The tone at the top of any organization will be the driving force of the company culture. Culture cannot overcome an authority’s leadership style—it is determined by it.
As a leader in your company, you must consciously identify your leadership style and that of your managers with full knowledge that these styles of management have a direct impact on company culture.
The primary leadership styles and their resulting effects on company culture are discussed below. This list is not exhaustive and the impacts on culture, though validated by experience, may be perceived differently by others. The descriptions below are just the reflections of one socially-aware consultant.
Leadership style – The manager takes a direct approach to engaging with and directing staff. They may make decisions in silos, and accumulated information is perceived as a means of maintaining control. The king of the hill can seem dominating, overbearing, or critical. The benefits of an imperious leadership style include maintaining a level of perceived submission from direct reports. This submission can lead to high performance, employee dedication, and high productivity. These are great results!
Impact on company culture – Collaboration is not an esteemed element of the culture. Executives may appear to view new ideas as a threat, evoking a defensive response. The change agent may then perceive the defensive response as criticism or skepticism. Employees may see themselves as overlooked or unappreciated by management. Departments will often work in silos, severing cross-functional business processes and often duplicating work. Because it is not modeled at the executive and management levels, teamwork may not be valued by the individual departments.
Without team collaboration, the king of the hill may inadvertently drive team members to seek other opportunities where their individual talents may be recognized and engaged.
Ramifications for control compliance – SOX controls and company best practices may be assumed to be the invention of an information-hungry management. The importance of compliance and the benefits to streamlined business processes and information availability may not be addressed or championed by management or the staff.
Leadership style – This style is characterized by blurred lines between role as an authority figure and a peer. The cool dad/mom becomes just another member of the team, sometimes losing the authority figure role in the eyes of their staff. Efficient decision making may be sacrificed on behalf of collaboration. This style works well for managers whose personalities are naturally more extroverted, harmonious, and team-oriented.
Impact on company culture – Employees feel valued by the cool dad or mom, knowing their voice is heard. They believe they are part of the greater group and feel their jobs are secure. A possible unfortunate side effect is a lack of decision making. If everyone’s voice has equal weight, decisions may be slow and hesitant. The lack of clarity in roles may also cause employees to feel aimless. Work may feel haphazard if there's no clear authority communicated from the top.
Ramifications for control compliance – SOX controls and company best practices may be swallowed like cough medicine—necessary but unpleasant. Controls can be viewed as an impediment to the business process. The cool dad/mom may also be heard complaining about the cumbersome nature of the controls or even attempting to bypass the established controls in effort to appease staff.
Leadership style – The team captain employs high communication and collaboration and will elevate direct reports, holding them accountable and providing space for them to perform and execute their responsibilities. The team captain is interested in providing descriptive leadership rather than prescriptive directives. There is no confusion as to the final authority, but team members’ opinions are heard and weighted appropriately. Some employees may prefer a more hierarchical culture and may find the additional time required for making team decisions inefficient.
Impact on company culture – Employees feel empowered to perform their jobs and to grow in their careers. Departments may be inspired to be more communicative and less siloed. Decision making in this culture is less efficient than that of king of the hill due to the involvement of the team members. The tone of the team captain's leadership may earn the respect of their peers and the allegiance of their reports. This type of environment works best for employees with high self-motivation and self-initiative. When team conflict occurs, the team captain may have to exercise direct authority, which may confuse or frustrate the highly relational and harmonious team members.
Ramifications for control compliance – The importance of the controls framework is clear, and staff are held accountable for their own compliance to the controls. The team captain is educated on SOX requirements for their company and has engaged staff in the development, implementation, and monitoring of those controls.
The tone at the top of any company drives the company culture. Though most industry leaders cannot be identified strictly as one of the above leadership categories, some blend of the three will appear in every authority figure. While one style is not necessarily better than another, certain industries and workforces best function with particular styles.
Here’s the bottom line: know your leadership style. Be aware of the leadership styles of the managers you hire. Seek equilibrium. Be aware of the leadership styles required for different situations. If you’re in a complicated industry or project, a king of the hill might be necessary to make clear decisions. In the case of a team of various SME’s, a cool dad/mom might be a better fit to provide autonomy to each of the specialists. If your company is under the gun of regulation, a team captain might be required to communicate the importance of controls and engage the staff in compliance.
