Why Highly Effective Leaders Believe That Culture Is Crucial to Performance


Imagine two companies with identical products, similar market opportunities, and equally talented employees. However, one company has a culture of collaboration, innovation, and openness, while the other company has a culture of inflexibility, bureaucracy, and distrust. Which company do you think will perform better in the long run? Great leaders know that the answer is the former, and that's why they believe that culture is crucial to performance.

According to a study, company culture really matters. 86% of potential employees wouldn't look for work at an organization with a poor reputation. To make matters worse, 65% of workers would likely quit their job if it received unfavorable news in the media or on social media as a result of a toxic workplace environment.

Culture is the foundation of an organization, and it provides guidance on how its people interact with each other, which clearly shows that culture is one of the important ingredients to achieving success. Cultivating a positive culture within the workplace, therefore, is paramount to unlocking an organization's potential. Leaders who cultivate such cultures prioritize human skills such as empathy, accountability, adaptability, and communication over technical skills. This means that they are always aware of their employees' needs and are committed to creating a work environment that fosters employee growth and development.

In this article, we'll explore why great leaders think that culture is so important and how they create a positive culture that drives their organizations to success.

Culture may be the greatest competitive advantage


The culture of a company can make or break its future. The reason for this is that culture may be the greatest competitive advantage a company has over its rivals, this is because a strong culture is the foundation of the company's identity and purpose. It is the driving force that shapes the way employees think, feel, and act. When a company's culture is supportive and inspiring, it leads to higher employee engagement, improved performance, increased job satisfaction, and a more positive attitude toward the company.

According to the 2021 Job Seeker Nation Report, organizational culture has remained crucial for employees regardless of the increase of remote work throughout the course of the epidemic. 86% of job hunters think culture is a "somewhat or very significant" component in their job search, with 48% describing it as "very important" (up from 37% in 2019).

"The only thing of real importance that leaders do is to create and manage culture. If you do not manage culture, it manages you, and you may even be aware of the extent to which this is happening." -Edgar Schein

Therefore, it is incredibly important for leaders to recognize the impact of culture on their organization's performance and to take steps to cultivate a positive and strong culture. Ultimately, culture is the DNA of an organization, and it is the job of leaders to ensure that it is healthy, positive, and aligned with the company's values and goals. By doing so, they can create a competitive advantage that cannot be easily replicated by their competitors and attract and retain top talent who share their values and vision for success.

It establishes the internal and external identities of your organization


Some managers and business owners may believe falsely that the only way to build a healthy workplace culture is to provide employees with additional benefits. Free meals and additional paid time off are great ways to show employees how much you value them, but more is required.

Culture defines the values and behaviors of the organization and creates a common identity and purpose for its people. It establishes the internal and external identities of your organization through the core values, purpose, and behaviors that guide your business. A strong culture can be a powerful motivator, driving employee loyalty, commitment, and engagement.

Furthermore, the internal identity created by your culture strengthens your brand in the eyes of your customers. Customers are more likely to choose your products and services over competitors when they sense that your organization's values align with their own. 

Living your organization's fundamental principles is a part of organizational culture


Living the fundamental principles of an organization is a vital part of its culture, which greatly determines how it performs and it is one of the significant contributors to a company's failure or success.

When organizations have a clear set of values and principles and employees live by them, they foster a culture of responsibility and accountability. A culture that prioritizes ethics, integrity, and respect for others contributes to employee engagement, which can significantly improve performance. Leaders who model these values and create an environment of trust and safety help foster a positive culture where employees can develop, experiment, and grow. The more clearly defined and aligned they are with their culture, the more their employees and customers will understand the organization's identity and purpose which results in a more effective decision-making process, leading to better outcomes and higher productivity. Therefore, it is important for organizations to live and embed their fundamental principles in their culture to create a thriving work environment that benefits both employers and employees.

Your culture transforms your company into a team


When employees feel like they have a sense of belonging to the company culture, they are more productive and engaged. The culture includes shared values, beliefs, behaviors, and attitudes of company team members that influence and shape the team's actions and can lead to a team that is more aligned, responsible, and efficient. A culture that promotes collaboration, feedback, and support helps change the organization into an empowered and productive team that thrives on the collective wins of everyone. And when the team collaboratively performs better the business benefits.

The culture of an organization can transform it from a group of individuals into a cohesive team united with shared goals and visions. It can help improve employee engagement, motivation, and satisfaction, leading to better performance and success for the company.


A strong organizational culture is critical to achieving high performance in any organization. Leaders must work to establish and maintain a culture that aligns with the organization's values and goals, fosters collaboration and learning, and creates an environment where employees feel supported and valued. By doing so, organizations can improve productivity, reduce turnover, and achieve long-term success.