How Does Leadership Influence Organizational Culture?

Organizational culture is a powerful driver of success. Yet it’s difficult to quantify and track, making it an intimidating but necessary challenge leaders must face.

How can you, as an organizational leader, shape a strong culture? Before exploring how, here’s a primer on organizational culture and why it matters.

What Is Organizational Culture, and Why Is It Important?

Organizational culture is the collection of values, beliefs, assumptions, and norms that guide activity and mindset in an organization.

Culture impacts every facet of a business, including:

• The way employees speak to each other
• The norms surrounding work-life balance
• The implied expectations when challenges arise
• How each employee feels about their work
• The permissibility of making mistakes
• How each team and department collaborate

Having a strong culture pays off financially: It can impact employees’ motivation, which, in turn, influences their work’s quality and efficiency, ability to reach goals, and retention rates. Having a culture that fosters innovation can also pay off in the form of new product ideas and creative solutions to problems.

It’s not possible to opt out of having an organizational culture—if you don’t put effort into crafting it, a negative one can emerge. If you’re an organizational leader—especially at a large company—you can’t directly speak to every employee, so you must influence culture from a high level.

Here are three ways you can influence organizational culture, the importance of effective communication, and how to build your skills.

How Do Leaders Influence Organizational Culture?

1. Ensuring Alignment on Mission, Purpose, and Vision

One way you can influence your organization’s culture is by ensuring everyone’s aligned on its mission, purpose, and vision.

Think of this communication as laying the foundation for culture. What customer need does your company fulfill? How does it make a positive impact? What’s its vision for the future, and what strategies are in place for getting there?

Additionally, ensure every employee understands how their daily work contributes to your organization’s success. According to a Salesforce report, more than 70 percent of U.S. employees say connecting to their company's culture and values motivates them to do their best work.

“Leading at scale and scope requires you to treat communication as a tool to reach out to people, captivate heads, and move hearts, so those you’re leading understand your actions and goals,” says Harvard Business School Professor Joshua Margolis in the online course Organizational Leadership. “And, perhaps more importantly, so they understand where they fit and why their work matters.”

2. Inspiring Confidence in the Face of Challenges

The way you react in times of tumult can powerfully impact culture. How do you pivot your company’s goals? Do you visibly panic, keep everything under wraps, or communicate with thoughtful transparency? Your reaction sets the tone for your team.

One example of a strong leader who crafted culture during crisis is explorer Ernest Shackleton. Shackleton’s original mission was to traverse Antarctica. But when his ship, the Endurance, was trapped and crushed by icebergs, it suddenly became irrelevant. The new mission was to get his team of 28 men home alive. One important part of doing so was managing the team’s culture.

“Critical to accomplishing his mission, he had to convince the crew that, individually and collectively, they can do it,” says HBS Professor Nancy Koehn in a sample business lesson on resilient leadership. “That they, under his leadership, are going to do that.”

Shackleton not only focused on increasing morale but on containing any doubts in the group. He asked the few men uncertain of success to sleep in his tent to influence their morale and keep them from spreading skepticism to the rest of the crew. His efforts paid off, and he led his team to safety.

Although not every challenge is a life-or-death situation like Shackleton’s, you can influence culture by letting your employees know their safety and well-being are a priority and that you’re confident in their ability to endure crises.

Related: How to Become a More Resilient Leader

3. Leveraging Mistakes as a Source of Learning

If you want to foster an innovative organizational culture, embracing and learning from mistakes is crucial.

“You can’t wave a wand, dictate to people that they need to be more creative, and wake up the next day to find people taking risks and trying new things,” says HBS Professor Anthony Mayo in Organizational Leadership.

If you chastise or punish employees for making mistakes, they’re far less likely to try new ideas. To unlock innovation’s potential, make it clear that experimentation is something to celebrate—regardless of its outcome. If an experiment fails, frame it as a chance to learn what worked and what didn’t.

If encouraging experimentation and failure feels too risky for your core business, designate a space or team specifically for testing innovative ideas.

The Importance of Communication in Shaping Organizational Culture

While each organization’s culture is unique, the common thread between strong ones is effective leadership communication.

When seeking alignment, inspiring confidence, and fostering innovation, how you choose to communicate determines whether your messages have their intended impacts.

In Organizational Leadership, Margolis and Mayo present five dimensions of communicating organizational direction, which you can use to shape culture, too:

1. Know your audience: Have a firm understanding of your audience’s perspective. What information do they already know? What questions or concerns do they have? What factors matter most to them?
2. Cater the content: Based on your audience, craft your message’s content to align with what they want and need to learn.
3. Align on purpose: Determine your communication’s purpose. Is it to inform, meant to solicit input, gain approval, or motivate your audience?
4. Design the process: Logistically, decide how you’ll deliver your message. Consider timing, frequency, channel, and who’s responsible.
5. Curate tone and style: Deliver the message with the appropriate tone and style using what Mayo and Margolis refer to as the “six C’s”:
   • Compassion: Do you show your audience you care about their perspectives?
   • Clarity: Do you communicate clearly to those unfamiliar with the message?
   • Conciseness: Is the message short enough to internalize?
   • Connection: Do you emotionally connect with your audience?
   • Conviction: Do you demonstrate your commitment to the good of your organization?
   • Courage: Do you demonstrate confidence in your ability to lead through uncertainty?

For example, consider how you might communicate mass layoffs to affected employees. How would your organizational culture be impacted if you sent a generic email to them rather than delivering the news face-to-face?

What about messaging the employees who aren’t being laid off? If you communicate the reasons for the decision and show empathy toward those impacted, you can build a culture of trust—which will be crucial to maintain with your remaining employees.

Every communication you deliver can shape organizational culture; it’s up to you to decide how to use it.

Building Your Leadership Skills

While shaping organizational culture can be challenging, all leaders face it. If you aim to build your leadership skills in this area, search for courses that include real-world examples.

In Organizational Leadership, you’re presented with real-world business cases—featuring leaders from companies including General Mills, McAfee, Medtronic, and Levi Strauss & Company—and prompted to consider how to handle each situation. Afterward, you discover how each leader approached challenges, gaining insights and perspectives you can apply to your organization.

By learning from others, communicating effectively, and making purposeful choices, you can leverage your leadership skills to shape organizational culture.

Are you interested in elevating your leadership skills? Explore Organizational Leadership—one of our online leadership and management courses—and learn how to communicate direction and lead at scale.