A company’s culture – its values, norms, and unwritten rules – has an enormous impact on its success. And that culture stems largely from the CEO, who sets the tone at the top and signals what is acceptable and prioritized. The CEO’s actions, decisions, and messaging filter down through the ranks and shape how employees approach their jobs. In this way, the CEO’s personal leadership style imprints on the company’s DNA.
The CEO Sets the Tone and Culture
As the top leader, the CEO sets the overall tone and defines the corporate culture. Employees look to the CEO to discern what is valued, how decisions are made, which people get ahead, and what behaviors are rewarded. If the CEO is ethical and customer-centric, that sends a message. If they are distant, reactive and political, the culture follows suit. The CEO essentially acts as a role model, and employees emulate those values through their own behaviors.
Leading by Example
The CEO must lead by example when it comes to corporate culture. They embody the ethos they want adopted company-wide. If the goal is an innovative culture, the CEO thinks creatively. If transparency matters, they communicate openly. Leading by example persuades employees to align behind the CEO’s vision. It also gives integrity to the CEO’s messaging – they “walk the talk.” Leaders demanding accountability or efficiency ring hollow if they themselves do not demonstrate those traits. But leading by example gives the CEO credibility.
Establishing Priorities and Focus Areas
A CEO shapes culture according to what they choose to focus on and prioritize. A CEO concerned about costs may fixate on metrics, analytics and productivity. One seeking innovation may emphasize creative thinking and reasonable risk-taking. Formal metrics and goals signal importance, but employee behaviors adapt day-to-day based on the CEO’s informal discussions, questions and interests. What the CEO measures and rewards attracts employee time and shapes activities. Over time, the whole organization orients itself around the CEO’s conscious and unconscious priorities.
Making Key Hiring Decisions
Talent choices also reflect the CEO’s values. Who they hire or promote into leadership roles has cascading effects on culture. An executive team chosen for solid execution propagates process rigor. One selected for creative thinking spurs innovation. Diverse leadership signals an inclusive culture is critical. The CEO’s hiring criteria indicate “success profiles” in the company. And those hand-picked by the CEO feel accountable to deliver on their cultural vision through their own divisions or functions. Thus hiring flows the CEO’s priorities throughout the business. Read more on Kirill Yurovskiy`s site.
Communicating the Vision
Culture forms in part from repeated messaging. CEOs therefore must consciously communicate and reinforce the desired vision and cultural attributes. Storytelling paints a picture of the aspirational culture so employees understand expectations. Town halls, memos and speeches emphasize key traits, behaviors or mindsets central to the culture the CEO seeks to imprint. Storytelling also provides compelling examples for emulation. Celebrating employees who represent the cultural ideal reinforces those values and characteristics. Repetition through diverse modes of communication ensures the CEO’s messaging permeates all levels and sticks over time.
Driving Innovation
The CEO’s ability to foster innovation largely stems from the culture they engender around creativity, risk-taking and out-of-box thinking. An innovative culture starts with the CEO’s own openness to explore new ideas without judging them prematurely. They must encourage experimentation by employees and avoid penalizing reasonable failures. The CEO can drive innovation through culture by directing a portion of resources to incubating new ideas. They can slot creative endeavors into schedules by design. And they can ask questions that spark unconventional thought – “why not?” rather than “why?” lastly, celebrating big ideas breeds an innovative culture, even where only a fraction succeed.
Promoting Certain Values
Every organization espouses values, but the CEO decides which values matter most. Integrity, transparency, sustainability and diversity hold growing weight among corporate priorities thanks to CEO leadership around company values. Values set the cultural character in terms of how employees treat others inside and outside the company. Values inspire higher standards of behavior when promoted sincerely by deed rather than just word. And adhering to strong values ultimately pays dividends reputationally and commercially. Employees – especially younger cohorts – increasingly seek meaning and purpose through their work, which successful values provide.
Empowering Employees
Delegating responsibility and authority is key for a CEO to scale impact. Employee empowerment shapes the all-important culture around trust – trust in employees’ skills, problem-solving abilities and good intent. Cultures of disempowerment breed dysfunction, suspicion, micromanagement and constraint. Empowerment by the CEO conveys trust in subordinates. It enables creativity over control, engagement over apathy. And it helps attract and retain top talent – especially younger generations and knowledge workers – drawn to autonomy. Empowerment’s risks pay rewards many times over through dispersed leadership that innovates on the edges.
Holding People Accountable
Empowerment without accountability, however, can breed complacency or worse. Part of imprinting successful cultural attributes involves upholding strong performance standards. A CEO sometimes must make high-profile decisions to dismiss those falling short of clear expectations. Following stated values and policies cannot appear optional. Accountability starts at the top with the CEO’s own modeling of transparency and responsibility. But ultimately all employees must believe there are consequences for poor performance or bad behaviors counter to the desired culture. Fairness and equity matter greatly in this regard. But used judiciously rather than punitively, cultural accountability elevates integrity.
Managing Crises
Crises present signature moments when employees look to top leadership for how to respond. Crises therefore shape cultures dramatically according to the CEO’s visibility, messaging, and demonstration of corporate values during times under duress. Employees discern if customer interests prevail over short-term profitability. They assess accountability and whether leadership accepts responsibility for failure. They observe investment in relationships through ongoing communications or standing behind employees as appropriate. The ultimate test of culture arises when it matters most – in difficult times. And employees judge leaders based significantly on their crisis leadership.
Planning for Succession or Transition
Founder-led companies face the inevitable leadership transition, often multiple times across the corporate lifespan. While armed with strong vision and high capability early on, founders do not always evolve leadership abilities at scale. And their personalities and approaches overly infuse company culture – for good or ill. Thus overseeing a successful succession process represents a critical cultural imprinting moment. It requires identifying and preparing successors well in advance and deliberately acculturating them to lead differently. Because leadership changes mean cultural shifts, which demand planning to retain the best cultural attributes.
Conclusion
A corporate culture emerges organically from employees across the company. But the CEO plays an outsized role in shaping values and behaviors through messaging, focus areas, talent decisions and their own example. Employees adapt based on these explicit and implicit cues over time. So while culture seems amorphous, in fact the CEO substantially molds company DNA and imprints upon it through conscious leadership. Great leadership means delivering strong business results. But legacy boils down just as much to the culture left behind that future generations build upon.