"Leading by Leveraging Culture"

Jennifer Chatman and Sandra Cha

California Management Review

Summer 2003, pp. 20-34

The authors of this article state that although leveraging culture is only one of a number of key leadership tools, "by actively managing culture, an organization will be more likely to deliver on its strategic objectives over the long run." The authors identify three criteria for using culture as a management tool: The first criterion is that it must be strategically relevant: "An effective culture is closely related to business strategy. Indeed, a culture cannot be crafted until an organization has first developed its business strategy"; The second criterion for using culture as a leadership tool is that it be strong: "Strong cultures are based on two characteristics, high levels of agreement among employees about what's valued and high levels of intensity about these values"; The final criterion involves the content of organizational culture: "Strong, strategically appropriate culture performed effectively over the long run only if their culture also contained norms and values that promoted innovation and change."

As far as how leaders can develop, manage, and change their culture to meet these criteria, the authors provide 3 tools:

1. Recruit and select people for culture fit: "It makes sense to hire people who will fit the culture, possibly even trading off some immediate skills necessary for the specific entry job for better culture fit. People can learn new skills; establishing culture fit is much harder"
2. Manage culture through socialization and training: "Two key aspects of socialization are ensuring that employees acquire cultural knowledge and that they bond with one another"
3. Manage culture through the reward system: "Culture is an organization's informal reward system and needs to be intricately connected to formal rewards."

The authors conclude by saying: "One thing is guaranteed: A culture will form in an organization, a department, and a work group. The question is whether the culture that forms is one that helps or hinders the organization's ability to execute its strategic objectives. Organizational culture is too important to leave to chance; organizations must use their culture to fully execute their strategy and inspire innovation. It is a leader's primary role to develop and maintain an effective culture."

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