An Examination of the Importance of Leadership Behaviors and Attributes on Shaping Culture
Organizational culture is the one thing that influences everything in a business; however, shaping organizational culture is challenging. An organization's culture is identified as the critical factor in financially successful companies (Craig, 2018). Modern organizations are facing challenges with innovation, social justice, dispersed workforce, and data-driven decision-making. It is necessary to make changes to organizational culture to thrive in a volatile, uncertain, complex, and ambiguous marketplace. Leaders at all levels in the organization play a vital role in the success of architecting organizational culture in business. It is crucial for leaders to be able to act both within and upon the organization's culture. Although changing culture is challenging, making changes often don't require considerable investments or physically co-located employees. Based on research, generally, the more dynamic transformational leadership behaviors and attributes are most effective (Sosik & Jung, 2018). Idealized influence and inspirational motivation are key leadership attributes and behaviors for leaders to apply to architecting organizational culture. These behaviors and attributes enhance the leader-follower relationship, trust, and emotional connection. Additionally, these behaviors increase the willingness of followers to excel and give discretionary effort toward making the organization and the world better. The benefits of improving organizational culture extend beyond performance and financial success to include employee morale, commitment, health, productivity, and well-being.
HOW TO READ THIS WHITE PAPER
This white paper is divided into five sections. Each section is essential to understanding the importance of key leadership behaviors and attributes in shaping organizational culture. Sections one and two of the white paper provide a contextual understanding of what is meant by organizational culture and modern organizational culture challenges. Section three focuses on proven approaches to architect organizational culture. Section four looks at two key leadership behaviors and attributes vital to shaping culture. The white paper concludes by highlighting the significant benefits associated with improving organizational culture.
This white paper aims to establish the importance of leadership behaviors and attributes and guide business considerations for architecting organizational culture. As designed, the insights covered will improve our communities and workplaces by applying proven thought leadership.
Understanding Organizational Culture
Organizational culture is the one thing that influences every aspect of a business. It directly impacts organizational success, employees, customers, and communities. The underlying cultural values of an organization affect the behaviors of employees and their decisions. Scholarly research directly linked the effects of an organization's culture on customer satisfaction, employee teamwork, cohesion, employee involvement, and innovation (Gregory et al., 2009). Just as some organizational culture characteristics can support these qualities, others can also inhibit these qualities. For example, a hierarchical corporate culture type is proven to decrease an organization's ability to innovate (Cameron & Quinn, 2011).
The idea of organizational culture is abstract and often not well understood. The word culture gets used in different ways by people at different times. Culture has been studied for many years resulting in many different models and definitions. Organizational culture is complex because it involves individuals, their interactions, teams, and the organization. Edgar Schein, who is considered to be one of the most influential contemporary thought leaders on organizational culture, described it as:
"a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems" (Schein & Schein, 2016).
A more simplified working definition of organizational culture is how things get done within the organization when no one is watching. It is easy to focus on the things that are visible to describe an organization's culture. However, an organizational culture framework consists of artifacts, values, and underlying assumptions.
Artifacts: Are the things you can see, feel, or hear in the workplace. Examples include what is displayed, office layouts, uniforms, identification badges, and discussed and not discussed.
Espoused Values: What you are told and beliefs that you can use to make decisions. Examples include a company's vision and values or mission statement. They are explicitly stated official philosophies about the company.
Basic Assumptions: Are things that go without saying or are taken for granted. Examples could include speaking up in meetings, holding a door for someone, smiling, or greeting someone by name when walking down the hall.
Often many elements of an organization's culture are not visible daily and drop into the background. However, significant events like a company merger or acquisition can make organizational culture differences noticeable.
The Organizational Culture Reality
No organization is looking to stay the same year over year. The world needs organizations that desire to create a better future. According to the Business Roundtable, made up of the CEOs of 181 largest corporations, the principal purpose of a corporation is no longer only to maximize shareholder return (Business Roundtable, 2021). The purpose includes creating value for customers, investing in employees, dealing fairly with suppliers, and supporting the communities where corporations operate. Modern leaders are asking, can organizational culture can be changed? This question is not just about changing but thriving in a volatile, uncertain, complex, and ambiguous marketplace. Today’s organizational culture reality includes challenges with:
Data-driven decision making
A dispersed workforce
Data-Driven Decision Making
Advances in technology create a significant advantage for organizations that can leverage data to make better decisions and take the right actions. To maximize their technology and talent investments, organizations need a culture that aligns with data-driven decision-making (Bartlett, 2013). This represents a sizable shift for many cultures that rely on stories to make decisions. A study involving more than 1000 executive leaders demonstrated that 80% of organizations with a mature approach to data analytics exceeded their goals, and 48% significantly exceeded their goals (Deloitte, 2019).
Modern organizations need to foster a culture that is shared across geographically dispersed and physically present workers. Hybrid models of remote and physically present workplaces for knowledge workers are projected to persist. According to a study of 2000 tasks, 800 jobs across nine countries project that 20 percent of an organization’s workforce could be remote three to five days a week (Lund et al., 2020). This represents an increase of three to four times as many employees working remotely. These changes are fueled by the workforce, advances in technology, and the pandemic.
Organizational cultures need to cultivate innovation. A global survey of over 5000 CEOs revealed that greater than 60 percent of organizations anticipate introducing new products or services to fuel their growth. A quick walk through a parking lot looking at the similarity of cars reveals a need for organizations to move beyond making incremental improvements. Company cultures centered on efficiency thinking have flooded the marketplace with low-cost, widely available products and resulted in tremendous waste and social issues (Brown, 2009). The future for organizations involves changing the organization's culture to create value for both the individual consumer and society.
The world is full of complex problems like cybersecurity and global political uncertainty. Still, the topic of social justice is in discussions from the boardroom to the breakroom. Organizational cultures need to value diversity, equity, and inclusion. As companies continue to expand into new markets, the makeup of the workforce in our companies and communities served is becoming more diverse. The United States is more diverse today than at any time since data has been collected, and projections are for continued increases in diversity (Vespa et al., 2020). However, organizations face serious cultural challenges, including broadly held perceptions of inequity to explicit illegal business practices based on race, sex, language, and other diversity factors. Inequity and discrimination result from failure, one person at a time, one action at a time (Greenleaf, 2008). These ethical failures are often not the result of one "bad actor" alone, but systemic culture issues.
Architecting Organizational Culture
Leaders at all levels in the organization play a vital role in the success of shaping organizational culture in business. Although architecting organizational culture is challenging, making changes often doesn't require considerable investments or physically co-located employees. Leaders can leverage the following primary and secondary actions and tools for leaders to embed the desired culture (Schein & Schein, 2016):
Primary Actions and Tools
Pay attention to metrics that matter and provide regular updates
Respond to organizational crises
Training and development
Rewards and recognition