When it comes to leadership, many people focus on qualities like decisiveness, communication skills, and strategic thinking. While these traits are undoubtedly important, there is another aspect of leadership that often gets overlooked: the role of culture. The culture of an organization can have a significant impact on its success, and leaders who understand and prioritize this aspect can create a more positive and productive work environment. In this blog post, we will explore the importance of culture in leadership and provide practical tips for harnessing its power.
Why is it important to hire leaders who understand and prioritize the existing culture or improving it if needed? Leaders who understand and prioritize the existing culture of an organization are better equipped to make informed decisions that align with its values and goals. By hiring leaders who are culturally sensitive, you can ensure that they will respect and uphold the traditions and norms that make your organization unique. Additionally, leaders who are in tune with the culture are more likely to inspire trust and loyalty among employees, leading to higher levels of engagement and job satisfaction.
To hire leaders who understand and prioritize the existing culture, every organization should consider incorporating questions about cultural fit into your interview process for anyone being reviewed and interviewed. Your organization should seek out candidates who demonstrate an awareness of your organization’s values and show a willingness to embrace its culture. Additionally, provide new leaders with training and resources to help them acclimate to the culture and understand how their actions can impact it.
What happens if something goes wrong and how should your compliance function address behavior that undermines the organizational culture? The most direct method and perhaps the most significant is to address behavior that undermines the organizational culture promptly and directly. The reason is when left unchecked, negative behavior can erode trust, create conflict, and harm employee morale. Compliance professionals should take a proactive approach to addressing behavior that goes against the organization’s values by setting clear expectations, providing feedback, and offering support to help employees course correct.
When addressing behavior that undermines the organizational culture, you should focus on open communication, active listening, and constructive feedback. It is important to address issues as they arise and to involve HR, compliance or other resources as needed to ensure a fair and respectful resolution. With compliance the heralds of Organizational Justice and Organizational Fairness, you can clearly see the compliance angle in all these matters. By addressing negative behavior head-on, your organization can send a clear message that the organization’s culture is non-negotiable and that everyone is expected to uphold its values.
One of the key ways to determine if your organization needs to course correct is through a culture audit. Implementing cultural audits in an organization can help leaders gain valuable insights into the current state of the culture and identify areas for improvement. By conducting regular assessments of the culture, leaders can track progress, measure the impact of initiatives, and make data-driven decisions about how to strengthen and promote the organization’s values. Cultural audits can also help leaders identify potential risks, such as issues related to diversity and inclusion, and take proactive steps to address them.
The Department of Justice (DOJ) has also recognized the management of culture as a critical element for compliance. Beginning with the speech by Deputy Attorney General Lisa Monaco in October 2021, she discussed the need for companies to assess, manage, monitor and improve their corporate culture. This was memorialized in the 2023 update to the Evaluation of Corporate Compliance Programs (2023 ECCP). In the 2023 ECCP, the DOJ asks these following questions how often and how does a company measure a culture of compliance? What are your hiring and incentive structures around compliance? What steps have you taken in response to your measurements of compliance?
All these questions posed by the DOJ lead to the requirement that every company needs to assess their culture, because the DOJ is going to do in any enforcement action or review. However, it can be done using the same compliance processes currently in place, as culture is just like any other risk. As a risk, it can be assessed. This is why a culture audit is such a critical element for you to perform to make sure your corporate culture is where it should be. When you have assessed your culture, then you can start to put together a management strategy in place to improve and course correct your corporate culture. With your culture strategy in place, you can train your employees on it and then monitor their performance, determining the results. From there you can improve your culture strategy as needed. But it all starts with a culture audit.
To implement cultural audits in your organization, consider working with an external consultant or HR professional who specializes in organizational culture. Develop a comprehensive audit plan that includes surveys, focus groups, interviews, and observations to gather data from a variety of sources. Use the insights gained from the audit to develop a strategic action plan for strengthening the culture, addressing areas of concern, and fostering a positive work environment for all employees.
In conclusion, the importance of culture in leadership cannot be overstated. Leaders who understand and prioritize the existing culture of an organization can create a more positive and productive work environment, inspire trust and loyalty among employees, and drive success. By hiring culturally sensitive leaders, addressing behavior that undermines the organizational culture, and implementing cultural audits, organizations can strengthen their values, build a strong foundation for growth, and create a workplace where everyone can thrive.
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