Updated: Mar 16, 2022
I've touched in recent posts on the concept of organizational culture, and I'd like to explore that a bit further. What is it, and what bearing does it have on leadership in the organization?
There are quite a lot of definitions of organzational culture, for example "a set of shared assumptions that guide behaviours," or "the values, beliefs and principles which influence the behaviour of people as members of the organization." These assumptions, values, beliefs, principles and behaviours become entrenched in the organization and are handed on to new members as they join. Soon, no one questions it; it's just "the way we do things around here."
The culture of the organization affects the way everyone, individually and collectively, relates to and interacts with other people and groups both within and beyond the organization. A particularly strong culture might affect the way members identify with the organization. It will influence not just the way people interact but it will also affect the way knowledge is created and shared (or not shared) as well as how resistant people are to change.
Organizational culture is shaped by factors including the organization's history, the industry, technology and market sector in which it operates, the culture of the nation in which it is based, and most of all by management style.
There, I used the "M" word. I've talked a lot about the differences between Management and Leadership, but I believe that they are intertwined: you can't have effective management without effective leadership, and vice versa. Leadership, therefore, is a major component of, and has huge influence over, the culture of the organization.
An organization that has a strong and healthy culture is likely to be successful; everyone will clearly understand the organization's culture, and there will be high levels of productivity, growth, efficiency and employee satisfaction. It's in your interests, as a leader and as a member of the organization, to do your best to contribute to establishing and maintaining such a culture.
Organizational culture comes from the top and begins with the organization's founders. The CEO and the Board of Directors establish "the way we do things around here," and from them it pervades the rest of the organization. If there's a toxic, bullying and abusive culture in the boardroom then it will soon infect the rest of the organization, too. Likewise if the boardroom culture is one of strong vision, acceptance, respect, pride in the organization, communication, investment in people, and confident leadership then that, too, will permeate the organization.
In my time I have seen how the arrival of a new CEO can bring swift and deep change to the organizational culture. I've seen depressed, struggling businesses turn around and become successful when the new CEO has a positive, enthusiastic and supportive approach. I've also seen thriving organizations destroyed by the arrival of a bullying, arrogant CEO.
I cannot overstate the importance of strong leadership in the development and maintenance of the organization's culture. If you want your organization to have a strong and healthy culture then as a leader in the organization you must actively contribute to creating it, strengthening it, and perpetuating it.