Role of Leaders in changing Organization Culture

Last evening, I had an interesting and long conversation on Organization and Workforce culture with the CEO of a small and growing company in Atlanta. He wanted to understand from me the role he needs to play in changing his organization’s culture as he is looking to grow the company to the next level.

“What was the challenge you faced in your previous organization to tackle the problem of changing the organizational culture while transforming the business?”  He asked me the question expecting to get a silver bullet type answer. Below is the summary of our conversation:

Each employee impacts an organization’s culture and direction, but leadership has by far the biggest impact on a company’s culture. Every employee plays part in the process of changing the organizational culture but in the end, it is the Leader who can make or break it. In few cases, I personally observed that companies start very well by creating one of the best cultures in the organization and they thrive and show tremendous business growth and then as soon as a new leader or CEO from outside comes in, the set culture is destroyed and over time companies fade away. The organizations which can maintain their culture always promote the leaders from within. One of the attributes of good organizational culture is to build succession within – that requires the best hiring process, creating an environment of innovation, creativity, trust, and mentorship.

An organization's culture revolves around employee engagement, environment, business growth and success of its clients. Leadership affects the confidence of the employees, whether they see mistakes as opportunities for learning or failures. The leaders, who have no tolerance of mistakes and their employees always feel threatened, can’t even think of creating any organization culture. It is important to understand that employees make up what an organization is - and they have a great impact on organization culture. The questions leaders must constantly ask themselves “What experience am I creating for employees?” And, “Is it aligned with the culture I want in the organization?”

Leaders must consider the culture in three dimensions –

• What is seen: Behaviors, systems, processes and policies
• What is said: Ideas, goals, values, and aspiration
• What is believed: Underlying belief and assumptions

In small and mid-sized companies, the culture often stems from a key leader who sets the tone and pace. This key leader’s actions, modus operandi, and core values are observed and often repeated by others in the organization. For large and complex organizations, culture is defined by factors like HR policies, employee recognition – what behaviors are rewarded and what behaviors are not. Most importantly employee perception matters – Always they have this question in their mind - Will I be successful here?

It is often true that whenever growing mid-sized companies copy the policies and procedures of large companies – they end up creating complexities in their organizational culture and end up messing up their culture and hence growth.

In this digital age, almost all companies are being forced by their customers and competitors to change at a rapid pace. Companies need to quickly come up with different products and services to successfully compete. One of the pitfalls of social media is that companies now need to react quickly as consumers demand-driven economy can impact reputation by just click of a few buttons on their smartphones. Leaders who need to transform businesses usually first focus on technology to transform core business processes. Many a time the major success factor of transformation is overlooked – the impact on the company’s culture. Leaders need to really look at the attributes of company culture before embarking on the business transformation journey to the digital world.

Successful leaders always stay relevant – they respond to the speed of change needed in the digital world by giving ample focus on organization culture.