In the relentless pursuit of competitive advantage, organisations often chase the next ground breaking innovation or revolutionary strategy. But what if the most powerful driver of success is hiding in plain sight? Our research reiterates that culture, often overlooked and misunderstood, is equally important. Central to this is leadership. We explore the complex relationship between senior leaders and culture, and how their alignment can unlock the full potential of your organisation.
As highlighted in our whitepaper, 93 percent of survey respondents say company culture is important to a business’s overall success, with almost 57 percent saying they think it’s very important. Even more telling, a separate poll we conducted revealed that respondents believe culture has the most significant impact on overall company performance, even when compared with strategy and innovation. Yet, despite its critical importance, culture is often underestimated or misunderstood.
At the heart of this cultural equation lies leadership—the compass that guides and shapes organisational ethos. When leadership and culture align, they are capable of driving growth and resilience. But when misaligned, they can unravel even the most promising business prospects.
93% of survey respondents say company culture is important to a business’s overall success.
In this article, we explore the relationship between leadership and culture, looking at how their alignment enhances organisational efficiency, and how to bridge the gap when they don't.
Leadership and culture
While a company culture can influence the type of leadership it needs, the executive committee and board have the power to shape, redefine, and evolve a company’s culture. The vision set by senior leaders needs to be embodied in the culture, creating an environment where everyone across the organisation, from C-suite executives to entry-level employees, understands and works towards a shared objective.
However, challenges persist. According to a poll we ran, the biggest challenge in building and maintaining a strong company culture, as stated by 51% of respondents, is leadership alignment.
This highlights the critical role of business leaders in setting the cultural tone and embodying key characteristics that form the foundation of a thriving workplace.
51%
say the biggest challenge in building and maintaining a strong company culture is leadership alignment.
Decision-making and crisis management
How the executive committees and boards respond to crises and celebrate successes sets a precedent for the organisational culture, influencing whether the company fosters open dialogue, encourages calculated risk-taking, and if prioritises a healthy work-life balance. Essentially, employees often mirror the behaviours and values they observe in their senior leaders.
Shaping an inclusive culture
Executive committees and boards that actively promote diversity and inclusion often see notable performance improvements. For instance, a diverse management team, as highlighted in a Deloitte report, can lead to as much as a 19% increase in revenue.
A diverse executive team brings a wealth of viewpoints, leading to more comprehensive and impactful business solutions. An inclusive environment, guided by strong and visionary leaders, can create a workplace where every employee feels valued and empowered to contribute their best.
The role of emotional intelligence
As highlighted in this McKinsey report, survey respondents value human-centred aspects of leadership. A C-suite with emotional intelligence are better equipped to shape a constructive and collaborative workplace culture. Their ability to perceive employee needs, empathise with concerns, and manage conflicts effectively can lead to a transparent and trusting environment. This emotional understanding helps build higher levels of employee engagement and satisfaction, as team members feel more connected to their work and the organisation.
Bridging the leadership-culture gap
Our research reveals a disconnect between leadership actions and cultural values, with significant implications for workplace dynamics. Leadership was one of the top responses given by office workers surveyed when asked what they think needs the most improvement in terms of their organisation’s culture.
This misalignment can impact overall workplace culture, potentially stunting growth, hampering collaboration, and impeding the pursuit of excellence.
To address this gap, we propose three considerations for senior leaders:
01
Develop authentic leadership through self-awareness
Empower yourself by regularly assessing your alignment with the company’s cultural values. Implement 360-degree feedback systems and cultural alignment surveys to identify areas where your actions might not fully reflect the organisation’s stated values. Invest in leadership development, such as executive coaching focused on emotional intelligence and self-awareness to equip you to authentically embody and champion the desired culture. Additionally, conducting Executive Assessments that leverage insights from talent analytics and psychometrics can help create tailored development plans for nurturing leadership potential. This approach builds a cohesive and effective team, creating a powerful ripple effect that inspires others to follow.
02
Prioritise ‘culture add’ in talent acquisition
When building your leadership team, prioritise cultural alignment alongside skills and experience. Redesign your hiring process to explore a candidates’ leadership style, ability to collaborate, and commitment to your company’s values. This should include assessing final-round candidates to ensure they possess the right aptitude but also the right attitude and cultural alignment with your organisation’s vision. The goal is not to seek out individuals who mirror your own characteristics but to identify those who will enhance and complement your existing culture.
03
Create accountability for cultural alignment
While cultural alignment is important at all levels, C-suite leadership sets the tone. To ensure lasting impact, integrate specific, measurable cultural metrics into performance evaluations for leadership roles. These metrics should be directly tied to the company’s core values. By holding leaders accountable for cultural stewardship, you ensure a consistent and positive leadership influence throughout the organisation.
Navigating leadership transitions
Leadership transitions often expose the vulnerabilities of an organisation’s culture. During such transitions, the C-suite and board play a crucial role in ensuring the culture is adaptive and receptive to change. This is particularly vital during times of corporate activity such as M&A, where aligning cultures between merging entities is often critical for successful integration. In addition, during transformations, turnarounds, and in the rapidly changing VUCA world, leaders must be adept at spotting and seizing new opportunities and addressing emerging challenges to safeguard their organisation’s future.
To facilitate smooth transitions and reduce employee resistance, the executive committee and board must actively cultivate a culture that embraces flexibility and openness to change. Key strategies for managing culture during such transitions include maintaining open communication, actively engaging employees, and implementing robust change management initiatives.
Understanding the dynamic interplay between leadership and culture is a practical necessity for thriving in today's business world. At Redgrave, we're dedicated to supporting our clients identify and secure executive leaders who not only possess the requisite skills but also align seamlessly with and actively promote your organisation's core values. This commitment ensures that leadership transitions enhance, rather than disrupt, the cultural integrity and strategic objectives of the organisation.
Notes:
Research conducted by Censuswide, on behalf of Redgrave Search with a sample of 2015 Office workers in the UK including 1205 Gen Z and Millennial Office workers (18+) (Excluding sole traders) between 07.11.2023 – 13.11.2023. Censuswide abides by and employ members of the Market Research Society which is based on the ESOMAR principles.
