How Executive Actions Influence Corporate Culture: A Guide

Business leaders have a huge influence in shaping corporate culture. In fact, their influence often extends beyond their awareness, which can lead to unintended consequences if not managed carefully. 

When leaders struggle to build a strong culture, they must reflect on their behaviors and actions. They must ensure that their actions align with their words; otherwise, they risk losing credibility and trust among their teams.

If they fail to meet expectations, employees may become disillusioned and replicate those negative behaviors, creating a cycle of dissatisfaction within the organization. While many recognize how executive actions influence corporate culture, few fully grasp its impact and importance. 

In this post, I’ll examine the areas where executive actions have the greatest impact. I’ll also provide practical strategies for leaders to create and maintain a thriving workplace culture that aligns with their company’s goals and values.

 

What Is Corporate Culture and Why Is It Important?

Corporate culture refers to the shared values, beliefs, and practices that define an organization. It’s the unseen force that influences employee behavior, decisions, and relationships. Every organization has a culture, whether intentionally created or not.

Workplace culture affects all aspects of a business. It influences how employees talk to each other and handle work-life balance. It sets expectations for dealing with challenges and making mistakes. Additionally, it impacts how employees feel about their work and how teams collaborate.

There’s a risk of developing a company culture that drives away employees if executive leaders don’t actively shape it. This is especially true in large companies where leaders can’t directly interact with every employee. Instead, they must influence culture from the top down.

 

How Do Executives Influence Corporate Culture?

Here are five ways leaders impact company culture:

 

1️⃣ Ensuring Alignment on Mission, Purpose, and Vision

Leaders are the visionaries who chart the course for an organization. A strong vision acts as a guiding star for all actions and decisions within the company. For example, Steve Jobs exemplified this with Apple. 

His vision extended beyond innovative products; it focused on making technology a seamless part of life. This vision shaped every aspect of Apple’s culture, from product design to customer service.

A recent study indicates that over 70% of U.S. employees feel motivated to perform well when they connect with their company’s culture and values. Furthermore, companies whose employees understand their vision are twice as likely to be top performers. 

Therefore, your company vision must be clear, inspiring, and effectively communicated at all levels. For example, if you want to run an eco-friendly business, your vision should include specific goals like reducing waste, using sustainable materials, and promoting energy efficiency. 

Meanwhile, leaders should ensure that every department understands and aligns with these environmental commitments. When employees align with your vision, they find purpose in their work.

 

2️⃣ Modeling Behavior

Leaders act as living examples of the policies they promote. Their actions establish standards for acceptable behavior within the organization. Employees look to leaders for guidance, especially during times of change. If leaders want their teams to adopt new habits, they must be willing to change themselves.

Symbol management is a technique where leaders consciously engage in actions that reflect the culture they wish to build. These symbolic acts send strong messages to the team about expected behaviors. 

For instance, if a leader picks up trash in the parking lot, it shows a commitment to cleanliness and respect for shared spaces. Likewise, when leaders openly acknowledge their mistakes, it sets an example of accountability and encourages continuous improvement. 

A successful business mentor often shares this approach to foster a culture of learning and growth. Actively participating in brainstorming sessions demonstrates a commitment to collaboration and open dialogue.

 

3️⃣ Reinforcing a Culture of Accountability and Transparency

When leaders hold team members accountable, it reinforces the idea that everyone is responsible for their actions. Without accountability measures, a leader’s influence may be ineffective. Employees need to recognize that business practices, internal processes, and cultural elements exist for a reason.

To embed accountability into corporate culture, leaders should start with clear job descriptions. They should outline specific performance measures, such as increasing sales or improving customer satisfaction. If you need help writing a job description that avoids toxic phrases, you can explore the tools in this curated list by Attrock, which features the best content-writing tools you can leverage for this purpose. 

That said, the outlined performance measures should be refined annually with specific goals as part of performance improvement plans, ensuring that evaluations are based on agreed-upon criteria. 

Transparency builds trust, while accountability ensures integrity. When employees feel informed and valued, they become more engaged. Leaders like Warren Buffet exemplify transparent communication, particularly during crises. His annual letters to shareholders demonstrate the power of openness and accountability.

This means being honest about successes and failures and holding everyone, including themselves, responsible for their actions. Transparency should also extend to financial performance and business strategies, helping employees understand the broader context and their roles within it.

 

4️⃣ Leveraging Mistakes as a Source of Learning and Adaptability

Punishing employees for errors discourages them from trying new ideas. When an experiment fails, it should be viewed as a chance for continuous learning and skill building. To foster innovation, leaders should celebrate experimentation. 

If encouraging experimentation feels risky for core operations, leaders can create designated spaces or teams focused on testing new ideas. 

A notable example is IBM’s shift from a hardware company to a provider of cloud and cognitive solutions under Ginni Rometty’s authentic leadership. IBM invested in retraining its workforce in cloud computing and artificial intelligence roles.

Leaders should embed adaptability into the organization’s core values by encouraging proactive change and innovation. This could involve forming cross-functional teams to address complex issues or investing in training programs, such as those provided by online course platforms, to equip employees for future roles. 

 

5️⃣ Cultivating Team Engagement Through Emotional Intelligence

Connecting with employees emotionally improves culture and performance. Change can be challenging, and employees may resist unless they feel emotionally and rationally engaged.

Leaders should provide opportunities for skill development and create a work environment that benefits both employees and the organization. Authentic positivity should be embedded into company culture to help employees become more receptive to feedback. 

A prime example is Microsoft’s CEO, Satya Nadella. He shifted the company culture from a competitive one to a collaborative and emphatic one. This culture resulted in a significant boost in Microsoft’s stock prices.

 

Conclusion

Executive actions have a profound and lasting impact on corporate culture. By understanding the mechanisms through which they influence culture and employing strategic approaches to shape it, executive leaders can create environments that drive employee engagement, innovation, and, ultimately, business success.

As Peter Drucker wisely noted, “The best way to predict the future is to create it.” For executives, this means actively and consciously shaping the culture of their organizations every day through their actions.