The Link Between Corporate Culture and Economic Success

It seems to me that some organizations look at culture as though it is something ‘out there’, floating around in the passageways, something that has a life of its own; something that can be measured with culture surveys.

I define culture as, ‘the way things are done around here.’ Think about an organization. It does not have a culture when it starts up.  And yet after a period of time, a culture begins to take shape and soon people know that ‘this is the way things are done around here’.  And the more they continue to behave in the way things are done around here, the stronger the culture becomes. And the stronger the culture becomes, the more things are done that way -and the less likely it is that anyone would think of behaving in a different way.  This is culture!

The Challenges of Corporate Culture

Culture is just a mirror image of the collective behaviors of the organization’s leaders.  It is the product of how the majority of leaders and managers in the company behave and communicate.  Employees watch their leaders and believe that, ‘If I line up with the behaviors displayed by our leaders, I will get rewarded and promoted.’

This definition places corporate culture squarely at the door of the organizational leaders who are responsible for demonstrating the kind of behaviors that would create the kind of culture that will result in economic success for the company.  Essentially the way the leaders behave and communicate will either create a culture that energizes employees and inspires them to offer superior performance, or a culture that shuts people down – a spirited energetic culture or a dis-spirited lethargic culture.  This means that the level of productivity delivered by the employees is directly linked to how leadership behaves and communicates.

Too often I see that leadership recruitment, development, rewards and succession planning are implemented without asking one hugely important question:  ‘Will this person’s behavior and communication style build a corporate culture which will enable talented people to flourish and deliver extraordinary performance?’  If the answer is, ‘No’, then do not recruit or promote this person. No matter how experienced the leader or manager is, how remarkable their resume is, if  they are not capable of the behavior and communication skills that will build the kind of culture that the company is reaching for, then there is a dysfunctional disconnect.

Some Common Mistakes

How often have you seen this?  The assessment tools being used in the recruitment process indicate that this person has a leadership style that is contrary to the culture. Yet they are hired for all the wrong reasons – he would be a great coup for the organization, he knows all the right people in the industry, he is well connected.’

Or what about this scenario?   Leadership has a tendency to behave and communicate in ways that cause the employees to feel undervalued, angry or afraid.  The energy of the employees plummets and they do not perform well.  So guess what?  The leaders escalate their negative behavior, becoming even more judgmental and focusing even more on the employees’ weaknesses; morale in the company gets worse, and performance declines even further.  Then the leaders hire a consultant to assess what is wrong with the culture!  ‘Why is this company not performing?  How can we change the culture?

Leaders who understand the leadership-culture-performance chain ask themselves six critical questions – and act effectively on the answers:

Four Core Leadership Behaviors

What four core leadership behaviors do we want to build into the DNA of this organization? (I highly recommend starting with four core behaviors because it is too difficult to successfully integrate too many behaviors into the fabric of the organization at one time).

  • Are we, as the leaders of this organization, skillfully demonstrating these core behaviors?
    Does the way we communicate build a positive culture?  What are the strengths and weaknesses of the leadership communication style prevalent in this company?
  • Do we have the right leadership and management development programs?  Do these programs measurably strengthen our ability to demonstrate the core behavior and communicate skills we have identified for our culture?
  • Are the leadership and management incentives and rewards aligned with the ideal behavior and communication skills?
  • Do we formally and consciously recruit and promote individuals that will strengthen our culture?

A cohesive and aligned leadership team is a powerful force in creating a culture that produces exceptional results. It is important to keep in mind that culture change occurs in direct proportion to the new ways behaviors displayed and language used by the leaders.  This gives the rest of the organization ‘permission’ to do the same.  And thus a new culture develops.


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