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Why Company Culture Belongs To CEOs, Not HR
In today’s fast-paced business environment, companies are constantly evolving and adapting to changing circumstances. However, one critical aspect of corporate success often takes a backseat: company culture. It is crucial for leaders to understand that culture belongs to the CEO, not HR.
Too many organizations treat culture as an afterthought, relegating it to HR departments or attempting to address it through superficial perks like free snacks and foosball tables. However, this approach is misguided. Culture plays a vital role in shaping every aspect of business operations, from decision-making to employee motivation.
In reality, culture has become the invisible backbone of organizational success. For instance, research reveals that companies with strong cultures are 1.5 times more likely to achieve average revenue growth of over 15% for three consecutive years. Moreover, organizations with high employee engagement see an increase in productivity by a staggering 18%.
The misconception that HR is responsible for company culture is just that – a misconception. The Gartner study found that only 31% of HR leaders believe their organization’s internal environment can drive future success. This notion underscores the critical importance of CEOs serving as chief culture officers.
Satya Nadella’s transformation at Microsoft offers a compelling example of this principle in action. Upon becoming CEO, Nadella prioritized shifting the company’s culture from a “know-it-all” to a “learn-it-all” mentality. By emphasizing empathy, learning, and growth, he revitalized Microsoft. The results are impressive: the company’s stock soared over 1,000% since Nadella took charge in 2014, resulting in a market value of $3 trillion.
It is essential for leaders to recognize that culture is not just a line item to delegate. Rather, it represents the foundational force that shapes every aspect of organizational operations. This involves setting a tone and making conscious decisions about how they wish their organization to operate.
The call to action for leaders is clear: CEOs must take ownership of company culture, recognizing it as both a strategic asset and competitive differentiator. Culture determines not only how work gets done but also how decisions are made and people interact with one another.
Unfortunately, some leaders opt for “Ostrich Leadership,” deliberately avoiding difficult cultural conversations. These individuals surround themselves with yes-people, create hierarchical structures that filter out uncomfortable truths, and remain blissfully unaware of growing organizational discontent until it erupts into a full-blown crisis.
It is time for CEOs to stop ignoring this critical aspect of their organization’s success or failure. By championing culture from day one, leaders can transform their organizations, making them more resilient and adaptable in the face of uncertainty.
For those willing to take on this challenge, the rewards are substantial – a thriving organization that genuinely engages its employees, delights its customers, and delivers lasting value to shareholders.
Source: www.forbes.com
