Is The Culture You Have The One You Need?

Culture is top of mind as CEOs take decisions about talent retention, return-to-office, and equity (among others.) Major disruptions—with which we are all painfully familiar right now—highlight the impact of culture on a company’s success or failure.

And it’s not just about people. Culture impacts staff and customer behavior. The actions and behaviors of individuals and particularly, company leaders, reflect directly on the organization’s image and reputation. Together, these affect financial performance and company value—both negatively and positively. In fact, James L. Heskett estimates that culture can account for up to half of the differential in corporate performance among like companies.

Navigating through big change—in the external or internal environment—is precisely the time to consider culture.

CEOs shape company culture by their decisions and actions.

Not long ago, while discussing strategy with a new CEO (hired from outside the organization), they told me: “I don’t want to change the culture.” My reply: “You already have.” A new person sitting in the CEO’s seat shifts culture. In my experience, denying this reality impedes progress, even with the best of intentions.

Separately, a CHRO described a culture of continuous improvement. While seemingly helpful, the result she described is a never-ending quest for perfection that stifles growth and change. These days, CEOs cite culture among their reasons for taking a return-to-office decision. As in: “We’re an office culture.”

Simply by joining the organization, the new CEO changed the culture. Tracking metrics that perpetuated the myth of perfection slowed progress, even as the CEO set goals to accelerate performance. An “office culture” has little meaning in a virtual, work-from-anywhere world.

Every organization has an inherent culture—a fundamental predisposition that exists with or without the CEO’s direct intervention. Still, CEOs shape company culture by their decisions and actions. Failure to define (or clarify) explicitly the desired cultural norms typically results in a slew of unwritten rules that can impede productivity. It’s up to the CEO to nurture the culture that makes it easier to achieve objectives.

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