Some of the most successful organisations understand that if they are to survive and thrive in this complex, constantly changing world, they must satisfy the wants of both their external and internal (ie. employees) customers. But what many businesses don’t consider is the extent to which their internal culture impacts their customers’ reality.  Furthermore, it is not just one singular culture that is having a knock-on effect on customers, it is in fact three.

1. The personal culture of the individual

2. How that personal culture is utilised when it forms part of a collective leadership culture

3. And, in turn, how the collective leadership culture is supported and nurtured by the organisational culture

A blend of cultures

When there is a healthy, seamless interaction between the leadership culture (personal and collective) and the wider organisational culture then customers reap positive benefits.

However, mismatches between these cultures are not unlikely, and each organisation will address this culture conundrum in their own unique way. Some will focus on how they market their services or product; others will consider how to smooth out operational difficulties, and another contingent will take a close look at the people within the organisation. 

When faced with several operational options the C-Suite may decide that a culture change programme is the best solution to the mismatch between what customers want, executive teams expect, and employees deliver.

It is not uncommon for these programmes to see the behavioural change of employees as a sole determinant for success, without addressing any leadership or organisational culture issues that the employees have been marinated in. This reduces the likelihood that the eventual customers’ reality is one that the organisation can be proud of, and the employees accept. Why is this the case?

Because culture is the root of the customers’ reality 

For many years organisations have considered culture to mean ‘what we do around here’, which is often taken to mean how the organisation responds and reacts in its day-to-day running, and how individuals are to interact within these predicted responses.

It is fair to say that the turn of the century began a subtle shift (which accelerated in 2020), towards the concept of company culture to include ‘who we are around here’. This is taken to include the personal cultural elements everyone brings to the organisation. 

For organisations that are becoming more customer centric, due consideration must be given to the leadership culture that is being cultivated

It is perhaps the clash of the individual culture with organisational culture that is accelerating the dissatisfaction that individuals are now expressing in the workplace. It is therefore important that leaders consider how their own personal culture impacts the collective leadership culture. This is especially true when we consider that leadership culture can lead to a mismatch between what customers want and executive teams expect.

How employees embed themselves into a culture is determined by the way individual leaders lead and interact with their stakeholders. This includes how the leadership team works together, making the role of the organisation in how it supports and nurtures the leadership culture all important. 

The interaction between the leadership and organisational culture, alongside the ability of the individuals to be truly customer centric, has a direct impact on the customers’ reality. Organisations should therefore take note of what shapes both a strong leadership and organisational culture, and how they can better interact with one another. 

The makings of a leadership culture

The leadership culture is influenced by the following six themes (in no particular order):

• Collaboration and alignment
• Stakeholder leadership
• Behaviours
• Empowerment
• The greater good principle
• Ethics and values

For organisations that are becoming more customer centric, due consideration must be given to the leadership culture that is being cultivated. All individuals working within the organisation take their cues from the leaders within them and the culture they generate, regardless of whether the leader has a formal title or where they sit within the organisational hierarchy.

For example, does the leadership culture within your organisation support the greater good principle? My definition of the greater good principle is:

‘First do no harm, and if you have to do ‘harm’ then do the least amount of harm as possible’. 

An example of how a Maverick Leader would consider this principle can be viewed through the lens of an organisational restructure. The Maverick Leader would firstly look at all possible permutations of an organisational restructure, seeking to lessen the possibility of redundancies, and examine all alternative solutions. If redundancies were the best possible solution, then they would conduct the redundancies with empathy and compassion to lessen the potential ‘harm’ to affected employees. The greater good principle does not mean that leaders should avoid making the hard decisions, it means having a lack of ego and an objective, empathetic outlook.

An effective leadership culture is one that empowers all, is collaborative and can align stakeholders through the potent use of stories, ethics and demonstration of values.

When such an organisation supports the right leadership culture, it then becomes possible to align all stakeholders to its mission and values

The makings of an organisational culture

Similar to the leadership culture, the organisational culture is also influenced by six themes (in no particular order):

• Reward systems
• Appraisal systems
• Learning organisation
• Leadership capability
• Aligned mission and vision
• Attitude to change

How the organisation supports and nurtures the leadership culture is often overlooked in culture change programmes, much to the detriment of the need to fulfil the customers’ reality, (regardless of whether the customer is internal or external).

If you want to change behaviour to support the new needs of the organisation, then you must take note of the behaviours that your reward and appraisal systems promote.

For example, reward and appraisal systems support the existing (or soon to be changed) leadership culture that is in existence. If the leadership culture is not collaborative, and the reward and appraisal systems focus on individual effort then it becomes more unlikely that all of the leadership team will focus on collaboration and alignment, despite what the values or mission statement says.

In this example individualistic behaviour by the leadership culture is being supported by the organisational culture. And it is unlikely that an employee will become collaborative with the customer if they are financially penalised for doing so.

A learning organisation that is change eager, enabling all to take the right risks that support growth, whilst continuously improving, chooses to improve the leadership capability of all employees. When such an organisation supports the right leadership culture, it then becomes possible to align all stakeholders to its mission and values.

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The makings of customer reality

As mentioned, customer reality is heavily impacted by a culmination of the leadership culture and organisational culture. It is also influenced by the following six themes (in no particular order):

• Customer centricity
• Employee capability
• Autonomy in decision making
• Psychological safety
• Customer expectation
• Organisational structure and rules

Successful organisations understand that if they are to survive and thrive in this complex, constantly changing world, they must satisfy the wants of their customers

Organisations must do more than say they are customer centric; they need to support their employees to become so, which means having the right structure, rules and employee capability in place. To become truly customer centric, employees must experience psychological safety in conducting their roles. This can only be achieved, for example, if leaders are giving permission to employees to take risks, fail safely and speak out without repercussions.

A leadership culture that empowers employees to do the above is one that is supported and nurtured by the wider organisational culture. And collectively, this will have a positive impact on the customer’s reality. Without psychological safety employees are unable to demonstrate autonomy in decision making to the customer, regardless of the organisation insisting it is possible! [embed-slice:slice-21]

Successful organisations understand that if they are to survive and thrive in this complex, constantly changing world, they must satisfy the wants of their customers. Regardless of whether those customers are internal or external to the organisation, they need the right interaction between leadership and organisational culture to positively impact their customers’ reality. 

Connecting the dots of leadership, organisational culture, and customer   

When you have a strong leadership culture in place that is supported and nurtured by the organisational culture, your customers will experience a more positive and authentic reality of your organisation. One that both the organisation and the employees can be proud of. 

Interested in this topic? Read Do you need a mindset to go with your hybrid working?

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