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Can a Leader Change Company Culture?

2016 Deloitte article cited that 9 out of 10 executives say that culture and engagement are either “important” or “very important”. Yet, only 12% of companies believe that they truly understand their culture. 

Culture is not just words on a wall or your screensaver. It represents the values that your organisation lives by. Your culture speaks for itself in the way that you make decisions and in which behaviours you reward. 

While employees influence the culture of an organisation, leaders have by far the greatest impact. Leaders directly affect the confidence of their employees in living the stated values, they need to walk the talk for it to be believable to their teams. In this article, I discuss the role of leaders in changing company culture and I highlight some key focus areas that could help make that change more effective.

In Good and Bad Times, Your Culture Should Set You Apart

You may remember the 90’s movie, Speed, starring Sandra Bullock and Keanu Reeves. They drive a bus full of passengers through traffic while diffusing a bomb. In the end, they save the day. 

As drivers of the bus, Sandra and Keanu remind me a lot of leaders of an organisation, steering the way through significant growth, transformation, economic downturns and upturns. It’s usually when things aren’t going well, when plans veer off course, that cracks in the company culture start to show. 

Leaders must be clear on what the company stands for as this will act as a compass through thick or thin. Your unique culture should set you apart from other organisations. Yes, consistency and clear communication will help drive your culture. It’s not enough to have the words, “teamwork” and “integrity” in your company values. How do you show these, not just tell it?

Leaders Have the Most Direct Impact on Company Culture

I’ve mentioned that leaders have a tremendous impact on company culture. Leaders set the direction and inspire people to be the best they can be. If a leader drives a culture of finger-pointing and apportioning blame it will lead to a workforce that doesn’t take risks. They’ll seek to cover their backs. 

Part of inspiring people is about helping employees feel connected. When employees feel connected, they are 373% more likely to have a strong sense of purpose and 747% more likely to be highly engaged while at work

Another role of a leader is to create a learning environment. Peter Senge, author of The Fifth Discipline and renowned for his work on learning organisations, defines a learning environment as one where employees continually expand their capacity to create desirable results. He notes that in this environment, “new ideas are nurtured” and “collective aspiration is set free”.

A leader in a learning environment is open to failure and mistakes, viewing this as learning opportunities for the business. In a learning environment, people are more likely to:

  • Take risks
  • Innovate and create
  • Be more open when things go wrong
  • Have a culture of feedback

A positive culture can be the driving force for innovation and creativity. People feel that it is okay to take a few risks because their jobs are not at risk if things go wrong. 

Positive Company Culture Drives Employee Engagement and Performance

Mission-driven companies set themselves up for success. 30% of them have higher levels of innovation while 40% have higher employee retention rates. You may ask what the impact is on performance. According to a Deloitte report, companies with a higher engaged workforce outperform their peers by a whopping 147% in earning per share.

These results are difficult to argue with. A positive culture correlates with high employee engagement. It follows that high engagement drives productivity and in turn, positively impacts the bottom line.

Another part of employee engagement is employee wellbeing. People should feel their best and your culture should reinforce a healthy lifestyle and create a sense of belonging.

This goes beyond providing gym memberships to your workforce. It is about trust and psychological safety by creating an environment where people trust their leaders and feel safe to have difficult conversations.

Patrick Lencioni’s model “The 5 Dysfunctions of a Team” is one that I like to reframe as a positive tool to support effective team culture. He highlights the five elements of Trust, Conflict, Commitment, Accountability and Results. Trust being at the bottom of the pyramid and the foundation of an effective team.

Can a leader change company culture fearless edge
The benefits of adopting the lessons from this model include the following:
  • Employees are more likely to be engaged and work productively
  • They are likely to address issues effectively rather than avoiding conflict altogether
  • These create a virtuous circle where employees are happy, customers are happy, sales increase, and profits increase

To find out more about Lencioni’s work, here’s his 2013 talk on Five Dysfunctions of a Team:

Top Tips for Changing Your Company Culture

If you are looking to change your company culture or maybe you’d like to improve it, here are some recommendations for you:

1. Work hard at building a culture of trust and psychological safety so that people can feel at ease with having those difficult yet crucial conversations with you and/or their colleagues.

2. Encourage open communication and honest dialogue. Feedback should be regular and should aim to build people up rather than tear them down. It should be part of the general language in the organisation. 

3. Embrace your vulnerability as a leader, admitting when you get it wrong and when you make mistakes. This gives your employees the confidence that they can admit when they are wrong too.

4. Create a learning environment where there’s a shared vision and your employees can learn, adapt quickly and have a healthy appetite for taking risks.

Taking these four steps constantly puts you well on the way to a brilliant company culture! If you were to do all four of those then I think you would have a brilliant culture as an organisation.

If you’d like to find out more about how I can help you develop further as a leader, get in touch on 07980 838945 or email me at gillian@fearlessedge.com. Also, our Heart-Centred Leaders Community is an opportunity to develop with like-minded leaders – find out more here.

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