Positive relational habits regenerate it. Dysfunction and friction, on the other hand, burn energy faster than you can replenish it.

2. Money is our best measurable proxy for energy.
   Finance is the one measure that translates value across the whole system, making impacts visible across boundaries. For example, we can measure the cost of team retreats and compare that to gains in productivity, efficiency, or retention. Just like currency lets the baker turn bread into pedicures, money lets us translate culture investments into comparable returns.

An Example: 100-Person CPA Firm

This make-believe example is based on industry stats and assumes:

• 100 staff: 10 partners, 70 CPAs, 20 admins.

• Average billing rate = $250/hr, target = 1,600 billable hrs/year.

• Firm revenues ≈ $28M baseline.

Their math:

When you look at that example, what do you notice?

I see:

• Bottom line: a decent return. Double your money, baby! Who wouldn't like that?

• But - notice how unsexy the gains look compared to the miracle claims on LinkedIn. I mean, 1% better client retention? 3% more employee retention? 🥱

• I see one easy way they could quickly improve those retention numbers.
  Do you see it? It isn't something an outside contractor can force.

• ….
  |
  |
  |

• Ok, ok - it's the partner's time! They're each investing just 2 hours per week for mentoring the other 90 people. I bet they golf more than that. 🏌️‍♂️

This Culture Math example raises questions you know leaders face.
Like: what about the opportunity cost?

• Are the partners losing billable time?
  In a pure “billable hour” model, high-dollar partner time spent mentoring looks ruinous. Every 2 hrs/week invested in people = thousands in foregone revenue across the firm. Factor in lost revenue, and the gains quickly shrink.

• But - are those hours a critical capital investment?
  Those same 2 hrs/week may prevent rework, retain clients, and keep talent engaged. That creates a stronger platform for partners to land and grow the big-ticket clients they’re best positioned to serve.

• Does it make sense for partners to remain billable? 
  Or is it time for them to move fully into leader/manager/rainmaker roles?

• Most importantly, how could we make it easier for these leaders to make an informed choice?

About the "Math" in Culture Math

Don't you love how tidy that example is? How every bit of it is backed by a super clear, easy-to-track, standard metric?
Reminds me a bit of all those business case studies...

Getting tidy numbers won't be so easy in practice. That's OK!

The Return on Culture equation doesn't need precision to do its job.

Any attempt to calculate culture’s impact will be approximate, because the whole exercise is a proxy measure for energy. Much of the value (or damage) from cultural investments shows up indirectly across revenue, quality, talent, efficiency, innovation, and reputation. It's a complex dynamic system full of active choices, emergent results, and unintended consequences. Trying to measure it precisely would be like trying to measure hot jello on concrete; messy, slippery, and not the point.

The value is not in chasing decimal-point accuracy, but in forcing clarity. To arrive at an initial equation, you have to ask:

• What are we actually spending to shape culture (A+B+C)?

• Where do we expect to see benefits or risks show up? What do we see?

• What are the assumptions behind our choices? What changes are we willing to consider?

In practice, how you arrive at your figures is part of the exercise. The conversations about which indicators matter, which assumptions are reasonable, and what trade-offs you’re willing to make are themselves acts of culture design. The "math" illustrates the approach; the discipline of working it through reveals the value you intend to create.

You know what's even more useful? When the math doesn't pencil out.

Let's say the CPA firm in the example was making that $516k investment, but getting a negative return. Revenue down, error rates up, employees slipping away faster than a teen at chore time.

Then they'd need to figure out what they missed!

Are they also investing in asshole leaders, dehumanizing working hours, and ugly offices at the end of torturous commutes?
That's an AI-data center's worth of energy drain!
If so, all those coaching dollars are disappearing into a cultural money pit.

With these examples in mind, what else would you factor into the equation?

For those who think this is "too corporate"

Because I focus on team collaboration and ways of working, and at the same time acknowledge that leaders are held accountable for business results and must often make finance-driven decisions, I'm regularly accused of being "too corporate."

Here's what I think about that.

The training, facilitation, and consulting industries are in a hot load of trouble right now because for decades, we haven't been corporate enough.

We KNOW that a 3-hour workshop on psychological safety doesn't do anything on its own.
Sure, you can teach the concept in three hours, but can you learn it? Can you LIVE it? No! Abso-f'ing-lutely not.
And it's only in the living where it counts.

Whether we’re external providers or internal change leaders, when we propose a project that we know can't help teams on its own, without also having a conversation about what they'll need to do to get the benefit - what their total investment needs to be - we're no better than the tabloids.

I want my clients to understand that they need A, and B, and C.
They need the events, and the ecosystem, and the rituals.
I want them to understand the value, which means I need to talk about it in the same language that they use when evaluating all their other investments.

I'm not interested in repeating HR’s mistake.
We are not auxiliary to how organizations create value.
What we do matters. It matters to people's lives and it matters to organizations’ success, and when we fail to talk about the math behind WHY it matters so much, we make this work optional.

Easy to skip. Like, no more free t-shirts, no more workshops.

So if you truly care about the teams you serve, do the math.

Figure out how you can tune your investments to create the most amazing, most loving, most successful energetic culture around.

That's not "being corporate."
It's respecting everyone’s energy and being accountable.

Of course, those conversations are easier when you have relatable stories to back them up. Next week, I’ll share six new culture math examples from real-world organizations, showing how different investment approaches impact culture over time.

Until then, I look forward to your energetic critiques and suggestions.