How do leaders influence organizational culture?


I have seen both good and bad organizational cultures during my career as a business leader. I have been affected by them and I have affected them. Once, I got the opportunity to really embark on a culture change journey in the role as CEO. In this article, I will describe how leaders influence organizational culture as well as share some of my personal tips that have proven successful. Before we go into the meat of the topic, let us answer the question in the header to provide an overview.

How do leaders influence organizational culture?

Leaders influence and affect organizational culture in many ways. The behavior and attitude of a leader serves as an example for others. Leaders and managers can affect organizational culture by who they recruit and who they fire. Leaders impact organizational culture by setting rules and policies. Culture is affected by decisions on what behaviors to reward and which to punish. Leaders shape organizational culture by deciding on on-boarding programs, visions and missions, philosophies, symbols, mentoring and coaching.

The above are examples and the list on how leaders influence organizational culture can be made much, much longer. Read this article to find out more about ways leaders affect organizational culture and for tips on how you can change your organizational culture.

Organizational culture – short introduction for leaders

In order to set the table for the discussion below, we need to expand a bit on the concept of organization culture. We will do that through a few short bullet points as a summary.

  • Organizational culture is collective and shared by all the participants, leaders as well as followers
  • Organizational culture often builds on history, symbols and emotions
  • Organizational culture is dynamic, i.e. it changes over time
  • Organizational culture is shaped over time by the environment as well as leaders and followers
  • Leaders are also affected by organizational culture, i.e. it goes both ways
  • Organizational culture can be created from scratch
  • Organizational culture can be remodeled or reengineered
  • Organizational culture can be strengthened
  • Existing culture can have an inertia or built-in resistance to change. The stronger the culture, the stronger the resistance
  • Changing an organizational culture is difficult and takes time.

How can leaders affect organizational culture?

Let us now go to a list of different elements a leader or manager can use in order to affect, influence and impact organizational culture. We will go through the following items in detail, one by one.

  1. The personal behaviors of the leader
  2. The leadership style of the leader
  3. Selection
  4. Expectations
  5. Tradition and Philosophies
  6. Setting the Mission of the organization
  7. Cultural Forms
  8. Socialization

All these elements are connected to organizational culture and they can be used as change vehicles to affect organizational culture.

1. The personal behaviors of the leader

Since a leader sets an example for others to follow, he or she will affect organizational culture through his or her personal behavior. There are a numerous different examples of this, so we have narrowed it down to a list of ten behaviors to give you something to start with.

  1. How do you treat others? As equals or as subordinates?
  2. Are you on time for meetings and appointments? Respect the time of others?
  3. How do you dress? Sloppy? Professionally?
  4. What kind of language do you use? Are you polite or rude? Profanity? Formal or informal?
  5. Do you listen to other people? Are you actively listening?
  6. Are meetings with you based on a monologue or do you involve other people in discussion?
  7. Do you intimidate others? Are they uncomfortable around you?
  8. Are you willing to help others around you?
  9. How do you speak? Scream? Whisper? Normal tone?
  10. Do you display confidence? Do you seem nervous?

The fact that the personal behaviors of the leader affects organizational culture is so obvious that it needs no proof in my mind. Consider working for either of the two following example leaders:

  • Leader A: This person is kind and respectful of others. This leader asks you questions and is curious about you. Leader A seeks dialogue and asks for your perspective. A tells you about personal thoughts and is a person you feel you can trust. Leader A is a common sense kind of person with a normal mood, you know what to expect from this person every day. If you have a problem, you know you can always go to leader A for assistance.
  • Leader B: This leader likes to always be right, interrupts other people and can brush people off. You feel a bit intimidated if you are going into a meeting with this person. Leader B has a reputation of scolding and yelling at people if they don’t do what’s expected of them. This person can be very nice to you for several weeks making you feel special and selected, only to yell into your face suddenly one day. If you have a problem and need help, you will never go to leader B, since you think it will end up with you getting the blame for the mere existence of a problem.

These people actually exist. I just described two different leaders I have encountered during my career. Leaders show the surroundings what they think is acceptable by displaying their own behaviors. Imagine if Leader A or Leader B was the CEO at the company you work? Do you think the organizational culture would be different depending on which one of them was CEO? Of course, it would.

Do you want to set an example of a high performing, skilled, involved and caring individual or an ivory tower executive that is more concerned over which wine to drink at company dinners? You need to decide intentionally on how to behave and what imprint you want to make on others. Bear in mind, you are a driver of organizational culture – good or bad.

2. The leadership style of the leader

We have numerous articles on leadership styles here at Leadershipahoy, and the style or styles chosen and used by a leader affects organizational culture. In the example above, Leader A used combinations of coaching leadership, democratic leadership and affiliative leadership. Leader B on the other hand exercised autocratic leadership and charismatic leadership. Consider the leadership style or styles you use and how it sets the tone for your team and people around you. Although the effect might be strongest on your direct reports, you also show them what is expected and tolerated, which they are likely to spread to their direct reports etc.

A few examples, a bit on the extreme side to prove a point, follow below.

Autocratic leadership style: You will be the boss. You decide everything and do not need much input from anyone. All others are subordinates and they should do what they are told. Lack of performance or mistakes are punished.
This will lead to a culture with no initiative, no empowerment, fear, suspicions and lack of trust.

Democratic leadership style: You show that you value others and their input. You want to involve people in decision making and you seek other perspectives and ideas. You are kind, transparent and communicative in general.
This will lead to a culture of innovation and empowered people. People will feel respected, value and trust each other. They will seek help and input from you and from each other. As a side effect, perhaps some decisions will take a bit too long, after all, loads of people need to have their say.

Laissez-Faire leadership style: You do not really get involved in things. You make sure the office works and that people get paid. Naturally, you file the necessary reports and keep things afloat. You expect everybody to do what they are supposed to do.
This will lead to a culture of people doing their own thing. Some people will do great and perform nicely, others will not. People get the feeling that you are not that interested in what they are doing or how the company is performing. If you do not really care that much, then why would they?

3. Selection

How do you outline the recruitment process in your organization? Is it perceived as easy to get a job with your organization or is it a complex process only few manage to qualify themselves through?

Consider the following different examples:

  • Company A had an office in a city in a rural area. Locally, people knew that if you are ever having a problem getting a job, you can always go to company A. They hire everyone. Also, it is an easy place to work at, no extreme expectations or anything. Sure, the pay is bad, but a job is a job.
  • Company B was also located in a rural setting. They were known for having high demands on their people. Numerous employees had been let go due to bad behavior or for not contributing. It was not that easy to get a job there, but once you got in and performed, it would be a good place to work at.

Now brace yourself. The examples are describing the same office in the same company but at different times. A was ten years earlier under different leadership. Eventually, a great leader took over, and the change from example A to B took place. Now think about what types of individuals would apply for work in company A and B respectively? Definitely different types of employees. This affects the organizational culture in the end.

In my career, we have had people who found inventive ways to avoid work almost completely. I have met people that have stolen from the company, people who have demotivated others, bullies and many other characters. I’m not saying everyone you dislike should be fired, but I am saying that if bad behavior is allowed without any consequences, the good performing people surrounding these bad apples will see what is accepted, and they will stop working as hard. After all, why should they go above and beyond if the polar opposite is tolerated in the organization? Why bother?

As a leader, you hire people, right? How you go about selecting those people and who you select will affect the organizational culture. If you hire creative thinkers that care more about new ideas than short term results, the organizational culture will eventually start drifting that way. If you hire enough of the same type of people that is.
The organizational culture is not just affected of the proportion of different types of people, but perhaps even more so by the attitudes of people. If you hire one or two laid back slackers who do not contribute, you will send signals to the existing high performers that you value other things in people. If you only hire “yes men”, people will notice that too.

4. Expectations

A leader sets a level of expectation, and expectations in turn affect an organizational culture. I had a job at a store when I was a teenager. This store had several types of machines that needed regular cleaning and maintenance, which was in my job scope. At one point, the store switched owners, from a pacesetting, high demanding owner, to a new one, unknown to us employees. In the beginning, the new owner was talking to me about the machines. He stated that the machines must be cleaned once a day. He added that it was a good rule to have since with that ambition, you would get it done every second or third day or so. What was he thinking? He told me about a rule and then immediately let me know that the rule was more of guidance and that he did not expect that guidance to be followed at all, really. I dare to say that productivity was lower under this new leader. It was also a better place to work at, since this guy was very nice, and we were more loyal to him, but that is another story. Compare this with the segment on leadership styles above and see how expectations and your leadership style are related.

There is an even higher impact on setting the right expectations on a new hire – after all, this is their introduction to the organization and the expectations set at this point will color their view of the organizational culture.

5. Traditions and philosophies

An organizational culture is shaped by its traditions, and a leader is in power to change and adapt those. Let us look at a few examples of traditions and how the leader can affect organizational culture through them.

  • Company X had always been proud of a long history of strong engineering knowledge and extreme quality. They never compromised with regulations and had a high margin for error in the research and development processes.
    The customers new company X as a safe choice – the equipment built by them never failed. However, they also knew that any requests on special modifications they might have would be turned down by company X. Furthermore, the products of company X was always the most expensive ones.
  • Company Y was in the same industry. This organization played a bit more loosely with rules and regulations. They were known to be cheap and very flexible with adjusting to customer requirements. However, the operators always had to be a bit careful with equipment bought from Y. It broke down now and then, and if you were not careful when you operated them, you might end up in dangerous situations if they were just slightly overloaded.

As a leader, you can change these philosophies over time by issuing instructions and setting expectations. You can start change projects, you can alter job scopes, you can allow for more or less time on different parts of project scopes.
Imagine you are the CEO of company Y mentioned above and you start demanding longer field tests and additional safety in product development. People would start understanding the importance of these things over time, making them much more hesitant to accepting fast and loose ideas from the customers. Since the added safety margins and longer development time added costs, company Y needed to increase their prices after a while. Over the years, company Y kept moving in terms of tradition and philosophy causing a drift in organizational culture as well. In the end, they valued strong engineering skills, low flexibility and strict adherence to requirements with some margin added on top. Company Y basically became what company X was.

6. Setting the mission of the organization

As a leader, you set, or at least shape, the mission in your organization. Be it for the whole company as a CEO or for your department or team as a functional leader or an informal leader in the shape of a group member.

Is the mission to improve quality because there have been recent problems? This sends a signal that quality is important, that your organization deals with its problems and care about the customers.

Do you pretend the recent quality problems aren’t really a concern? Might make people think that sweeping things under the rug is ok, that quality and customers aren’t that important after all.

The higher up you are in an organization, the more you can impact the mission, and in turn, the organizational culture.

After I became a more senior leader, i.e. more than 1000 employees or more than a $200 million in company size, I have pushed several larger missions. Some examples:

– Quality turn around campaign. Gathering company wide resources to address long lasting issues and through dialogue with customers finding ways to improve beyond that.

– Profitability improvement movements encompassing a wide array of individuals, offices and functions in order to find ways to increase the overall profit.

– Growth campaign focusing on substantial company growth in relatively short time.

– Temporary, as in 6-months, cost aversion and cost saving themes

These examples have all came from some sort of context of course. These “missions” have all sent signals on what matters, what is expected and what is important. This affects the organizational culture for sure. If nothing else, people who complete disagree with the importance of these missions are more like to leave, and the people who agree are more likely to stay – giving a secondary effect in terms of selection as mentioned previously.

Some of the bigger and longer lasting missions, such as the growth campaign, has also been visionary. I, together with the other senior leaders, created and communicated a vision of where we could be in the future, and what we could achieve as an organization. This too impacts organizational culture.

7. Cultural forms

Cultural forms could be specialized language, symbols, brands, sayings, punch lines, ceremonies, rites, forums etc.

At a company I worked for a couple of years ago, you had a Christmas party and you had a summer party. Period. If you were to cancel any of those to save money, you would almost see people revolting. This was part of the routine, the tradition and the culture in this organization.

I would like to bring up one cultural form that can have great impact and is strongly depending on you as a leader. That is the level of information available to the employees. I have seen negative cultures with a lot of silo thinking and people only minding their own business that have suddenly blossomed once regular information on overall progress was made available by the top leader. This could be as easy as a monthly meeting providing an overview of a few metrics and what the most urgent problems are now. It could also include a brief connection to the strategy and how the current actions are fitting into the long-term picture. This can have great impact since people feel important enough to be informed by the leadership, they see how they are part of something bigger than themselves, and they can ask questions or comment on things. Inclusion builds accountability in the long term, that is my experience.

8. Socialization

This is extra important for new members in your organization. How do you include new people? Do you have an on-boarding program? A booklet describing the history, legacy and purpose of your organization? Do you use coaches, mentors or sponsors for new people?

A new member will absolutely look around and watch what others are doing and they will learn what to do from those observations. Are people taking two hours lunches? Are people going the extra mile to resolve a customer concern? These attitudes all reflect the organizational culture and the socialization processes can affect how new members take in organizational culture and interpret it. If you communicate expectations, written and unwritten rules, policies, visions etc. clearly to new employees they are more likely to adopt those aspects of the organizational culture. If they have a new colleague acting as a guide who is there to answer questions etc. the adoption of the organizational culture can be even better.

Do you have people that are actively demoting the organization? Bitter employees can welcome new members by telling them how horrible everything is and showing them the ropes on how you can get away with underperformance the easiest way.

As a leader, you can adapt the socialization processes of your organization to maximize the impact on organizational culture in the best way.

Closing comments on how leaders affect organizational culture

The concept of organizational culture is complex and high impact. I have seen how detrimental toxic climates and toxic cultures can be for people and for company performance.

If people get stuck in a losing rut that they cannot get out of, they can even get depressed. They will stop believing in themselves and their future. They will start to lose confidence in the purpose of the organization. A bad, and defeatist organizational culture can become a self-fulfilling prophecy. If you can break this negative development, prove to people what they are capable of and build a path towards success, you will build their confidence as well as the organizational culture. Once this journey, that can take years, is completed, you will hardly be able to recognize the organization or the people any longer. That is what a huge difference organizational culture can make, and that is also why it is crucial for you as a leader to work on nudging it in the right direction.

References

https://www.nap.edu/read/5128/chapter/5#77

Creating and Maintaining Organizational Culture

Carl Lindberg

Carl is a global business leader that has led 1-2000 people and had financial responsibility of 200-500 MUSD. During his career, he has led employees in twenty different countries and has lived in three continents.

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