Organizational Culture
Company Culture Is Everyone’s
Responsibility
y Denise Lee Yohn
Fe
uary 08, 2021
Summary.
HBR Staff/Galaxy/vitalik XXXXXXXXXX/Getty Images
A top down approach to building company culture no longer works for several reasons. Fo
one, Covid-19 has upended how leaders interact with employees and how coworkers connect with each
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h
.org/2016/10/the-leadership-blind-spots-at-wells-fargo
https:
www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
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cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
other. Next, company culture has grown in importance, thanks to recent high-profile crises at big name
companies. A new culture-building...
Here’s how organizational culture might have been handled in the
past: The CEO commissions the Human Resources department to
produce an effective company culture. HR designs a campaign to
tout a mission statement and core values that the CEO and senio
management developed. HR also implements some employee
perks like free snacks in the
eak room or monthly birthday
cele
ations. Maybe they also field an annual employee
engagement survey and report results back to the CEO. And then
with their culture-building to-do lists completed, the CEO and HR
move on to other priorities.
This approach no longer works for several reasons. For one,
Covid-19 has upended how leaders interact with employees and
how coworkers connect with each other. The need to adapt
quickly and remain flexible during the pandemic has also
evealed the ineffectiveness of a top-down leadership approach.
Next, company culture has grown in importance, thanks to recent
high-profile culture crises such as those at Uber and Wells Fargo,
the intensified push for DEI (diversity, equity, and inclusion), and
the continuing battle for talent. Culture has become a strategic
priority with impact on the bottom line. It can’t just be delegated
and compartmentalized anymore.
A new culture-building approach is already in place at some
organizations, one in which everyone in the organization is
esponsible. Importantly, this model doesn’t relegate culture-
uilding to an amorphous concept that everyone influences but
more
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h
.org/2017/06/uber-cant-be-fixed-its-time-for-regulators-to-shut-it-down
https:
h
.org/2016/10/the-leadership-blind-spots-at-wells-fargo
https:
www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
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h
.org/2019/11/why-are-we-here
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cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
https:
www.wateraid.org/us
https:
www.wateraid.org/uk/publications/uk-governance-manual-2019
no one leads or is accountable for. Shared responsibility fo
culture throughout an organization involves different people and
functions within the organization playing different roles in
developing and maintaining the culture.
In this context, culture can be defined as the ways people in the
organization behave and the attitudes and beliefs that inform
those behaviors (i.e., “the way we do things around here”) —
including formal, stated norms as well as implicit ways people
work and interact. At many organizations there is a gap between
the existing culture and the “desired” culture — the culture
needed to support and advance the company’s goals and
strategies. In a new culture-building model, everyone is
esponsible for cultivating the desired culture.
This approach assigns different roles in defining and developing
the culture. This happens through formal roles as well as informal
spheres of influence and reflects how organizations actually
operate these days. It also establishes clear accountabilities fo
esults. While the actual implementation of this approach may
vary based on the type, size, age, and structure of the
organization, the general distribution of responsibility is like this:
�. Board of directors: Guide the definition and development of
the desired culture, ensuring that it aligns with business goals
and meets the needs of all stakeholders.
�. CEO and senior management team: Define the desired
culture and cultivate it through leadership actions including
setting objectives, strategies, and key results that prioritize
culture-building; and designing the organization and its
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h
.org/search?term=denise%20lee%20yohn
https:
h
.org/2017/06/uber-cant-be-fixed-its-time-for-regulators-to-shut-it-down
https:
h
.org/2016/10/the-leadership-blind-spots-at-wells-fargo
https:
www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
https:
h
.org/2019/11/why-are-we-here
https:
cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
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www.wateraid.org/us
https:
www.wateraid.org/uk/publications/uk-governance-manual-2019
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www.theguardian.com
usiness/2015/nov/06/nearly XXXXXXXXXXhad-data-
eached-in-talktalk-cyber-attack
operational processes to support and advance the company’s
purpose and core values.
�. Human Resources department: Design employee
experiences that interpret and reinforce the desired culture.
Also, implement strategies and programs that enable the rest of
the organization to fulfill their culture responsibilities, such as
offering training programs that develop leader capacity fo
culture-building and employee engagement; and developing
culture guidebooks, processes such as performance
management, and systems such as rewards and recognition
programs that nurture the desired culture.
�. Compliance, Risk, and Ethics department: Provide input to
the CEO and senior management team on the definition of the
desired culture from the perspective of ethics and risk. Also,
ensuring that execution on the desired culture across the
organization aligns with the company’s risk management
strategies through tools such as ethics decision trees, processes
such as a whistleblower program, and systems such as
compliance monitoring that align with the desired culture.
�. Middle managers: Deliver employee experiences that
interpret and reinforce the desired culture. Also, implementing
culture-building strategies, cultivating employee engagement
with the desired culture, and fulfilling the culture-building
esponsibilities of employees.
�. Employees: Provide input to the CEO and senior management
team on the definition of the desired culture and culture-
uilding programs and tactics by providing insights on how the
desired culture aligns with or differs from the actual culture,
customer perspectives, and employee needs and expectations.
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h
.org/search?term=denise%20lee%20yohn
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h
.org/2017/06/uber-cant-be-fixed-its-time-for-regulators-to-shut-it-down
https:
h
.org/2016/10/the-leadership-blind-spots-at-wells-fargo
https:
www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
https:
h
.org/2019/11/why-are-we-here
https:
cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
https:
www.wateraid.org/us
https:
www.wateraid.org/uk/publications/uk-governance-manual-2019
https:
www.theguardian.com
usiness/2015/nov/06/nearly XXXXXXXXXXhad-data-
eached-in-talktalk-cyber-attack
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pubsonline.informs.org/doi/10.1287/orsc XXXXXXXXXX
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www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
Employees should provide feedback on existing culture-
uilding efforts and ideas for new ones. Also, creating,
adhering to, and enforcing routines and norms that interpret
the desired culture; and aligning their attitudes and behaviors
with the desired culture.
The Roles of Boards and Middle Managers
In this new distribution of culture-building responsibilities, let’s
look at two groups that may be less well-understood: the board of
directors and middle managers.
Board of Directors
Culture can be an asset as well as a risk to an organization. As Si
Adrian Montague, former Chairman of Aviva plc, says, “Culture is
the glue that binds an organization together. It has a very
significant impact on the firm’s effectiveness, ethics, and
governance. How could a board not have a view on the fitness fo
purpose of the firm’s culture?” And yet, according to the Financial
Reporting Council, boards of directors are often not actively
engaged in culture-building.
What’s more, the average CEO tenure has decreased relative to
oard member tenure and is now approximately five years (vs.
over twice that length for board members), according to an article
in HBR and CGLytics. So, boards have a greater longitudinal
perspective to inform the purpose of the company and to assess
the organization’s delivery on it. And strategy+business reports
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h
.org/search?term=denise%20lee%20yohn
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h
.org/2017/06/uber-cant-be-fixed-its-time-for-regulators-to-shut-it-down
https:
h
.org/2016/10/the-leadership-blind-spots-at-wells-fargo
https:
www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
https:
h
.org/2019/11/why-are-we-here
https:
cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
https:
www.wateraid.org/us
https:
www.wateraid.org/uk/publications/uk-governance-manual-2019
https:
www.theguardian.com
usiness/2015/nov/06/nearly XXXXXXXXXXhad-data-
eached-in-talktalk-cyber-attack
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pubsonline.informs.org/doi/10.1287/orsc XXXXXXXXXX
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www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
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that boards of directors are increasingly expected to enforce
accountability on issues such as purpose, mission, and core
values.
So, the board must play a more active role in culture-building. It
should guide the definition and development of the desired
culture, ensuring that it aligns with business goals and meets the
needs of all stakeholders. The board ca
ies out this responsibility
y:
Designating culture as a regular agenda item during board
meetings
Engaging ongoing conversations with the CEO/owner and the
leads of Human Resources and Compliance, Risk, Ethics, and
DEI about culture priorities, strengths, gaps, and challenges
Commissioning culture audits and assessments and reviewing
esults and indicated actions
Considering culture leadership capabilities in succession
planning and senior officer recruitment
Vetting and approving public statements about the
organizational culture
At the nonprofit WaterAid, the board has been highly
instrumental in ensuring the organization’s performance is
aligned to its values. Board members regularly engage in
conversations — with executives, among board members, and
with staff in seminars on particular issues — about the changing
context of the organization’s work and what it means fo
achieving its vision and strategy.
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h
.org/2017/06/uber-cant-be-fixed-its-time-for-regulators-to-shut-it-down
https:
h
.org/2016/10/the-leadership-blind-spots-at-wells-fargo
https:
www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
https:
h
.org/2019/11/why-are-we-here
https:
cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
https:
www.wateraid.org/us
https:
www.wateraid.org/uk/publications/uk-governance-manual-2019
https:
www.theguardian.com
usiness/2015/nov/06/nearly XXXXXXXXXXhad-data-
eached-in-talktalk-cyber-attack
https:
pubsonline.informs.org/doi/10.1287/orsc XXXXXXXXXX
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
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ssir.org/articles/entry/organizational_culture_as_a_tool_for_change
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whatgreat
andsdo.com
https:
www.amazon.com/Fusion-Integrating-Culture-Greatest-Companies/dp/ XXXXXXXXXX
TalkTalk, the British telecom, provides another example of how a
oard exerts culture-shaping responsibilities. After a data
each
crisis prompted widespread culture change at the company, board
members began asking questions about risk differently. Instead
of na
owly focusing on their technical responsibilities and
simply asking, “Are we safe?” directors adopted
oader oversight
for the organization’s culture and enhanced influence on risk
management. By asking “What risks are we taking and how can
they be minimized?”, directors are able to make more informed
judgements about the level of risk the company em
aces.
Middle Managers
Leaders in the middle layers of an organization’s hierarchy, such
as department managers, store managers, and program leaders,
wield the most influence on employees’ daily experiences, so they
play a critical role in company culture. But middle managers in
many organizations are not usually empowered to influence
culture to the degree that higher-level leaders are — and they’re
often overlooked in culture-building efforts.
Middle managers can and should play a critical role in cultivating
the desired culture by:
Ensuring the tools, environment, and intangible aspects of
employees’ day-to-day worklife represent the company’s
employee experience strategy
Applying the organization-wide culture-building objectives,
strategies, and key results to the context of their group o
function
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www.wcomc.org/sites/default/files/files/Tomo
ows%20Company%20Governing%20Culture%20vfl.pdf
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
https:
h
.org/2019/11/why-are-we-here
https:
cglytics.com/ XXXXXXXXXXsp-500-review-increasing-boardroom-diversity
https:
www.strategy-business.com/article/In-a-crisis-companies-must-know-their-purpose
https:
www.wateraid.org/us
https:
www.wateraid.org/uk/publications/uk-governance-manual-2019
https:
www.theguardian.com
usiness/2015/nov/06/nearly XXXXXXXXXXhad-data-
eached-in-talktalk-cyber-attack
https:
pubsonline.informs.org/doi/10.1287/orsc XXXXXXXXXX
https:
www.frc.org.uk/getattachment/3851b9c5-92d3-4695-aeb2-87c9052dc8c1/Corporate-Culture-and-the-Role-of-Boards-Report-of-Observations.pdf
https:
ssir.org/articles/entry/organizational_culture_as_a_tool_for_change
https:
h
.org/search?term=denise%20lee%20yohn&search_type=search-all
http:
whatgreat
andsdo.com
https:
www.amazon.com/Fusion-Integrating-Culture-Greatest-Companies/dp/ XXXXXXXXXX
Conducting coaching and training with employees to cultivate
their engagement with the desired culture
Communicating and role-modeling the desired culture
I was struck by the critical influence of middle managers on
culture-building in a case study on a major oil producer presented
in a paper published in Organization Science. While a corporate
culture-change initiative met with resistance from employees fo
whom the old culture and processes were ingrained, one
operating unit successfully adopted the new culture thanks to its
savvy management team. These managers established
accountabilities for certain actions, sanctioned other behaviors,
and devised and enforced new metrics in support of the new
culture. They were able to get traction where the organization’s
senior leaders weren’t because their methods for culture-building
were commensurate with their roles as middle managers.
Produce Results Through Shared Responsibility
With each group or function em
acing its culture-building
esponsibilities, a healthy, well-aligned, effective culture
improves business performance results. That’s what Old Mutual
Wealth found back in 2012. In its efforts to recover from the
financial crisis, the firm’s board drove the redefinition of the
corporate purpose and mandated the senior management team
pursue it.
To cultivate a customer-centric culture,