Not surprisingly, leaders have a significant impact on organizational culture. However, what might be surprising is that the best leaders have the most impact on an organization’s culture without directly addressing it.

Instead, they shape the culture through their everyday actions. To better understand this concept, we need to understand what organizational culture is.

An organization’s culture is the shared beliefs and values of the members of the organization. Leaders communicate their beliefs and values and reinforce them using various methods, ultimately shaping the perceptions, understandings, and behaviors of those within the organization.

Organizational culture sets the framework for decision-making within a company, as deciding between option A or B will depend on an organization’s culture.

Leaders shape an organization’s culture by ensuring their actions and decisions are consistent and in alignment with its defined culture.

Leaders in successful organizations live their culture every day and never stray from it. They are clear about their values and set an example for other members of the organization to follow.

Conversely, inconsistent actions and decisions can deteriorate or erode an organization’s culture. This may lead to unengaged employees, high turnover, poor customer and vendor relationships, and ultimately lower profits.

Rather than honing in on the negative outcomes of a poor culture, let’s focus on positive aspects that companies with a strong organizational culture experience, such as a caring culture, sense of purpose, connection, sense of community, and growth and development.

Caring Culture

A caring culture usually results in a sense of community. When members of an organization feel like they belong, they are more engaged. There are many ways to reinforce a caring culture, like showing appreciation and recognizing achievements.

Sense of Purpose

A strong organizational culture instills a sense of purpose in all employees. Everyone in an organization understands the meaning of the work they are doing and are therefore driven to excel.

Connection

Understanding the organization’s culture and shared beliefs creates a connection for employees. Now more than ever, employees need to feel connected to better collaborate with others in the company.

Sense of Community

A strong culture promotes and reinforces the wellbeing of its employees, creating a sense of community. Wellbeing should encompass physical, emotional, and social wellness for everyone.

Growth & Development

Leaders can reinforce organizational culture by supporting their employees through growth and development. By promoting educational opportunities and providing regular feedback, leaders will build trust with employees.

These are just a few examples of how a strong culture can benefit an organization. This issue of CFMA Building Profits includes additional information on how to assess your organization’s culture and strengthen its core purpose and values.

Copyright © 2020 by the Construction Financial Management Association (CFMA). All rights reserved. This article first appeared in November/December 2020 CFMA Building Profits magazine.