In an organisation, culture typically begins at the top and permeates throughout, creating a shared system where everyone is engaged. It is integrated into everything from talent selection and professional development to stakeholder interaction and organisational behaviour.
Then, it is communicated and reinforced through action, thus shaping employee perceptions, behaviours and understanding and empowering them to deliver on its mission.
Given that an organisation’s culture consists of shared beliefs and values established by its leaders, it should be no surprise that leaders have, by far, the most significant and direct impact on culture.
Shaping a culture can be an exciting venture pursued only by the boldest and most steadfast leaders.
That being said, if you are a leader, you will have to decide if you have what it takes to see it through.
The importance of good organisational culture
We see good culture as a cornerstone of great organisations because it is highly influential upon employee well-being, directly impacting how employees perform and engage at work, and can be a source of durable competitive advantage, agility, and adaptability.
Many of our portfolio company founders have cited their company’s culture as a key success factor and have prioritised its development as their businesses grow.
True top-down cultural transformation involves both behavioural and mindset shifts throughout an organisation. This requires a clear vision to unify the team, and leaders must then lead by example to create and reinforce the organisational culture.
A good example is Jeffrey Tiong, the CEO of PatSnap– an enterprise SaaS unicorn and a leading provider of innovation intelligence for IP and R&D.
He had his ideal company culture in mind since the company’s founding, and as the company grew to over 1,000 people globally, one of the first things he did was sit down with his management team to create their six company values.
The next step was to incorporate these values throughout the business and ensure that all employees were aligned.
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“Culture is what connects companies, especially global ones. I wanted to create a company where culture was more than just a word. It was a feeling. I’m extremely proud of the culture we’ve created. You can feel people’s commitment, excitement and resilience in every meeting, product release, email and office,” says Tiong.
How personal character reflects leadership style
Outstanding leaders establish high ethical and performance standards, and their work behaviour and communication and management styles play a significant role in shaping a company’s culture.
True leaders guide, encourage, mentor, empower and inspire others. As such, a founder’s character and values can significantly influence our decision as venture capitalists to invest (or otherwise).
We look for key leadership qualities, including integrity, domain expertise, care, and drive. These factors are critical when leading change.
In 2013, we met one of the founders of a little-known Malaysian ride-hailing startup. We observed his calm, empathetic interactions with others – including his mother – and decided to invest in the company. That co-founder was Grab’s CEO, Anthony Tan.
Over the years, Grab’s workplace culture has evolved around the 4Hs of heart, honour, humility and hunger– a reflection of the values of both Anthony and his Grab co-founder, Tan Hooi Ling. Today, Grab is Southeast Asia’s first decacorn and a leading regional super app, and it continues to exemplify these values first embodied by its founders in its culture.
Earning the mandate to lead through mutual trust and communication
Successful leaders earn trust and the mandate to lead by setting the example. They trust their team members, treat them with due respect and work hard to create a meritocratic, familial environment that recognises all contributions yet leaves no one behind.
Leadership also inspires confidence. It can influence how employees perceive mistakes – whether these are deemed learning opportunities or simply abject failures.
People who are passionate about their work want the opportunity to demonstrate their capabilities, and true leaders care deeply about the professional growth of their team – individually and collectively.
One of the first things leaders must consider is if the right team is in place to carry out their mission. Poor habits are difficult to change, and highly negative individuals can be a challenge to transform.
It takes years of work to build a consistent team with shared values that deeply believe in the organisation’s vision and mission. The burden of command often includes deciding who and what to retain in preserving or changing an organisation’s culture.
Open communication within the company is key to a healthy organisational culture, and teams will take their cues from their heads. Leaders can encourage employees to speak up for what they need, adopt an open-door policy and be receptive to feedback.
This helps them ensure that work policies meet employee needs and nip issues in the bud early, preserving a transparent and supportive environment.
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Prajit Nanu, Co-Founder and CEO of fintech unicorn Nium, realised that not all employees communicated the same way, so he made himself accessible and proactively reached out to them to glean a more nuanced view of employee satisfaction.
“These are the guys who will drive the truck with you, so they should know what you’re building and feel connected to you. Keep them as close as possible – there is no more important thing for you to do,” Nanu says.
Culture as a competitive advantage
Leaders don’t just lead – they also serve. A leader’s responsibility is to ensure that their teams are thriving in the workplace, which requires them to lay the foundations by building a good organisational culture.
This is a perennial and non-trivial undertaking. Striking that fine balance of work and play, discipline and dynamism, is a fine art that leaders must master in this ever-changing world.
Trust, respect and open communication are critical for this endeavour to succeed. If done well, a positive organisational culture could be the competitive advantage and north star that will guide the business in good and challenging times, positioning it for enduring success.
This could well be their leap from good to great for some companies.
This article first appeared on Vertex Holdings’ Newsroom.
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The post Why leaders matter for a strong organisational culture appeared first on e27.
