CULTURAL LEADERSHIP:
An organization exists only because of the people who are a part of it, and those people both shape and
interpret the character and culture of the organization. That is, an organization is not a slice of objective
reality; different people may perceive the organization in different ways and relate to it in different
ways. Leaders in particular formulate a viewpoint about the organization and the values that can help
people achieve the organization’s mission, vision, and strategic goals. Therefore, leaders enact a
viewpoint and a set of values that they think are best for helping the organization succeed. A primary
way in which leaders influence norms and values to build a high-performance culture is through cultural
leadership. A cultural leader defines and uses signals and symbols to influence corporate culture.
Cultural leaders influence culture in two key areas:
1. The cultural leader articulates a vision for the organizational culture that employees can believe in.
This means the leader defines and communicates central values that employees believe in and will rally
around. Values are tied to a clear and compelling mission, or core purpose.
2. The cultural leader heeds the day-to-day activities that reinforce the cultural vision. The leader makes
sure that work procedures and reward systems match and reinforce the values. Actions speak louder
than words, so cultural leaders “walk their talk.”
For values to guide the organization, leaders model them every day. WestJet Airlines, which is
consistently ranked as having one of Canada’s most admired corporate cultures, provides an illustration.
Employees (called simply “people” at WestJet) regularly see top leaders putting the values of equality,
teamwork, participation, and customer service into action. At the end of a flight, for example, everyone
on hand pitches in to pick up garbage–sometimes even the CEO. Customer-facing employees have
“guidelines” rather than rules in terms of what they can do for customers, and no one is ever punished
for well-intended errors of judgment. A new gate agent who gave free tickets to an entire flight for a
minor inconvenience, for instance, was hailed as a hero for her effort, even though leaders coached her
through understanding the impact of her action on the company so she might make a less costly
decision the next time.39 Creating and maintaining a high-performance culture is not easy in today’s
turbulent environment and changing workplace, but through their words—and particularly their
actions—cultural leaders let everyone in the organization know what really counts. Some of the
mechanisms leaders use to enact cultural values are organizational rites and ceremonies, stories,
symbols, and specialized language. In addition, they emphasize careful selection and socialization of new
employees to keep cultures strong. Perhaps most importantly, leaders signal the cultural values they
want to instill in the organization through their day-to-day behavior.
Ceremonies:
A ceremony is a planned activity that makes up a special event and is generally conducted for the
benefit of an audience. Leaders can schedule ceremonies to provide dramatic examples of what the
company values. Ceremonies reinforce specific values, create a bond among employees by allowing
them to share an important event, and anoint and celebrate employees who symbolize important
achievements.
A ceremony often includes the presentation of an award. At Mary Kay Cosmetics, one of the most
effective companies in the world at using ceremonies, leaders hold elaborate award ceremonies at an
annual event called “Seminar,” presenting jewelry, furs, and luxury cars to high-achieving sales
consultants. The most successful consultants are introduced by film clips like the ones used to present
award nominees in the entertainment industry. These ceremonies recognize and celebrate highperforming employees and help bind sales consultants together. Even when they know they will not
personally be receiving awards, consultants look forward to Seminar all year because of the emotional
bond it creates with others.
Stories:
A story is a narrative based on true events that is repeated frequently and shared among employees.
Leaders can use stories to illustrate the company’s primary values. Employees at IBM often hear a story
about the female security guard who challenged IBM’s chairman. Although she knew who he was, the
guard insisted that the chairman could not enter a particular area because he wasn’t carrying the
appropriate security clearance. Rather than getting reprimanded or fired, the guard was praised for her
diligence and commitment to maintaining the security of IBM’s buildings. By telling this story,
employees emphasize both the importance of following the rules and the critical contributions of every
employee from the bottom to the top of the organization. Russell Goldsmith, chairman and CEO of City
National Bank in Los Angeles, believes in the force of storytelling so much that he brought in consultants
to teach people how to share their stories about teamwork or customer service, which reinforces the
company culture. In some cases, stories may not be supported by facts, but they are consistent with the
values and beliefs of the organization. A widely told story at Nordstrom, for example, is about the
associate who, in order to satisfy a customer who was unhappy with the performance of his automobile
tires, gave the customer his money back. The only thing is, Nordstrom does not sell tires. The story
reinforces the company’s no-questions-asked return policy.
Symbols:
Another tool for conveying cultural values is the symbol. A symbol is an object, act, or event that
conveys meaning to others. For example, top leaders at Germany’s TeamBank, described in the previous
chapter, made the informal Du the mandatory form of address rather than the formal Sie commonly
used in German workplaces. The change is a symbol of top management’s respect for every employee.
At tomato processor Morning Star, described at the beginning of Chapter 10, administrative offices are
located near the factory floor to symbolize that everyone is on the same team with the same purpose.
Leaders can also use physical artifacts to symbolize important values. After the national hotel chain
Extended Stay America emerged from bankruptcy, employees remained fearful of losing their jobs if
they made any decision that might cost the company money. To implement a new culture where people
aren’t afraid to take risks to serve customers, new CEO Jim Donald began handing out lime-green “Get
Out of Jail, Free” cards. All people had to do, he told them, was call in the card when they took a big risk
on behalf of the company.
Specialized Language:
Language can shape and influence organizational values and beliefs. Leaders sometimes use slogans or
sayings to express key corporate values. Slogans can easily be picked up and repeated by employees. For
example, at Averitt Express, the slogan “Our driving force is people” applies to customers and
employees alike. The culture emphasizes that drivers and customers, not top executives, are the power
that fuels the company’s success. Leaders also express and reinforce cultural values through written
public statements, such as corporate mission statements or other formal statements that express the
core values of the organization. When Sidney Taurel, who became chairman and CEO of Eli Lilly and
Company in 1999, wanted to create a more adaptive culture able to respond to the demands of the
global marketplace, he worked with other leaders to develop a formal statement of how to put Lilly’s
core values (respect for all people, honesty and integrity, and striving for excellence) into action. The
statement includes descriptions and mottos such as “Model the values: Show us what you’re made of,”
“Implement with integrity, energy, and speed: Provide the powder and supply the spark,” and “Get
results through people: Set people up to succeed.”
Selection and Socialization:
To maintain cultural values over time, leaders emphasize careful selection and socialization of new
employees. Companies with strong, healthy cultures, such as Nordstrom, Southwest Airlines, Google,
and Zappos, often have rigorous hiring practices. Once the right people are hired, the next step is
socializing them into the culture. Socialization is the process by which a person learns the values, norms,
perspectives, and expected behaviors that enable him or her to successfully participate in the group or
organization. When people are effectively socialized, they “fit in” because they understand and adopt
the norms and values of the group. Socialization is a key leadership tool for transmitting the culture and
enabling it to survive over time. Leaders act as role models for the values they want new employees to
adopt, as well as implement formal training programs, which may include pairing the newcomer with a
key employee who embodies the desired values. Rituals can also be used for socialization. At Gentle
Giant, a Somerville, Massachusetts, moving company that has won nine Best of Boston awards from
Boston magazine, new hires participate in the “stadium run.” CEO Larry O’Toole decided to have new
hires run the tiers of Harvard University stadium as a way to emphasize that people at the company
work hard, challenge themselves, and go the distance rather than letting up if things get tough. After the
run, O’Toole provides a hearty breakfast and gives an orientation speech. “You’re not a Gentle Giant
until you’ve done the run,” said employee Kyle Green. Good leaders don’t leave employee socialization
to chance. Formal socialization programs can be highly effective. One study of recruits into the British
Army surveyed newcomers on their first day and then again eight weeks later. Researchers compared
the findings to a sample of experienced “insider” soldiers and found that after eight weeks of training,
the new recruits’ norms and values had generally shifted toward those of the insiders. Another field
study of around 300 people from a variety of organizations found that formal socialization was
associated with less stress for newcomers, less ambiguity about expected roles and behaviors, and
greater job satisfaction, commitment, and identification with the organization.
Daily Actions:
One of the most important ways leaders build and maintain the cultures they want is by signaling and
supporting important cultural values through their daily actions. Employees learn what is valued most in
a company by watching what attitudes and behaviors leaders pay attention to and reward, how leaders
react to organizational crises, and whether the leader’s own behavior matches the espoused values.
Former AmerisourceBergen CEO Dave Yost supported values of frugality and egalitarianism by
answering his own phone, flying coach, and doing without fancy perks and stylish office furniture.
Leaders can also change negative or unproductive cultures by their actions. At Dynergy, a Houstonbased power producer, new CEO Bob Flexon’s office is a 64-square-foot cubicle identical to those of the
or so headquarters employees surrounding him. People often stop by just to chat. Flexon is instilling
values of openness, egalitarianism, and collaboration to try to get Dynergy back in growth mode after
the company went through bankruptcy. Good leaders understand how carefully they are watched by
employees. As former GE CEO Jack Welch says, “Look, it’s Management to say that the best competitive
weapon a company can possess is a strong culture. But the devil is in the details of execution.” Welch
says one sure route to destroying the culture is to let strong performers get away with not honoring the
cultural values. People notice, and they conclude that the cultural values aren’t important. Leaders
make sure people are evaluated for both making their numbers and demonstrating the values, as
described earlier in Exhibit, and they don’t hesitate to fire people who refuse to uphold important
values. A new CEO at Barclays PLC, which became embroiled in a scandal when it was found that some
managers tried to rig interest rates to increase profits, is trying to put this into action. CEO Anthony
Jenkins has told employees to uphold the values of respect, integrity, service, excellence, and
stewardship, or get ready to be fired. “We must never again be in a position of rewarding people for
making the bank money in a way which is unethical or inconsistent with our values”.