Culture is one of a leader’s greatest responsibilities


I once asked the founder of an FTSE-listed company about their company culture. “I am the culture,” came the response, which will be familiar to many entrepreneurs and those that work with them.

When there’s just you and two employees, it’s probably an accurate statement, but as the business grows, the culture inevitably develops a life of its own, beyond the personality and beliefs of the founder.

How your culture develops has deep consequences for the company’s future. People are your only source of long-term competitive advantage, but they will only bring the energy, ideas and collaborative spirit required for the business to grow and thrive if the culture allows and encourages them to do so.

Toxic cultures will spoil even the most talented collection of individuals, while teams that are ordinary on paper will flourish in the most effective cultures. Culture is business critical, and it is famously hard to get right.

Harvard Business School Professor Gary Pisano once described how almost everyone recognised the ingredients of innovative, high-growth cultures – the willingness to fail, the non-hierarchical nimbleness, the psychological safety to experiment – but precious few were able to bring that to life in their own companies.

The reason is that it’s exceptionally difficult for a leader to control culture – this is what people believe, not what the leader tells them to believe; it’s how they behave when the leader isn’t there – and even if you can control it, it requires a delicate balancing of often contradictory qualities.

Great cultures are tolerant of failure but not of mediocrity, psychologically safe but honest, experimental but disciplined, collaborative but rooted in personal accountability, flat but sustained by robust leadership.

They also, like a good reputation, take years to build and moments to demolish.

Faced with such a difficult but important task, it’s not surprising that almost all firms, as they grow, leave the FTSE founder’s view behind and bring in HR specialists to work specifically on strengthening their culture.

A great HR director can work wonders in this regard. They understand people, and they bring a professional approach to measuring and influencing beliefs and behaviours in the business, with the advantage at least initially of being outside of day-to-day operations.

Indeed, the best leaders will always rely on their HR team to help them construct the culture they want and need for the business to grow and prosper. But they will never hand it over entirely.

Culture isn’t something a leader can delegate, because it is intrinsically connected to leadership. Despite the limits of their ability to influence culture, the CEO still has far more ability to do so than anyone else, for good or for ill. Every decision the leader takes, every email they send or comment they make, sends a signal that reverberates through the organisation.

A great leader, therefore, needs to do all of these things consciously, in the knowledge that they have deeper, long-term consequences.

Was the FTSE founder right then? No, not exactly. A founder is not the culture – and the fact that this one thought they were revealed more than probably intended. But at least they were right to recognise that culture was ultimately their responsibility. It’s a lesson all of us could do with remembering, whether we run a small business or a big one.

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Growth and Leadership

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