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Abstract: This article explores how organizational culture is a powerful yet often misunderstood force that shapes employee engagement, performance, and an organization's success. It provides a framework for leaders to decode their organization's unique culture by examining the underlying assumptions, espoused values, and visible artifacts and behaviors. The article highlights the critical role of leadership in driving cultural evolution through attention allocation, crisis response, selection/promotion criteria, and role modeling. It then outlines concrete steps for leaders to craft their desired culture, such as aligning culture with strategy, reinforcing systems and metrics, communicating priorities, and measuring and adapting over time. Case studies of Toyota and Starbucks illustrate how organizations can transform their cultures to support strategic goals and drive long-term organizational excellence.
Organizational culture is a powerful yet often misunderstood force that influences employee engagement, performance, and an organization’s success. While many acknowledge its importance, few truly understand how to effectively shape and leverage culture to achieve strategic goals.
Today we will explore ways for practitioners to decode their organization's culture, understand its drivers and influence, and take deliberate steps to evolve culture in a positive direction.
Understanding Culture Formation
All organizations have a culture that develops over time based on shared experiences, norms, and unspoken rules. While each business culture is unique, research illuminates common drivers that shape how culture forms and evolves. Ed Schein’s model of culture levels provides a useful framework for analyzing an organization’s culture (Schein, 2010). At the deepest level are basic underlying assumptions - unconscious beliefs that determine perceptions, thoughts and feelings. These are difficult to see but have enormous influence. Above that are espoused values - what the organization claims is important. On the surface are artifacts and behaviors - the visible manifestations of culture like dress code, jargon, rituals and attitudes.
By examining these levels, leaders can gain insight into the true beliefs and priorities driving their culture versus stated values. For example, a company may claim teamwork and collaboration are top priorities, but underlying assumptions and behaviors may actually reward individual performance above all else. Understanding discrepancies provides opportunities for alignment. Additionally, these levels suggest culture is not static, but evolves continuously based on organizational experiences and changes to underlying assumptions over time.
The Critical Role of Leadership
While broader industry and organizational factors help establish an initial culture, research consistently finds leadership as the single biggest determinant of subsequent cultural evolution (Kotter & Heskett, 1992; Schein, 2010). Leaders define what is reinforced or punished through their actions, decisions and role modeling. They determine what successes and failures mean for an organization and how people should respond. Subsequently, leaders shape the shared assumptions and mindsets that form the deepest levels of culture. Some key ways research shows leadership drives culture include:
Attention and time allocation - Where leaders devote their energy, attention and meeting time sends strong signals about priorities.
Reactions to crises - How leaders respond to critical incidents, both positively and negatively, shapes underlying mindsets about risks, innovation and mistakes.
Criteria for selection and promotion - Whom leaders choose to bring into the organization and advance says volumes about valued traits and behaviors.
Responses to exemplary and poor performers - Public recognition or punishment of key individuals affects norms and standards.
Deliberately role modeling behaviors - Setting an example of integrity, collaboration or other traits imprints cultural identity.
Decoding Culture: Understanding Your Organization's Unique Culture
With foundational theories in mind, leaders can take concrete steps to understand the specific cultural realities within their organization. Some key actions include:
Conducting a Culture Audit: A comprehensive culture audit involves gathering both qualitative and quantitative insights from employees at all levels. This can occur through surveys, focus groups, interviews and observational data about behaviors, workplace environment, and decision-making processes. Looking for patterns and themes across workgroups provides a holistic understanding of cultural strengths as well as blind spots.
Analyzing Stories and Artifacts: Stories employees tell about successes, failures, heroes and anti-heroes reveal underlying assumptions and priorities. Additionally, examining artifacts like office space layout, dress code norms, who sits where, meeting protocols, and day-to-day jargon yields insights.
Reviewing Metrics and Systems: Reviewing metrics that are tracked, bonuses distributed, promotions granted, and systematic processes like performance reviews signals what is truly valued versus stated priorities. Misalignment may suggest a need to evolve underlying assumptions driving behaviors and decisions.
Considering External Perceptions: Customers, partners, and the broader industry may perceive a culture differently than internal views. Their perspectives externalize aspects an organization may overlook and identify cultural traits affecting brand and reputation.
Crafting Culture Through Intentional Evolution
Once a robust understanding of current culture is achieved, leaders can craft the optimal culture to support strategic goals through deliberate evolution. While culture is difficult to forcibly change from the top-down overnight, several best practices for intentional cultural evolution include:
Aligning Culture with Strategy: Ensuring espoused values, behaviors and underlying assumptions support strategic priorities cultivates the optimal mindsets. For example, goals around innovation necessitate a culture tolerating risk and failure. Clarifying this strategic-cultural alignment guides evolution.
Role Modeling Desired Behaviors: Leaders must consistently exemplify priorities through actions like collaboration, decisiveness, caring for people over process and taking ownership of mistakes in addition to wins. This shapes emerging norms unconsciously.
Reinforcing with Systems and Metrics: Rewards, bonuses, promotions and performance reviews should recognize attainment of cultural priorities versus just short-term outputs. This conditions the organization to self-perpetuate the culture.
Communicating Priorities and Successes: Publicly framing important incidents through the lens of cultural values trains the organization on exemplary behaviors while cementing their meaning. Stories shape norms and assumptions over time.
Targeting Cultural Influencers and Pockets of Excellence: Key opinion leaders and high performing workgroups internalizing priorities can spread culture organically versus directives. Their buy-in and modeling helps socialize behaviors across divisions.
Measuring and Adapting: Regular auditing evaluates cultural evolution against objectives while maintaining sensitivity to ensure ongoing relevance. Open feedback guides ongoing recalibration versus forcing change.
Practical Industry Examples
While challenging, many organizations achieve remarkable transformations by intentionally crafting culture. Two case studies illustrate successes:
Aligning Culture at Toyota
Once obsessed with cost cutting and quality above all else, Toyota realized its rigid culture stunted innovation necessary for future success. Top leadership modeled curiosity and risk-taking to recalibrate underlying assumptions. Empowering decision-making and tolerating prudent failures encouraged experimentation as the new normal. Partnering dealers in cultural change aided buy-in across the ecosystem. Standardizing new metrics like intellectual stimulation, problem identification and sharing accelerated cultural evolution. By deliberately shaping norms and behaviors, Toyota cultivated an innovation-friendly culture driving future growth.
Reinventing Starbucks’ Cultural Foundation
Seeking to rediscover its people-centered roots amid hyper-growth, Starbucks’ new CEO initiated cultural evolution through open dialogue. Leaders invited nationwide store managers to share grassroots perspectives, stories and pain points, gaining invaluable understandings of true frontline realities diverging from perceived values. Senior executives then immersed themselves alongside baristas to reconnect. Purposeful conversations reinforced new priorities of caring, community and mutual dignity through everyday interactions versus top-down mandates. Tight feedback loops ensured ongoing realignment between evolving assumptions and strategic direction, authentically recapturing Starbucks' heartfelt culture.
Conclusion
While challenging, intentionally shaping organizational culture through decoding its realities, aligning priorities, and evolving behaviors and mindsets from the highest levels yields tremendous competitive advantage. Leaders play the most vital role by consciously role modeling, reinforcing and socializing cultural changes through everyday actions and decisions. With commitment to understanding a culture’s formation and drivers, adapting strategies based on continually auditing impact, and mobilizing the organization through exemplars, even radically different cultural identities are within reach for those willing to guide conscious evolution over time. When successfully cultivated, a strategic and empowering culture serves as a self-sustaining and values-based foundation driving long-term organizational excellence.
References
Kotter, J. P., & Heskett, J. L. (1992). Corporate culture and performance. New York, NY: Free Press.
Schein, E. H. (2010). Organizational culture and leadership (4th ed.). San Francisco, CA: Jossey-Bass.
Jonathan H. Westover, PhD is Chief Academic & Learning Officer (HCI Academy); Chair/Professor, Organizational Leadership (UVU); OD Consultant (Human Capital Innovations). Read Jonathan Westover's executive profile here.
Suggested Citation: Westover, J. H. (2025). Decoding Culture at Work. Human Capital Leadership Review, 19(1). doi.org/10.70175/hclreview.2020.19.1.5
