Why company culture starts with business leaders – not HR

Charlie Coode, Founder and CEO of Culture15 highlights why one of the most serious missteps company leaders can make is to prioritise productivity and profits over culture.

The shared values, behaviours and beliefs that define an organisation, its decisions and its interactions have more of an impact than CEOs think, with Gallup reporting that employees who feel connected to their organisation’s culture are 3.7 times as likely to be engaged at work, 5.2 times more likely to recommend the company to other candidates and 68% less likely to leave due to burnout. In other words, company culture is your ticket to a productive, profitable organisation.

Oftentimes, however, leaders leave culture in the hands of HR, with human resources teams being charged with finding band-aid solutions to existing, deep-rooted problems, rather than ensuring that company goals and culture are perfectly aligned from the outset. The root cause of struggle remains unresolved and, worse still, workers are unsure as to what company ethos actually entails.

Following the leader

It’s difficult for employees to embrace the values set out for them if they don’t see bosses, managers and executives leading by example. Deloitte’s latest chairman’s report has found that exceptional organisations have core beliefs that are unique, simple and, most importantly, leader-led, with an ethos that’s both repetitive and embedded in tangible actions. Nevertheless, only 15% of employees strongly believe that their culture is widely upheld by leadership teams within their own organisations.

It’s clear that something must therefore change, particularly as the same Deloitte survey has revealed a clear connection between employee happiness and a lived-in culture, proving, without a shadow of a doubt, that leaders must take cultural creation into their own hands, personally demonstrating the values they strive for. Indeed, 94% of executives and 88% of employees alike agree that a distinct, well-modelled workplace culture is key to success.

Take Google, for example. Rather than just telling employees to be sustainable, leaders have installed bee hives around their Mountain View headquarters in the US, encouraging employees to explore their unique, indoor/outdoor native biome at the tech firm’s Brazilian offices. Likewise, leaders in London encourage active participation and creativity through projects such as the community sticky-note art wall in Pancras Square, whilst managers in Tokyo and America demonstrate healthy living first hand by making use of the standing ramen bars and GBikes on offer.

It’s all about inspiring cultural commitment from the top, personally modelling the ethos and lifestyle that staff are encouraged to adopt.

Falling short of expectations

With so much at stake, its surprising then that Deloitte has found such a startling discrepancy between organisations simply talking about culture and those that are embedding their beliefs into operations. Only 67% of employees feel senior leadership communicates core values on a regular basis, with just 61% reporting a high level of consistency between the values held by management and their employees. This stands in stark contrast to the 81% of managers who feel senior leadership acts in accordance with the beliefs and values put forward.

Employees clearly need to see more tangible examples of value adoption as part of a top-down cultural strategy, with cases such as Uber and Wells Fargo serving to illustrate what happens when leaders themselves fail to participate in the culture they purport. Whilst the founder of the former taxi replacement company, who was forced to step down due to unethical behaviours, saw his own loose morals trickle down into the organisation’s borderline illegal behaviours, leaders at the latter financial firm gave way to a permanent damaged reputation, given that the high-pressure sales environment they created led to team members creating two million fake accounts.

Had these leaders acted more ethically, with greater compassion, putting employee wellbeing and social responsibility at the helm, such major controversies could have been easily avoided, without HR even needing to get involved.

The top-down imperative

CEOs and other C-suite executives hold the most significant sway over company direction. Without their active involvement in value creation and pursuit, company culture not only becomes lost but also becomes misaligned with broader organisational goals – potentially causing more damage than good.

Whilst HR is often about maintaining compliance, handling administration and smoothing over employee interactions, leaders can actively drive cultural evolution to meet changing demands – an agility that’s absolutely essential to business survival. Equally, whilst HR is limited to policies that might fail to permeate all levels and departments, leaders can implement a broader business strategy through a series of cultural and strategic initiatives that go hand in hand.

According to a recent study by Gallup, 70% of all variances in employee engagement are tied directly to the manager. So, it’s important for leaders at all levels to lead with a purpose, letting the people they manage know that they believe in the company and that staff can, too. They have to live by their values, remaining transparent wherever they can.

As we have seen, leadership actions create a ripple effect, trickling down and influencing every facet of the organisation. If leaders prioritise collaboration, innovation and a healthy work/life balance, for example, employees will follow suit. It’s a simple case of becoming a cultural role model, acting with authenticity and being willing to own up to mistakes, so that employees feel empowered to do the same. This will inevitably protect your business, fostering a modern workplace that embraces vulnerability and regards mistakes as opportunities for improvement rather than punishable failures.

This adaptability is key to business survival. Leaders who understand the pulse of change can steer their teams through all kinds of challenges, allowing the ideas of others to shine through as they foster a culture of resilience and enduring innovation.

The key to it all is good communication. Communication is the glue that holds your company together and, as the primary communicators, leaders must clearly articulate the company’s values, mission and vision. This must be done consistently, for ongoing trust and engagement, and a sense that everyone’s in this together, working towards a common goal. This will give you greater loyalty and commitment, bringing everyone on board with company ambitions by shaping a narrative of compelling vision and cohesive cultural identity.

Of course, companies that are able to tell this story convincingly will not only experience greater employee engagement, retention and satisfaction but will also benefit from better recruitment rates, too.

Building a stronger leadership culture

With so much at stake, organisations must prioritise value-led leadership at all levels. Indeed, global leadership development firm, the Arbringer Institute, has found that organisations that focus on mindset within their leadership development programmes are almost twice as likely to have employees who feel they’re doing meaningful work – a factor that’s bound to result in unrivalled value commitment and retention.

By analysing where your company culture is now, determining which values you need to prioritise for success and working out how leaders within all areas of the company can start modelling these behaviours, productivity, profits and performance will rise through the roof, without once losing the pulse of what’s truly important: the culture at the heart of everything you do.

 Author: Charlie Coode, Founder and CEO of Culture15