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How Leadership Affects Culture
It’s well-known that a positive organisational culture has many benefits: from improved productivity and creativity to greater retention, returns and growth.
However, with the unemployment rate in the U.S. at its lowest in almost 50 years, employees have more freedom to switch jobs if dissatisfied. And with only 1 in 3 U.S. workers saying they received recognition from their employer within the past seven days, it’s important to consider how leaders can achieve a better and more inclusive corporate culture that makes their employees want to stay. Because employees who don’t feel valued are twice more likely to leave their job within a year. This article considers how we understand organisational culture, why it’s important and how leadership affects culture.
Your organisational culture is created by the beliefs, actions and behaviours and values learnt by employees in your organisation. In his book “Organisational Culture and Leadership”, Edgar Schein defines this as “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that had 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”. It doesn’t happen on its own and it is directly influenced by how your employees act at work.
Often defining your company’s culture can be difficult as this is not something that is immediately obvious. Schein’s organisational culture model is designed to make culture more visible. According to him, this comprises 3 layers: basic underlying assumptions, espoused values (core values) and artifacts and symbols (for example, dress code, office layout or communication style). The latter layer is the easiest to change, while assumptions can be the most resistant to change, as sometimes you might not even be aware you hold them. Ultimately culture dictates organisational strategy, so from Schein’s perspective, it is essential that leaders look through the lens of how culture affects the company’s goals, current or future problems.
According to another model, Cameron and Quinn, there are types of organisational culture which are based on competing values: internal focus and integration or external focus and differentiation, as well as stability and control or flexibility and discretion:
Companies will often have a dominant culture but overall combine two or more of these cultures within it; sometimes different departments display different cultures to those of the entire organisation. Defining a company’s culture is complex since its implementation and change relies on all employees, but it’s essential to identify and understand it to bring about organisational culture development and thrive in today’s competitive environment.
Twitter, Nike and Edelman are all known for their good culture. And so is Adobe – a company founded in 1982, driving $4 billion in revenue and known for flagship products such as Photoshop and the Portable Document Format (PDF). Its culture is based on the company’s values of being genuine, exceptional, innovative and involved. The leadership provide great benefits and mentorship opportunities, encourage work-life balance, support involvement in the community and over 15,000 non-profit organisations, and even lead programmes such as “KickBox”: a red box filled with sugar, caffeine and a pre-paid card worth $1,000 for any employee to pursue their innovative ideas. Employees often share insights into this through the hashtag #AdobeLife.
It is obvious that culture matters and by embodying the values that organisations hold high, leaders have a role in shaping culture. In a PwC report, 86% of C-Suite executives believe culture is critical to their organisations’ success. In the same survey, 84% of all respondents thought culture was critically important, however less than half believed their companies do a good job of managing culture.
Time and time again, the ability of an organisation to adapt to change has proven to have one of the most significant impacts on an organisation’s performance. David Cummings, Co-founder of Pardot believes: “Corporate culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur. Develop a strong corporate culture first and foremost.”, while Simon Sinek believes “Customers will never love a company until the employees love it first.”
A company’s culture has been shown to be one of the top factors that employees take into consideration when looking for a new role. When it comes to establishing and reinforcing this, leaders will usually display the following behaviours:
Measuring corporate culture can be difficult, but it impacts so many areas in a business that you cannot overlook it. A good organisational culture is often associated with:
Don’t make defining your culture a one-time exercise – to maximise the benefits of your organisational culture. Consistently embody this and you will have a place where everyone feels included, valued and rewarded.
Interested in learning more about leadership and culture? Visit our Leadership section for articles and videos from Philip Hemme, co-founder & CEO of Labiotech.eu, clinical psychologist Bruce L Levine, Kathryn Petralia, Co-Founder of Kabbage, a fintech start-up valued at more than $1.2 billion, and Karen Blackett OBE, Chairwoman, MediaCom UK.
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