CEOs have a deep impact on their corporate culture, even if they aren’t conscious of it all the time.
According to Ginni Rometty, CEO of IBM, “Culture is your company’s number one asset.”
And there is no better person to implement the desired culture of the company than the CEO, because the company mirrors the CEOs actions and behavior.
Culture is formed by the CEO in the beginning of the company’s life, whether this is intentional or not.
For example, if the CEO is frequently in absentia, employee attendance will fall.
If the CEO has a poor work ethic, is dishonest and does not follow a strong set of ethics, then employees could begin to follow the same code of ethics and mimic this behavior.
The way a CEO accepts new information is important to all future exchanges of information between themselves and their staff.
Sometimes, when a CEO has a fixed point of view and is unwilling to alter and adjust these viewpoints, then they can become judgmental of other people’s opinions and can’t perceive new possibilities that contradict what they believe is possible.
Enron gave the world one of the best examples of cultural malfunction to study and learn from.
The company’s official code of ethics was based on “communication, respect, integrity and excellence,” but they disregarded every word of it.
Enron CEO Jeffrey Skilling and many other top executives promoted a culture of greed and entitlement.
Skilling and his executives actions did not pay off in the long run: all of them stood trial for fraud and conspiracy, and were handed lengthy prison sentences.
Staff will tend to filter and manipulate information to suit the CEOs points of view in order not to provoke a reaction or clash with their superior and behavior such as this has a negative outcome for the company.
The best leaders are those who have the ability to change with the times.
The eternal question remains, what makes a good leader? How is the CEO meant to drive a culture of innovation and leadership, if all everyone wants to do is be like him or her?
Because CEOs are usually not around for any significant length of time in a company’s life cycle, the company needs to foster something that endures beyond this period.
You could be forgiven for thinking that this article so far contradicts its title.
CEO involvement is still the most important factor in creating and maintaining solid business performance , it just isn’t the only factor.
“Forbes” analyzed hundreds of businesses over the past few years, and they found a high correlation between the companies’ leadership development and their long term performance.
Of course, correlation does not mean causation, but it seems highly likely that this is the case.
Josh Bersin wrote for Forbes:
“Long term business performance comes from leadership culture and careful and continuous development of leadership at all levels. It’s not all about the CEO.”
A corporate culture will form whether it’s engineered or not, and if leadership doesn’t consciously shape the culture in the direction they want, it may end up taking a slow turn down a dark alley, a la Barclays Bank — who tried to fix the Libor rate and then attempted to blame the banks shortcoming on corporate culture.
CEOs need to be familiar with the business objectives and trained fully or promoted from within the company.
They need to be promoted from within or educated sufficiently if hired from outside the company.
The hiring practices of the organization are of paramount importance.
New employees need to be suited to the culture or else they will end up being unhappy and unproductive, they should also not be treated as units of production.
CEOs should also have an open-door policy, encouraging their employees to share their ideas and their problems.
One of the easiest ways to create a great corporate culture is to convince your staff that they matter.
Making a decision without your employees in mind or speaking to them first, could potentially damage the corporate culture more than it helps.
Qualities of CEOs
Lowell McAdam is the current chairman and CEO of Verizon Wireless. He previously served as CEO of Verizon Wireless and the COO of Verizon.
McAdam started with the company in 2000 and, in his early days there, he was tasked with creating a corporate culture for Verizon Wireless in the expectation that it would help differentiate the company.
Dennis Strigl was the lead executive in charge of integrating Verizon Wireless when McAdam first joined the company.
At a recent talk at Rutgers, McAdam remembered being told “the culture would determine the longevity and the success of the company as much as the technology would.”
Verizon Wireless, in establishing what type of company they would like to become, used employee surveys to develop a set of core values.
Unsurprisingly, they discovered that their staff “wanted to be associated with a company consumers could depend on.”
It may have taken Verizon Wireless four years to strategically implement these core values, but they were committed to redefining the business model and culture of Verizon Wireless to become a company that not only their consumers could depend on, but their employees were proud to work for.
McAdam stressed, “I can’t overemphasize how important the culture is to the business.”
When made CEO of Verizon Wireless, McAdam would have again played a huge part in the process of nurturing the company’s culture simply by believing that culture was crucial to the success of Verizon Wireless.
His belief would have filtered down to his everyday behavior and rubbed off on his staff.
Although the CEO may have countless others things on their plate, taking the time to show interest in employee satisfaction is imperative to the infrastructure of a strong and genuine corporate culture.
What Do You Think Of The CEO’s Role In Creating A Great Company Culture?
Do you think it’s more than the leadership? How much of a role do managers and employees play a role in creating a great company culture? Let us know your thoughts on twitter @Officevibe.