This is a very brief and simple look at what appears to me as one of the most complex and misunderstood ways businesses work (or don’t, in a lot of cases): the ways in which leadership affects culture. The benefits of good leadership and the downside of the bad leadership both can have a long, reverberating effect. Clearly we cannot adequately cover it by writing a few paragraphs on the internet, but this is a glimpse.

The power of decisions 

First, for purposes in business, I define culture as the (mostly unwritten) standards of a group that guide their decisions, expectations and behavior, while leadership is both the example of behavior in the group plus making decisions for others.¹This is a simple, starting definition. There is much more to both.

As an example decision, a leader decides when the work day starts, and culture would determine whether it’s the norm for an employee to be there hours before the stated time or regularly arrive later.²In my first post-college employment where the work day was to start at 9:00, almost everyone showed up for the day before 8:00 in one department, and in another department in the same building, same company, but different boss, most started working between 9:30 and 10:00.   So both the leader’s decision that defines the start of the day and the cultural norm of adherence to policy determine when people actually show up.

However, it is the leader’s behavior and response to others’ arrival time creates that cultural norm.  A leader decides not only the start time of the work day, but the response to compliance, and how people are treated around that policy.

So, a leader could make a policy in response to tardiness: forced overtime, limiting flex-time, and or personally treating people differently depending on adherence.  This clearly influences culture – if your manager decides that showing up to work 30 minutes late means you lose a week of vacation, the standard behavior would to not be late – at all.

But the cultural response is incredibly complex (and unpredictable): team members could then come in early to avoid the boss’s punishment, but spend the first hour looking at cat videos on Facebook.³There are an unlimited number of reasons why a policy or decision doesn’t have the intended effect, and often none of those reasons are about the decision itself.  See Leadership vs. Management.

The greater influence

Some claim that leadership and culture are a chicken-and-egg phenomenon – that it’s hard to determine “which comes first” in how a business functions.

Although culture and leadership have a slightly symbiotic relationship, and the influence between the two can at some times go both ways, it is clear to me that leadership is almost always the main influence on how culture develops.  It is a complex relationship full of nuance and ever-developing effects. In our example of official work hours vs. what actually happens (or cat videos vs. engagement), leadership choices and behavior affects culture much more just when the work day starts.

Simply, someone in a position of leadership has more choice, and that choice effects more people than if he or she were not a leader.  ⁴Although sometimes those choices might be difficult, undesirable, or imperfect, there’s always a choice.

Leadership drives culture, fundamentally because a leader’s choice influences how people act (or react).

So leadership drives culture, fundamentally because a leader’s choice influences how people act (or react). Although there are extreme exceptions to this (and those cases can be difficult to manage), a good leader – one who accepts responsibility of the role and wrestles with the complexity of the decisions – can and should shape a culture that would be beneficial to both the individuals and the business, while a bad leader (who shirks responsibility and does not consider the effects of a decision outside how it affects him or her) can rapidly assist the natural decay of a culture.

It is difficult but necessary

Yes – “good” leadership is difficult, but that does not absolve a leader to abdicate both responsibility and decision making. How a leader decides on an action is subtle and one decision is connected to virtually every other decision and cultural norm.

Actually, calling a leadership decisions difficult may be optimistic.  Sometimes it is a herculean task just to figure out what the least bad option is, never mind attempting to effectively put it into practice.⁵“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time . . . ’ Winston S Churchill, 11 November 1947

It is important to decide

A lack of leadership decision is a decision nonetheless, and the culture will react to the absence of leadership just as it responds to a clear voice. If you’re in a position of leadership, not addressing a problem may be more detrimental to the business than a less-than-perfect decision coupled action.

Complexity and responsibility make leadership decisions difficult – at least they should be difficult and not power moves for self-aggrandizement. Changing what was “always done that way” may be necessary and it’s important to understand that change is also fraught with risks:

• Complexity: changing one policy, making one decision or exception (that may well become the rule) affects almost all parts of the culture a leader can imagine, and more importantly, what he or she cannot.⁶Somewhat recently popularized (and ridiculed for) by Donald Rumsfeld, “unknown unknowns” was actually developed by two American psychologists in the 1950’s and used by NASA. “Known unknowns result from recognized but poorly understood phenomena. On the other hand, unknown unknowns are phenomena which cannot be expected because there has been no prior experience or theoretical basis for expecting the phenomena.”
• Responsibility: the leader will – whether he or she shoulders it voluntarily or not – be responsible for the negative or positive result of the decision, and this significance should weigh heavily on him or her.

Take limitations and capacity into account

Because leadership drives and shapes culture, a good leader should take the group and cultural norms into account when making decisions. A business culture is an organism and it can change only so fast before its survival is at risk.

But a leader needs to pave the way for improvement and pruning, and he or she is not beholden to culture exclusively – society would not progress if that were the case. Importantly, taking “everyone into account” is not the same thing as making everyone immediately happy, splitting the decision down the middle or alternating sides of who loses.

Groups can revolt, refuse the leadership they experience, or develop separately from their leader, but the decisions that reflect a leader’s goals and morals are the formative force in how an organization’s culture develops, for good or evil.⁷Leadership can affect culture positively or negatively, depending on the leader and depending on the circumstance. Hitler and his advisors set much of the tone of Germany in the 1930’s, Nelson Mandela did the same for South Africa in the 1990’s.

Many leaders – and this is most unfortunate – actually drive culture development with negative force or by decisions that they refuse to make. Whether it’s a micromanaging supervisor, a CEO who regularly displays emotional outbursts, or a group leader who won’t communicate clearly, the group develops a ritual that reflects and then anticipates the difficult or non-productive behavior.

The leader’s permutations of malevolent behavior or absence in times of need are as varied as humanity itself, and yet these effects are easily obvious to all of us. It’s what we gossip about, what we complain about, the subject of knowing looks, or, sometimes, a subtle sense of pride. This is really just a somewhat formal description of what we say to our friends about our boss, our workplace, the policies that don’t make sense, or sometimes, the real good that the business achieves.

What performance consequences or benefits come from your culture?