Importance of Leadership in Changing Organizational Culture
Every employee plays a part in the process of changing organizational culture, but at the end of the day, leaders are the ones who can make or break it; the choices they make cause a ripple effect on employee recruitment, engagement, and performance that powerfully impacts a company’s performance.
In fact, according to CultureIQ data from the 2015 Top Company Cultures program, the greatest differentiator between the winners and the rest of the list applicants is employees’ confidence in senior leadership. By setting the mission of an organization and empowering employees to achieve that mission, leadership builds the foundation of company culture — and plays an important role in changing it when it needs to be changed.
It’s one thing to say it. It’s another thing to see it in action.
Recently, David Shanklin, Executive Coach and Head of Culture Strategy at CultureIQ, got together with Lisa O’Keefe, Senior Advisor of Talent and Engineering Culture at Pritzker Venture Capital to explore how leaders can effectively drive change within their company culture. Drawing from experience, research, and best practices, they discussed what role leaders play in changing organizational culture and why they need to focus on specific changes in order to have an impact.
Here’s what they uncovered:
Changing Organizational Culture Through Leadership
Culture is made up of three layers, represented here by an iceberg:
- Behaviors, systems, policies and processes surrounding the way things are done
- Ideals, goals, values, and aspirations set by leadership
- Underlying assumptions that guide behavior
When it comes to driving organizational change, leaders play a critical role in using their behavior by setting the tone for what’s acceptable within a company.
“The moment you found a company, culture comes into the conversation,” says O’Keefe. “In the early stages, you’re focusing on building a core team and taking what you value and applying that to your hiring strategies. As you grow from those early stages, leaders have a responsibility to help define, teach, live, measure, and reward the culture they want to build.”
As a business grows — especially in startups — it’s up to the founders and CEOs to show alignment between the company’s beliefs and the behaviors that the leadership team reinforces when changing corporate culture.
“The more leaders can share what a company values in its culture, the easier it’s going to be for the culture to become a reality and not just these random words uttered without meeting or random quotes on a wall,” says O’Keefe.
Leading organizational change also comes down to how you reward employees. For example, if you say you value teamwork but give bonuses for individual performance, what behavior are you really reinforcing? Or if you say you want to treat your team with respect and support innovation, but there’s a really long process for anyone to start something new, what message are you really sending?
Your leadership decides whether or not what your company believes, what it says, and what employees see align. And it’s up to leaders to implement different strategies that match the organizational culture change you’re trying to make.
For example, at CommonBond, the CEO believes in open communication and honest answers. While he could easily have announced an “open doors policy” and sat back to see if anyone took him up on it, he instead decided to act on that value. Every Friday, he sits down and holds an “Ask Me Anything” session where employees can ask questions and get feedback directly from the CEO. If open communication is an important goal within your organization, activities like this show that openness and sharing are more than mottos — they’re behaviors you lead with.
Changing Organizational Culture With Focus
According to the Harvard Business Review, more than 70% of transformation efforts fail. So, what’s a leader to do when the odds are against you? According to Shanklin, the answer is focus.
“As leaders, managers, and employees, we’ve got so many day-to-day responsibilities that it’s simply not realistic to try to change more than one or two behaviors at a time,” says Shanklin. “Focus is the first piece, and only then can you figure out which points of change will be the most beneficial for an organization.”
The image above represents an example of how CultureIQ focuses on a small number of themes based on the data from employee feedback. By digging deep into distinct focus areas, a company can truly focus on what behaviors, policies, and assumptions are at play and identify strategic ways to transform this trend.
“Leaders need to be really aware of when efforts in changing corporate culture are going awry or not shaping up to be what they want them to be,” says O’Keefe. “They need to be observant because they have the power to support necessary changes to get the culture back on track or make it better.”
For example, a common challenge amongst clients is communication. When we dig into the data, we might find that employees hoard information because it is their only opportunity to get recognized, or that there’s a strong perception that information should only be shared for strategic, political reasons. Using a framework like the image above, CultureIQ can guide you along the process of acknowledging the negative behaviors, understanding how they impact existing policies, and uncovering and correcting underlying assumptions.
Changing Organizational Culture Within Your Organization
Ready to take the reins of changing organizational culture? Embrace the opportunity, but not 100% full responsibility.
“Listening, empathy, transparency, and communicating are all important leadership traits, but leaders alone cannot change or fix a culture or make it perform at its highest potential,” says O’Keefe. “It’s incumbent on everyone within an organization, not just leaders and managers, to take responsibility for company culture and make it what they want.”
As a leader, it’s not your job to fix everything and get the accolades — it’s your job to be intentional about changing organizational culture and the behaviors you want to see and empower your team to live and participate in the culture as a group.