Things were even worse than I expected.” This admission came from a new CEO at a financial services organization who was hired to transform her organization. Going in, she knew she was taking over a company that needed to change. She was aware of the organizational and cultural challenges she and her executive team would have to overcome. Even with her eyes wide open going in, she was still surprised at the severity of her organization’s problems.

After a recent series of meetings with leaders at the middle and front-line levels of her organization, she realized they lacked clarity around the organization’s new strategy. She knew she needed to align leaders to a new set of leadership expectations, create real accountability, and drive a one-company mindset across the leader population.

Unfortunately, in open and frank discussions with her leaders, she heard that her company was leagues away from achieving those goals. Her leaders told her they were stuck in silos and were unclear on how to navigate in a more complex business environment. Of more significant concern, they had no opportunities to work with colleagues across the organization to execute on shared priorities.

I could sense her frustration and anguish. As we continued our discussion, it became clear to both of us that leadership culture was going to be her number one priority. If she didn’t make it stronger, she and her executive team wouldn’t be successful.

Culture: The Number One Asset and Number One Liability

The story above would not be a disturbing one if it were rare. However, this CEO’s story is not that different from many other conversations I have had with other C-suite leaders who realize the critical importance of culture. The good news is that many CEOs today understand that it is critical. Ginni Rometty, Executive Chairman of IBM, believes that culture is a company’s number one asset.¹ In 2011, before she even became CEO of Big Blue, she spoke at a Yale CEO Summit. She told the audience that culture is a defining issue that will distinguish the most successful businesses from the rest of the pack.

Since then, I’ve seen the topic become more and more prominent. For example, in 2014, Merriam-Webster, the dictionary and reference book company, proclaimed “culture” as their word of the year.² They did so because they saw a significant spike in people going to their website to search for the definition.

I bet a lot of those searching for the definition were CEOs because, as the Gartner Group found in its research, the use of the word has increased on earning calls.³ Since 2010, when they started tracking it, culture has been the most frequently discussed talent issue among CEOs. Mentions of culture have been increasing by 12 percent annually. Gartner also found that many CEOs expect their heads of HR to both invest in and deliver on culture initiatives. However, here’s the problem: only 31 percent of the CHROs surveyed by Gartner are confident that their companies have the culture needed to drive future success.

While culture can be the number one asset for a company, it can also be a liability. For example, recent high-profile stories from companies, such as Wells Fargo, Uber, and Volkswagen, point to the price that is paid when cultures are weak and even dysfunctional. For example, in September 2015, the Environmental Protection Agency (EPA) in the United States issued a notice of violation of the Clean Air Act to Volkswagen, the German automaker. The agency found that the company had intentionally programmed diesel engines to only activate emission controls during laboratory emission testing. This resulted in no emission outputs of nitrogen oxide during testing, but up to 40 times in real-world driving. The scandal became known as Dieselgate when it was confirmed that the company had essentially rigged emission tests on its diesel vehicles to qualify them for sale in the United States. Within the first few days of the scandal becoming public, the company’s stock dropped by 30 percent. Martin Winterkorn, the company’s CEO, was at the center of the storm. Although he apologized for his company’s actions, Winterkorn claimed he did not have any direct knowledge of what happened. He vowed to find out who was responsible.

Then stories began to emerge about Winterkorn’s leadership style.⁴ He was an extremely demanding leader who put considerable pressure on his managers. Both outsiders and insiders suggested that Winterkorn may have encouraged his people to cut corners and falsify results. In April 2019, German prosecutors charged former Volkswagen CEO Martin Winterkorn with fraud. Business writers and industry analysts immediately connected the company’s actions to its culture. An article in the Financial Times said that the Volkswagen scandal showed the world how much corporate culture matters.⁵ In a recent LinkedIn article, Google’s former head of human resources, Laszlo Bock, went further by saying that failures in culture have been the single biggest destroyer of value among many companies.⁶

Many astute leaders are devoting more attention to gaining a better understanding of corporate culture and how to create a great one. Research conducted by Deloitte confirms this in their “Global Human Capital Trends 2016” report. They reported that 82 percent of CEOs and HR leaders surveyed believe that culture is a critical potential source of competitive advantage.⁷ The report also shared that culture isn’t merely an HR issue—the CEO and senior executive team should take responsibility for their organization’s culture.

So senior leaders are taking culture seriously. That’s good. However, here’s the bad news: only 28 percent of the survey respondents believe they understand what culture even is, and only 19 percent believe they have the right culture in place. These findings suggest that there is significant work ahead for all of us as leaders. So let’s get started on this important work right now.

What Exactly Is Culture?

In my work with leaders, I find that while many understand the importance of culture, few understand it tangibly. Most business leaders see culture as an amorphous thing. Many CEOs I’ve worked with describe it as “Jell-O”—something jiggly and gooey that they struggle to grasp.

One common definition of culture is “the way things are done around here.” However, that definition is incomplete. In the book The Leadership Gap, my co-author and I defined culture as the distinguishing features—the specific values, behaviors, and ways of doing things that are unique from one organization to another. An organization’s culture should differentiate it from other organizations.⁸ It is also important to understand that culture connects to values, which represent what is fundamentally critical to an organization. Values guide behaviors and decision making and, in turn, those behaviors, repeatedly reinforced through action, create culture. Culture is about expectations, what an organization values, and what it condones.

What Kind of Leadership Culture Would Enable You to Be at Your Best?

Take a moment and think of your answer to this question: What kind of leadership culture would you require for you to be at your best and make your fullest contribution as a leader? I’ve asked this question hundreds of times around the world. It’s fascinating that the answers are pretty much the same, whether I’m in Hong Kong, Zürich, Boston, Montréal, Lima, Singapore, Auckland, or Frankfurt. The same themes keep coming up repeatedly.

First off, no one has ever said to me, “Vince, I would be at my best in an environment of apathy—surround me with a group of zombies and watch me soar.” It seems a rotting of zombies doesn’t bring out the best in people. I’ve also never heard, “Vince, I want to work for a self-absorbed, narcissistic leader who is a control freak and micro-manager.” No one, it seems, thrives working for this kind of superhero leader. Finally, no one has ever said, “Vince, I would be at my best in a hypercompetitive cut-throat culture, where every day I can count on my colleagues to be there to stab me in the back, sabotage me, or throw me under the bus.” It seems a stable of thoroughbreds doesn’t inspire us, either. Do you know what people do say instead? Here are the top three answers:

• “I will be at my best in a climate where leaders have real clarity about the value they must bring.”
• “I will be at my best when there’s a deep commitment to the organization and to being the best possible leaders we can be.”
• “I will be at my best in a climate where there is high trust and mutual support among leaders.”

After years of asking the question repeatedly and getting the same answer from leaders in all sectors, at all levels, and in different countries, it seems we already know what a strong leadership culture looks like. People want to be part of what I call a community of leaders. And it’s no surprise we crave community at work—we are hardwired for it as humans.

In The Leadership Contract, I introduced 10 characteristics of a community of leaders. Leaders often ask me for the origin of these characteristics. Well, they emerged in hundreds of conversations with leaders like you and are grounded and validated in my client work. Initially, I began with a much longer list. But as I continued to discuss, reflect, and test out this list with senior executives, the original list became more focused. The image (see Figure 6.1) presents the top 10 characteristics of a strong community of leaders.

Imagine for a moment what it would be like if you were part of a community of leaders with these 10 characteristics. Imagine you and your fellow leaders were all genuinely aligned to the vision and strategy of your organization, with no one working at cross-purposes. Imagine if there was a real sense of collaboration that enabled innovation to flourish. What if all the leaders in your organization showed up every day fully committed to being the best leaders they could be? What if leaders supported one another to achieve higher levels of personal and collective performance? All of this would be a game-changer for you, your colleagues, and your company. I believe a community of leaders is the real missed opportunity in organizations today. If there is anything I know for sure after a couple of decades at this work, it is this: If you can create a strong community of leaders in your organization, it will become your company’s ultimate differentiator.

There are some essential reasons why we need a community of leaders right now. As we explored earlier in the book, the world in which you are leading will continue to become more complex. No one person will have all the answers. You will need to be good at tapping into the experience and expertise of people from across your organization. You will need to be even better at coming together to build teams, get important work done with people from around the world, and deliver extraordinary results.

Companies desperately need communities of leaders that create a strong leadership culture. At the same time, people desperately want to be part of strong communities of leaders. Many leaders I talk to struggle with the isolation and loneliness of their roles. They feel disconnected. They aspire for something more—a greater sense of connection and community.

Gina Bianchini, founder and CEO of Mighty Networks, brings an interesting perspective based on her years in creating online communities. Her company is a technology leader in ushering a new era of creative business built on community. My team and I participated in one of her company’s community design courses a while back. During one session, Bianchini spoke passionately about what all thriving communities have in common. First, there is a joy that comes from being part of something bigger than yourself. You do not feel isolated or lonely; you feel connected to something truly meaningful and important. Second, when pursuing a common goal with others, we can take on work challenges and overcome obstacles that others cannot do on their own. Third, there is also the joy that comes from building skills, and getting better every day. Finally, successful communities provide their members with permission to be vulnerable as they navigate challenges together.

Dr. Henry Mintzberg of McGill University has also written about the need for community at work.⁹ In an article in the Harvard Business Review, Mintzberg wrote:

Individualism is a fine idea. It provides incentive, promotes leadership, and encourages development—but not on its own. We are social animals who cannot function effectively without a social system that is larger than ourselves. This is what is meant by “community”—the social glue that binds us together for the greater good.

He continued by saying that community means caring about one’s work and one’s colleagues, and then being inspired by this caring.

The research supports the idea that having a strong community of leaders will be critical. Earlier in this book, I shared findings from a study done by consulting firm Willis Towers Watson. It’s worth repeating here briefly. They found that when employees perceive managers and senior leaders as working well together, in an aligned and supportive manner, their personal engagement jumps to 72 percent.¹⁰ However, when employees don’t see managers and their senior leaders aligned and working well together, their sense of personal engagement drops to 8 percent. How your leaders show up, not just at an individual level, but collectively, really matters. It shapes culture by driving the engagement of employees.

Glassdoor, in a survey of 615,000 users, found that although compensation is a driver of employee satisfaction, two other factors are critical to consider: workplace culture and values, and the quality of senior management.¹¹ Once again, we see the connection between culture and leadership emerging. When it is strong, employees feel it.

Let’s keep going and explore each of the 10 characteristics of a community of leaders in more depth.

A Community of Leaders—the Current State

A few years ago, I learned through my global research on leadership accountability the troubling fact that only 27 percent of the organizations surveyed believed that they had a strong leadership culture in place. Fewer than one in three. Since that time, I’ve conducted other research to get a sense of the current state of organizations and their communities of leaders.¹²

The first question we asked was: How important is having a strong leadership culture to the success of your organization? Respondents were asked to rate the question with the following scale, where 1 = not at all important and 5 = critically important. Take a moment and give your organization a rating.

Organizations Are Not Confident They Have the Leadership Culture They Need

We found that 89 percent of respondents said that having a strong leadership culture was critically important. When we combined the 4 and 5 ratings, the overall average jumped to 96 percent. This essentially means that pretty much all organizations believe that having a strong leadership culture is critical to their success. The second question we asked was: How confident are you that your organization currently has a strong leadership culture in place? This time respondents were asked to rate the question using the scale 1 = not at all confident to 5 = extremely confident. Once again, how would you rate this question for your own organization? Only 7 percent of survey respondents said they were extremely confident. When we combined 4 and 5 ratings together, that number jumped to 33 percent. Either way, confidence levels are low and suggest that organizations must do more to build strong leadership cultures in their organizations (see Figure 6.2).

A Community of Leaders—a Snapshot of the 10 Characteristics

We then asked respondents to rate each of the 10 characteristics of a community of leaders on another five-point scale, 1 = extremely weak to 5 = extremely strong. Here’s what we found (see Figure 6.3).

Let’s spend some time discussing each of these characteristics, in order of strength, as they appear in Figure 6.3. I’ll share comments that have most frequently emerged in my discussions with leaders to provide more in-depth insights.

1. Leaders celebrate success and key milestones. This characteristic always gets a tremendous reaction from leaders. Some have commented that many leaders spend too much time celebrating and not enough time delivering results. Others have said that this is a big missed opportunity within their companies because they do not do enough of it. This characteristic connects closely to employees’ level of engagement. If employees don’t have opportunities to pause, see when the company is winning, and celebrate those wins, their engagement is eroded.
2. Leaders demonstrate resilience and resolve in the face of adversity. When discussing this item with leaders, they often speak with pride. Whenever there is a crisis, they seem to be able to put their differences aside and come together to lead. But many astute leaders see this not as a strength, but rather as a sign of weak leadership. Their rationale is that if leaders only come together in times of crisis, then they aren’t leading. If your leaders need a crisis to lead, then you do not have a genuine community of leaders.
3. Leaders are clear on the strategic direction of the organization. It’s so vital for leaders to be clear on the strategic direction of their companies. We already explored this earlier in this book. Without that clarity, nothing happens. But there’s more—leaders must not only be clear themselves, but they must also bring clarity to the people they lead. In this regard, organizations are less confident. Most leaders I’ve talked to also shared that a 3.67 out of five isn’t a strong result at all. One CEO said, “To me, this number needs to be a 4.5 or greater.”
4. Leaders create excitement about the future. This characteristic is an increasingly important expectation that CEOs and other executives have for their leaders. They understand it’s their role to create excitement, but they need to be able to rely on other leaders and managers in the organization to do the same. What was clear in my discussions is that this can’t be an artificial or fake type of excitement, but a fundamental sense of optimism about the company and its future. This is how leaders inspire others. If you are excited about the future, then chances are your team will be, too. Again, given the mediocre rating, leaders see a lot of opportunities to be better in this area.
5. Leaders support one another; they have each other’s backs. All leaders believed that this item is critical to their success, and while they see some strength in their organizations, it’s uneven and unbalanced. It was clear from my discussions on how pivotal the executive team is in setting the tone for the rest of the organization. If they support one another and genuinely have each other’s backs, then everyone will see it and model it. Few executive teams can set the right tone in this regard. They don’t typically have each other’s backs; this is both a challenge and a significant opportunity for senior teams.
6. Leaders share a common aspiration to be great as leaders. Given how many people said their companies had a large gap here, I would have expected a lower rating. Nonetheless, it seems companies can still be much stronger in setting clear expectations of their leaders and holding them to higher standards of behavior. Companies must decide to build the best leaders in their industry.
7. Leaders break down silos and collaborate effectively. Again, it is clear that many leaders are heads-down, stuck in silos. They are building walls rather than tearing them down. Collaboration doesn’t happen, or if it does, it is downright painful. A McKinsey survey found that 83 percent of CEOs believe their organizations have silos and 97 percent state that silos have a negative impact.¹³ Gillian Tett, the author of the book The Silo Effect, says that silos can create a kind of tunnel vision that causes people to do stupid things and make bad decisions.¹⁴ Silos are a significant barrier to building a strong leadership culture where leaders work together to drive results.
8. Leaders keep internal politics and personal agendas to a minimum. Of all 10 characteristics, this one had the most significant divergence in perspectives. Some companies believed that internal politics and personal agendas consumed most of their leaders’ time. Others (albeit a small number) thought they had built a culture in which leaders prioritized what’s best for the company ahead of their self-interest.
9. Leaders lead with a united front and a one-company mindset. Many CEOs I talk to desperately want to see strength in this characteristic. Unfortunately, they often do not. They say that too many of their leaders focus their energy on their silos, whether that’s a function, department, line of business, or division. Sometimes they do so at the expense of the company’s broader goals.
10. Leaders hold each other accountable by calling out unproductive leadership behavior. This last characteristic is the lowest-rated item. What’s fascinating is that it was also the lowest-rated item in my global leadership accountability survey. Moreover, in all the discussions, leaders said this was going to be critical in the future. It seems leaders do a better job of holding others accountable in a boss-employee relationship, than in employee-to-boss. But, the largest gap that exists is in peer-to-peer feedback—this is the real challenge. I have learned that this rarely happens in most organizations. Given the degree of teamwork, collaboration, and cross-functional projects leaders will need to accomplish in the future, we will all need to be stronger at being open to feedback and demonstrating courage to hold one another accountable.

Look back over this list of the 10 characteristics of a strong leadership culture. How does your organization measure up? How much more could you accomplish if your organization scored high on all 10 of these characteristics?

Final Thoughts

When I find myself in a big city during a business trip, I engage in a little practice. I take a few minutes to look up and see what’s around me. Sometimes, I see skyscrapers in the central business district of a major city. Other times, I see a building in an industrial park or a large manufacturing plant. I always wonder about the people inside and consider what world they have created for themselves. Are their days filled with constant drama, infighting, and petty politics? Or have they created a fantastic culture where everyone is fully committed to driving extraordinary results? The interesting thing is, whatever the answer is, I know that they have created their own worlds. We need to understand this about leadership culture—we can create it. We do not have to settle for a weak, poor, or even dysfunctional culture. We can have the aspiration to create a great one and set an inspiring tone for all employees.