The latest data from Heidrick and Struggles reveals that nearly 71% of CEOs consider culture a key element for driving a company’s financial performance. In recent times, CEOs are increasingly focusing on aligning culture with the bottom line.
CEOs are devising strategies to engage employees’ mindsets and finding ways to achieve business outcomes to propel financial performance. Company culture cannot be considered separate from business strategy. The two are inextricably linked and result in significant financial returns. There is enough data to support this. Read ahead to learn how CEOs integrate culture into workplace strategies to boost employee engagement and performance.
How do CEOs Drive Organizational Culture?
Investing in your employees is worthwhile. It creates a dynamic organization well-positioned to thrive in a rapidly evolving business environment. Building and maintaining a strong company culture enhances productivity, morale, and talent selection. Most leaders have understood the role of corporate culture and have already started taking advantage of opportunities to align culture with financial performance.
CEOs who dedicate themselves to shaping the culture and prioritizing its role in driving organizational financial performance are often referred to as “culture accelerators.” These leaders firmly believe in the symbiotic relationship between culture and strategy. Notably, a survey by Heidrick and Struggles reveals that these culture-centric CEOs consistently outperform their counterparts, achieving a higher Compound Annual Growth Rate (CAGR). Here are six strategies through which CEOs can actively shape and transform company culture to enhance overall performance:
Create a Pathway to Success
Leadership sets the tone for acceptable behavior and employee expectations. If the leader shows that mistakes are opportunities for success, it is reflected in the organization’s culture. It also helps if they cultivate a growth mindset and demonstrate the same through their actions.
CEOs who allow their employees to experiment and learn from their mistakes and experiences create pathways for success and opportunities for the workforce to prosper. They can create a culture that allows employees to be aligned and oriented in a unified direction to achieve the organizational vision and mission. Through their actions, leaders demonstrate to employees how important their contribution is toward achieving the organization’s goals.
Leadership behavior and style greatly impact a work environment. The autocratic leadership style no longer resonates with employees. Leaders demonstrating participative and empathetic styles are far more impactful in today’s corporate world. Their understanding and empathetic natures promote a great sense of belonging among employees and the capacity to build shared values.
The purposeful leadership style is responsible for showcasing to employees how much they are valued and appreciated for their participation.
Evolve with Global Changes
CEOs at large companies are expected to know in-depth how the organizational engine functions. They should have their finger on the pulse to use relevant knowledge and approaches to run this engine smoothly.
With the workplace demographic changing rapidly, a leader should be able to evolve with the changes and expectations. They should understand that employee engagement and experience are pivotal to organizational growth. Taking cognizance of the shifting expectations to shape company culture helps them keep the culture relevant.
CEOs can drive organizational success by understanding and catering to employee needs, fostering an ecosystem that promotes collaboration, and building processes that reflect company values. Moreover, the culture should welcome and succeed in the ever-changing work models.
Incorporate Agility into the Organizational DNA
CEOs play a pivotal role in cultivating a thriving workforce within an agile work environment, fostering continuous learning, and providing avenues for improvement. Here are key strategies for CEOs to instill an agile work culture:
Establish a clear and compelling vision.
Encourage problem-solving and decision-making.
Encourage open and transparent communication.
Demonstrate flexibility and adaptability.
Foster a collaborative work environment.
Offer continuous feedback.
For CEOs to lead culture change in the workplace, they should be able to align culture with success. CEOs should carefully craft company culture to ensure it drives the behaviors that make the organization successful.
Employees tend to follow the direction of their leaders. Without clearly communicating cultural goals, objectives, and priorities, and linking them to success drivers, there’s a risk of individuals relying on their assumptions and inventions to fill the void.
CEOs must maintain consistent communication with the team responsible for managing organizational culture. Active involvement, where CEOs contribute their insights and experiences to the process, is crucial to ensuring the effective implementation of cultural initiatives.
Participate Actively in Cultural Transformation
Recognizing the continuous evolution of your culture is a key aspect of effective culture management. This means embracing ongoing culture-change initiatives, even those that may be minor or imperceptible.
Your employees must see your active support for these efforts. As a CEO, maintaining a visible presence is essential. Have you considered regularly hosting “town hall” style gatherings with your staff? If not, it’s worth considering as a focused effort to enhance your organizational culture.
Implement Training and Development Programs
The implementation of effective training and development programs represents a crucial strategy for CEOs aiming to shape and transform company culture. These programs serve as a structured pathway for employees to acquire the skills, knowledge, and attitudes that align with the desired cultural attributes.
By integrating cultural values into training initiatives, CEOs ensure that employees not only understand the principles but also have the tools to incorporate them into their daily work. This might involve workshops, seminars, or online courses specifically designed to reinforce the importance of cultural elements, fostering a shared understanding throughout the organization.
How Does Corporate Culture Drive Financial Performance?
A survey by Gallup found that a strong corporate culture helps attract and retain top talent while aligning them with business goals. It also boosts the workforce’s performance and productivity.
Company culture stands as a cornerstone for fostering engagement. When the CEO actively cultivates a robust and inclusive culture, the organization not only thrives but also expands in today’s highly competitive business environment. A well-defined company culture not only enhances employee satisfaction, productivity, and morale but also plays a crucial role in mitigating employee turnover.
Research by Deloitte indicated that the companies that performed financially well had a solid corporate culture. These organizations were found to have a strong set of core managerial values that defined how an organization must work.
That being said, here are three ways company culture drives financial performance:
Employee Productivity and Satisfaction:
A positive company culture contributes to higher levels of employee satisfaction and engagement. When employees feel a strong sense of purpose, alignment with organizational values, and a supportive work environment, they are more likely to be motivated and committed.
This heightened motivation translates into increased productivity and efficiency. Happy and engaged employees tend to be more creative, collaborative, and willing to go the extra mile, which directly impacts the quality and quantity of their work. In turn, improved productivity positively influences the overall financial performance of the company.
Talent Attraction and Retention
An appealing company culture becomes a magnet for top talent. Organizations with a positive and inclusive culture tend to attract high-caliber professionals who are not only qualified but also culturally aligned with the company’s values. Retaining talent is equally crucial, as turnover can be costly. A strong company culture that prioritizes employee well-being, professional growth, and a positive work-life balance helps retain valuable employees.
The cost savings from reduced turnover and the enhanced productivity of a stable, engaged workforce contribute significantly to the company’s financial performance.
Adaptability and Innovation
A dynamic and adaptive company culture fosters innovation. In today’s rapidly changing business landscape, companies need to be agile and innovative to stay competitive. A culture that encourages creativity, risk-taking, and continuous learning enables employees to adapt to new challenges and contribute innovative ideas. This adaptability is essential for staying ahead of the curve and responding effectively to market changes. Ultimately, the ability to innovate and adapt contributes significantly to a company’s sustained financial success.
A robust and purposeful culture is a competitive advantage. However, building company culture is a long and tedious process. The values possessed by a CEO are reflected in the organization’s culture. Hence, CEOs must understand their role as a culture accelerator. They should strive to build and maintain a strong company culture.
Engagedly offers an all-in-one platform that helps organizations streamline their HR practices, internal communication, and goal-setting, and create a resilient company culture. It is a cloud-based software that aims to boost transparency, accelerate operational efficiency, and promote internal communication. Book a personalized DEMO to learn more about Engagedly.
Frequently Asked Questions
What does the term ‘CEO syndrome’ mean?
CEO syndrome is the workplace phenomenon when the leader or CEO refuses to listen to their employees. CEO syndrome occurs when a leader’s externally inflated ego does not let them accept suggestions and opinions from their employees. It leads to reduced internal communication in the organization.
How does automating HR processes and functions improve company culture?
Automation of HR functions improves employee engagement and performance management, promotes transparency, and creates clear roles for employees. This makes businesses efficient and gives HR personnel time to leverage employee skills to improve the workplace.
What is the authoritarian style of leadership?
The authoritarian leadership style refers to the management style wherein leaders assert absolute control over their subordinates. There is no two-way communication between the leader and the employees. Hence, the leadership style promotes a feeling of mistrust and a low level of workplace engagement.
Srikant Chellappa is the Co-Founder and CEO at Engagedly and is a passionate entrepreneur and people leader. He is an author, producer/director of 6 feature films, a music album with his band Manchester Underground, and is the host of The People Strategy Leaders Podcast. He is currently working on his next book, Ikigai at the Workplace, which is slated for release in the fall of 2023.