How Does CEO Behavior Affect Business Culture?

Karen Benz
BetterManager Executive Coach

June 11, 2018


Organizational culture, in its simplest terms, can be defined as “the way we do things around here.” It is the patterns of behavior, symbols of reward and punishment, and the daily demonstration (or not) of the company’s core values that lead to the forming and norming of a company’s culture.

When coaching within organizations and within its leadership, we often ask, “What are the company values?” And more importantly, “How do you, as leaders in this company, demonstrate these values in your everyday work?” What we often see is a disconnect between the two. And, it starts at the top with the CEO.

A business has to know what its culture needs to reflect in order to remain competitive and profitable. Is innovation and creativity a driving value? If that’s the case, we would expect to see a culture where taking risks is rewarded. In this scenario, a risk-tolerant culture, where mistakes are made and learned from, is essential. In contrast, is stability and steadiness paramount to the company’s success? Then we would expect to see a culture where uncalculated risk is not tolerated.

At BetterManager, we recommend working towards a “coaching culture” where performance is reviewed at regular intervals (rather than at annual performance reviews – a process universally loathed by managers and employees alike). This allows for leaders to a) reinforce the corporate norms; b) discuss how employee behaviors are or are not aligned with corporate core values and c) allows employees more timely and direct feedback designed to improve behavior and performance.

In our experience working with CEO’s and C-Suite leaders, they often don’t realize how much people in their organizations watch their behavior and decision-making – looking for clues as to what is “normal”. Every decision has a ripple effect. And sometimes, that ripple-effect can be extremely harmful.

Corporate Cultures Gone Wrong

Take Uber as an example. Travis Kalanicks, the former CEO, had a reputation for being ruthless, having a bad temper, and a repertoire rife with sexual innuendo and harassment. His behavior had a trickle-down effect throughout the entire company. Employees think it must be okay to do these things since the CEO is doing them. At the very least, they expect not to be punished for the same behaviors. The result? A discriminating culture against its employees and a culture where sexual harassment was tolerated and, in some cases, encouraged.

As we have seen with CEO Harvey Weinstein debacle, either he was a brilliant manipulator or the master at creating a culture of sexual harassment and destruction. His patterns of sexual misconduct were widely known and accepted throughout the company and industry – as was illustrated by a joke at the Oscars by Seth McFarlane. The culture of Weinstein’s company, with Weinstein at the helm as CEO, said, “This is how we do things around here.” Now, the company is desperately trying to distance itself from the events that unfolded.

Cultures that Inspire: Walking the Walk

For all the Ubers and Weinstein Companies, there are so many more CEO’s and leaders who live their core values in everything they do. One such company – Uptake – located in Chicago, provides feedback to its employees at least twice a year, comparing their company values to behaviors employees demonstrate. It’s inspiring to see a company walking the walk.

Another example includes a recent conversation I had with an executive from Checkr, a company based in San Francisco. She recited her company’s core values and gave examples of how the work she was doing aligned with these values. These examples serve to prove that “living the values” shapes the culture in a positive way.

Leaders who are engaged in their work and are plugged into the company values are more likely to stop the negative behaviors which can take company culture in the wrong direction. Like the executive in San Francisco and the leadership at Uptake, not only are the leaders engaged and plugged into the company values, but most of the workforce is as well. Employees use their strengths in all they do.

At BetterManager, our business is based on coaching and building skills with leaders and managers so they can build positive relationships, support the work of others, all resulting in a productive and happy work culture they strive to create.

With a coaching culture established in the workplace, managers can allow employees to set their “personal GPS” by asking reflective questions without micromanaging, guide employees to initial self-evaluation to gain insight into their thought process and empower rather than criticize. This is how strong, healthy cultures are created and sustained over time.

Coaching question for the day: If your culture could talk, how would it describe itself?

Karen A. Benz, is an Executive Coach and DISC Facilitator with BetterManager. She coaches executives on demonstrating their company’s core values in the work they do.

Episode Transcript

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June 11, 2018