Top of mind for most executives today are two topics: creating the right business model to thrive in a rapidly evolving marketplace and attracting the right human capital that can make their long-term vision a reality. A less common process in the C-suite is a deep investigation into how senior leaders define cultural norms that either do, or do not, set the stage for high performance. Through a wide range of investigations into the intersection of culture and leadership personality, from Apple to the NAVY Seals, the cultural composition of high performance has become quite clear. Executives who have not taken a hard look in the mirror to evaluate whether they are embodying the right values and showing their people in words and deeds that they matter might not realize that their organizations are losing momentum and entering a state of decline.
Let’s take a step back to clarify leaders’ unique cultural responsibilities. Research into personality and culture has clearly demonstrated that the two are indisputably linked to high-performing organizations and, therefore, represent key levers in unlocking human potential. First, personality impacts how executives lead organizations, from decisions around resource allocation to their style in dealing with people, and drives a host of financial metrics, like investment in R&D, capital expenditures, return on assets, and cash flow.
Second, though not intuitive for some leaders, executive leadership shapes organizational culture, and, in turn, culture colors what people pay attention to, the goals they set and how they work. Further, when we look at the overlap between leadership styles and culture, the intersection falls into four broad areas:
- Fostering stable relationships
- Facilitating a competitive culture
- Ensuring strong operations management
- Focusing on adventurous innovation
Nonetheless, there is another area of performance that ensures that groups don’t hold hands while walking down the wrong path – namely, the ability to think rationally in aligning corporate strategy to internal and external factors that might impact the business. There are five leadership styles and associated culture types that work together to create high-performing organizations. To reach peak performance, leaders must critically evaluate how their behavior contributes to each of the following cultural pillars.
1. Acceptance and Relationship-Oriented Leadership
Acceptance is characterized by what Google discovered in its research on high-performing teams: psychological safety. Cultures that allow employees to express their true selves create the psychological conditions for teamwork, learning and collaboration. Research suggests a clear link between acceptance cultures and positive employee attitudes (e.g., job satisfaction, engagement and team morale). Leaders who effectively impact this cultural area understand the importance of building social capital in their organizations. Even more, they use that capital to motivate employees and approach the marketplace as a unified whole.
2. Achievement and Results-Oriented Leadership
Achievement concerns a focus on results, productivity and competitiveness. A recent meta-analysis established that “organizations with a market culture pursue organizational profitability and growth through competing intensely to acquire new customers and aggressively attacking competitors’ market share.” Unsurprisingly, the study showed that achievement values supplement chaos cultures (see below) in not only generating ideas but deriving ideas in the context of competing with rivals. Leaders who embody this standard raise the bar continually and uniformly, both for themselves and others. They bring more out of employees than they thought possible, and they strive for audacious goals.
3. Order and Operational Leadership
Order serves at least two purposes for organizations: goal clarity and specialization. It has long been accepted that clear rules, goals and role expectations reduce interpersonal conflict and enhance mutual dependency. However, we can take an even more fundamental look at this topic. Adam Smith wrote in “The Wealth of Nations” that “the greatest improvements in the productive powers of labor … seems to have been the effects of the division of labor.” Accordingly, prudent, order-focused leaders build cultural competencies that support tactical diligence, execution discipline, and the management of systems and processes (i.e., operations management).
4. Chaos and Strategic Leadership
If order is about operations management, then chaos is about destabilizing systems to position the organization for a new reality. More specifically, chaos facilitates adaptability through two mechanisms: innovation and risk-taking. First, innovation is the mechanism by which corporations detect external threats and use new data to modify existing axioms – as opposed to militantly adhering to tradition. Second, risk-taking leaders who build chaos cultures experiment and seize new opportunities, and they are unafraid of making mistakes. Interestingly, cultures of chaos have strong revenue growth, superior market valuations, and high ratings from both stock analysts and employees.
5. Reason and Scientific Leadership
In his recent book “Enlightenment Now,” Steven Pinker writes, “Reality is a mighty selection pressure, so a species that lives by ideas must have evolved with an ability to prefer correct ones.” It wasn’t until the scientific revolution that we progressed from intuition to the ability to challenge conventional thought, so it is not surprising that organizations often make ill-fated decisions based on ineffective evaluation of big data. Good judgement, in some ways, is the holy grail of leadership. Finding leaders who are capable of synthesizing their perceptions with reality is fundamental to organizational success. Unfortunately, there are plenty of examples of when leaders made decisions in silos or avoided tough decisions, and their bad ideas took the organization in the wrong direction.
There is no doubt that leadership and culture are related to several indicators of organizational effectiveness, including financial metrics like revenue growth and the probability of product success in a new market. A fundamental challenge for leaders is to spend more time thinking about the intersection between their leadership style and the cultures they create, as well as to better understand the potential incongruence between the current culture of their organization and their leadership approach. The model presented here is not only theoretically strong but is also practical. It can help organizations align the collective phenomenon of culture with leadership styles, giving executives and senior L&D practitioners a concise roadmap for driving culture change, assessing and developing leaders, and using people insights to win against the competition.