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3 Essential Facts Leaders Needs to Know About Corporate Culture

Posted by Roger Ryall

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Leadership is more than just telling someone else what to do. A leader sets the agenda. A leader is a provider, allocating the necessary resources their team needs. Most importantly, a leader is a role model embodying the values of the organization.

Leaders are tied to the culture of any organization they represent. This is why these three facts about corporate culture are so essential for team and organizational leaders.

1. Leaders are Responsible for the Culture

Leadership is the transmission of value standards. It’s these value standards that will shape the culture. And it’s the culture that determines the decisions that employees make when the CEO isn’t in the room. These decisions add up and will determine the long-term success of the organization.

Leaders are also the only ones able to revitalize a lagging culture as they are able to allocate the necessary resources for a culture shift.

2. Corporate Culture is Now Public

For organizations big and small, it can be easy to forget about fostering a healthy sustainable culture. Unlike other more material resources, it’s a hard thing to measure and see. The costs however are very real.

Social websites such as LinkedIn, Glassdoor, and Indeed makes a company’s employment brand public information. If your workforce is disengaged and doesn’t like the culture, others will know. Unfortunately for many companies, this is a fact that goes unheeded.

Employee retention, engagement, and culture are the top challenges facing business leaders today according to research conducted by Deloitte. Gallup’s latest research shows that only 31% of employees are engaged at work (51% are disengaged and 17.5% actively disengaged). Analysis of the Glassdoor database shows that the average employee gives their company a C+ (3.1 out of 5) when asked whether they would recommend their company to a friend.

Thanks to these social sites and social media, a toxic culture can now negatively impact a brand. In extreme cases it can even damage the reputation of an entire industry.

3. The Best Companies Have the Best Culture (According to Employees)

In the same way that a toxic culture can negatively impact retention and recruitment, a positive culture can attract talent and retain skilled employees. Fortune’ Best Companies has many of the same companies listed in Glassdoor’s Best Places to Work and also LinkedIn’s Most In-Demand Employers for example. Fortune and Glassdoor’s lists are based on employee surveys demonstrating that companies with strong positive cultures are now the most-in-demand.

Forbes contributor, Josh Bersin gives another example in this article,

“Younger companies that focus on culture see a huge payoff. HubSpot, a growing New England tech firm focused on its culture (around 1,000 employees), has Glassdoor ratings of 4.6, far above the industry average. They give their staff free books and education and believe so strongly in transparency that they post their board meeting notes and culture manifesto online”.

Leaders embody the culture they are a part of. They also help shape it. It’s a cycle that when its managed properly, it can lead to the success of not just a single team but contributes to the success of the entire organization.

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