The World’s #1 Executive Coaching and Business Coaching Blog (2017-2021)
How and Why CEOs Are So Powerful at Influencing Company Culture
One of the most important – if not the most important – things CEOs do is shape and reinforce corporate culture.
The words, and more importantly the actions of the CEO affect every aspect of corporate culture.
The shaping of corporate culture is something every CEO must “own” and must pay attention to every day. CEOs do this through their words, but more importantly through their behavior. How a CEO behaves demonstrates what he or she believes about company culture. When actions and words match up, the workforce is more likely to fulfill its potential and the company is more likely to reach its goals.
When there is a mismatch, however, major problems can follow. Shaping corporate culture and practicing the values of that culture consistently are two of the most important things a CEO can do.
Ways in Which CEOs Influence Corporate Culture
Culture is based on a set of ideals, beliefs, and values, and when they are demonstrated day in and day out, the culture grows stronger. Here are a few of the most important ways that CEOs influence the culture of the workplace.
- They set the tone for creativity and innovation. CEOs encourage innovation by not only listening to great ideas but also shifting resources to bring the best of them to fruition.
- They demonstrate how communication is used. Promoting open communication within and between teams requires trusting employees and giving them the tools that they need to communicate easily.
- They influence brand values and brand enthusiasm. A CEO who is unenthused about the brand will create a lackluster, indifferent culture. Enthusiastic CEOs build enthusiastic teams.
- They manage expectations. CEOs who invest in employee skills and development show that employees can be excited about the possibilities and confident about growth.
Practices for Embedding Responsibility and Ethical Behaviors into Culture
Corporate culture is often thought of as “how we do things,” and how the CEO does things carries a lot of weight. Instilling cultural values begins with defining and articulating them, often through a company code of conduct.
But simply having a code of conduct isn’t enough. It must be communicated and discussed throughout the company, as part of new employee onboarding, and at regular intervals. It’s all too easy to forget about company values when they’re communicated once and never revisited.
It’s not enough to give new employees a copy of the code of conduct and then never mention it again.
Perhaps most importantly, the CEO and all executive leaders must behave in accordance with communicated company values. And they must hold themselves to account, regularly surveying employees on how leadership is perceived to uphold company values.
Finally, CEOs must spell out and carry out consequences for when someone violates the code of conduct or otherwise behaves unethically. If employees see top brass breaking rules with no consequences, they have less reason value company culture. Furthermore, if they see leaders getting away with bad behavior, they’re less likely to add discretionary effort to their day-to-day work. Ultimate results can include slower growth, higher employee turnover, and bad morale.
Microsoft CEO Satya Nadella and Corporate Culture Change
One clear example of the CEO’s effect on corporate culture is the tenure of Microsoft CEO Satya Nadella, who became Microsoft CEO in 2014. Nadella is a very different type of leader than his predecessor Steve Ballmer, and it shows in everything from product announcements to collaborations to employee evaluation processes.
Nadella has made missteps (including bad form when addressing Microsoft’s 7,500 women engineers), but he has owned them and tried to learn from them. His commitment to changing Microsoft from within (since he was appointed from inside) has delivered impressive results, both in terms of culture and in terms of earnings.
CEO coaching may not be specifically about helping CEOs create a stronger culture, though sometimes it is. But CEO coaching, when done well, indirectly benefits the corporate culture due to stronger leadership. The CEO who has practiced and mastered leadership skills through CEO coaching is one who is more keenly aware of the CEO’s place in shaping corporate culture. And that awareness is fundamental to “walking the talk” of strong corporate culture every day.