Matt Tenney, Contributor

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Company culture may be the most complex aspect of running a business.  

There are an almost endless number of variables to consider when trying to get a group of people to work together in a way that has a positive impact on people’s lives and consistently produces great results.

In order to make the biggest, positive impact on company culture in the least amount of time, it is essential for leaders to identify and focus on the most important element of the organization’s culture.

The most important part of a strong company culture is having a senior management team that truly cares about employees, and consistently demonstrates that care, because every other aspect of company culture is improved when the senior management team consistently puts people first.

In this article, we’ll explore why a caring senior leadership team is so essential.  

Along the way, we’ll include some examples of what caring leadership looks like, and some simple ideas for quickly improving in this area.

Why Caring Leaders Are So Important For Company Culture

At the most basic level, an effective company culture is one in which people work together well to achieve a common goal.

There is no question that company culture is just as important as strategy, if not more important.

A company can have the best strategy in the marketplace.  However, if the people in the company don’t work well together to execute on that strategy, it is of little value.

All other things being equal, strong company culture will create the best conditions for high-level execution and thereby result in better performance.

In a company culture where mistrust, anxiety, fear, burnout, and ambiguity are common, high levels of performance are not possible for long.

However, in a company culture where people feel safe because trust, cooperation, service, and care are the norm, the synergistic effect of people working together is incredibly powerful.

Such a strong culture is only possible if the senior leadership team consistently operates with high levels of trust, cooperation, service, and care for team members.

As Daniel Goleman wrote in Primal Leadership, research suggests that this is true even in organizations in which senior leaders rarely interact with people outside the leadership team.*

Also, when the senior management team doesn’t want to take good care of employees, or lacks the ability to consistently do so, they are less likely to put in the work necessary to build and sustain a company culture that facilitates sustainable performance.

Although these leaders may focus on creating a culture of accountability, if they don’t spend equal time building a culture of trust, cooperation, service, and care, performance and accountability will gradually deteriorate.

When the senior management team consistently makes the well-being and growth of team members a top priority, efforts to create a great work environment naturally flow forth from the genuine aspiration to add value in the lives of employees.

Below is an infographic that captures this idea in the form of an image.

Following that is a deeper exploration of why caring leadership is the most important part of a strong company culture. 

How Caring Leaders Create Operational Excellence

Operational excellence is one of the most important elements of a strong company culture.

Clearly, an organization can’t survive long if it lacks the ability to execute on a day-to-day basis.

Accordingly, most, if not all, business leaders recognize the importance of operational excellence, and spend ample time working to create and sustain such excellence.

However, the motivation for operational excellence is different among senior leaders who consistently make the well-being and growth of team members a top priority, and those who do not.

Senior leaders who do not consistently prioritize people ahead of short-term profit tend to be motivated by what’s best for themselves, or by short-term benefits for the organization.

This tendency results in either consciously or unconsciously neglecting team members, as leaders are more likely to sacrifice the well-being of employees for short-term gain.

This, of course, results in a gradual decline in operational excellence as team members gradually become less engaged, less trusting, and burnt out.

When senior leaders truly care about the well-being of employees, the motivation for operational excellence is different, and it’s more sustainable both for the leaders and the team members.

For caring leaders, the motivation for operational excellence is the fact that a culture of excellence is better for everyone.

Leaders work to bring out the best in employees not because they want to extract more value from the employees, but because helping people be the best version of themselves possible is what’s best for them, both now and in the long term.

Ironically, this focus on serving instead of extracting value tends to inspire peak performance that results in employees creating tremendous amounts of value.

Caring leaders also know that people will be happier on a team that is consistently excellent than on a team that is consistently mediocre.

Because of this subtle difference in focus, the conversations caring leaders have with team members about performance tend to be helpful and inspiring.

And, they tend to create cultures of operational excellence that are much more sustainable than do companies in which senior leaders focus on short-term gain.

Why Caring Leaders Fuel A Compelling Vision and Mission

One of the most important elements of a strong company culture is a vision of the future that inspires people.

For example, at Tesla, employees don’t come to work just to build batteries, or design cars, or to make sales, they come to work “To accelerate the world’s transition to sustainable energy,” ostensibly to help realize the vision of a world in which all energy consumed is sustainable.dvOne of the most important elements of a strong company culture is a vision of the future that inspires people.

At the software  company, Asana, people don’t come to work just to write code, make sales, or provide customer service, they come to work “To help humanity thrive by enabling all teams to work together effortlessly.”

When employees can see how their work is contributing to a noble cause – something much bigger than simply “hitting the numbers” – they are more inspired to come to work and to go the extra mile.

Unfortunately, when senior leaders don’t have the aspiration or ability to consistently make the well-being and growth of team members a higher priority than short-term financial goals, they are highly unlikely to take the time necessary to clarify, and consistently and effectively communicate, a compelling vision for the future.

Conversely, when senior leaders do make the well-being of employees a top priority, they know that one of the most important things they can do to make work more fulfilling for team members is to not only clarify and effectively communicate an inspiring vision, but also help every team member see how their work is connected to realizing that vision.

Why Caring Leaders Clarify And Live Inspiring Values

Assuming that a company has clarified and consistently communicated a compelling vision and mission, it is very important to clarify, communicate, and live values that guide the decisions of team members while working to realize the vision, and create a healthy work environment for doing so.

When senior leaders don’t have the aspiration or ability to consistently make the well-being and growth of team members a higher priority than short-term financial goals, they may take the time to clarify values, but those values are often just a facade.

The values remain proudly hung from the walls, but senior leaders tend not to live them consistently and/or communicate them effectively. 

As a result, other team members often don’t know what the values are or how to apply them in decision making.  Of course, this renders those values useless.

When senior leaders do consistently prioritize the well-being of team members ahead of short-term financial goals, they are much more likely to invest the time and energy required to ensure that values are clearly and consistently communicated, and easily measured.

These leaders not only hire and fire based on alignment with the core values of the organization, they hold themselves accountable to being living examples of those values every day.

Why Caring Leaders Empower Employees

In a company culture where employees feel that they are empowered, and have high levels of autonomy, employee engagement soars, as does the financial performance of the organization.

An LRN study cited in this Harvard Business Review article found that companies offering high levels of autonomy financially outperformed low-autonomy companies by 10 times in the short term, and nearly 20 times in the long term.

Leaders who genuinely care about employees work to extend authority and autonomy to employees because they know that giving people as much autonomy as possible significantly improves the employee’s fulfillment at work, thereby enriching their lives.

Leaders who genuinely care about employees work to extend authority and autonomy to employees because they knowLeaders who are more focused on short-term goals tend to find it hard to extend authority and autonomy to people because they worry that short-term goals might fail to be met if they don’t micromanage employees.

How Caring Leaders Foster Healthy Communication

Most leaders recognize the importance of good communication for achieving high levels of performance.

Ineffective communication results in ambiguity and mediocre work.

Senior leaders who are focused on short-term results tend to think of communication from only the pragmatic perspective of how to get work done most efficiently.

However, this perspective misses an equally important element of communication, which is the emotional impact on employees.

When people don’t feel heard, or when things are communicated unskillfully, there can be an immediate, negative impact on the emotional well-being of team members, and potential long-term impacts if the communication is not improved.

This, of course, results in reduced productivity for the team member.  It is well-established that people are much less productive when emotions like frustration or anxiety are prevalent.

To a caring leader, the issue of team members experiencing negative impacts on their well-being as a result of coming to work is just as important as performance (if not more so).

This is why caring leaders devote time and energy to becoming better listeners and communicating in ways that have a positive impact on the emotional state of team members.

They also work to improve not just the efficiency of communication, but the abilities of team members to communicate in ways that are helpful, constructive, and create a positive impact on all involved.

How Caring Leaders Show Appreciation

Another essential element of a strong company culture is appreciation.

Feeling appreciated is a core human need.  

When people don’t feel appreciated, they tend to gradually become disengaged.

When people do feel appreciated, they tend to flourish.

Most senior leaders are aware of the importance of appreciation.

However, when leaders are more focused on short-term financial goals than people, they tend to see appreciation as just one more thing they “need to do” to check the box for having a strong culture.

As a result, appreciation tends to either not happen at all or, when it does happen, it is untimely and generic, and thus very ineffective.

When leaders are more focused on serving and taking good care of employees, they tend to offer appreciation that is timely and personalized, and thus much more meaningful and effective.

A sense of appreciation for people flows naturally from caring leaders as another form of demonstrating care.

Why Caring Leaders Create A Growth Environment

Another core human need is to experience continuous growth, both professionally and personally, and this is an essential element of a strong company culture that drives high levels of employee engagement.

When leaders are too focused on the short-term, they often fail to invest resources in the professional development of employees.

When experiencing a downturn in revenue, training is one of the first cuts often made by leaders focused on the short term.

Leaders who are more focused on serving and taking good care of employees tend to invest a lot of resources in helping employees grow both professionally and personally.

While they certainly know that this is a great long-term investment in the organization as a whole, they also realize meaning and satisfaction from helping employees become the best human beings they can be.

Creating A Habit Of Caring

Senior business leaders are often under tremendous pressure to hit short-term financial goals.

Thus, even when leaders truly want to put people first it can be very difficult to actually do it.

In order to become more resilient to the pressure, leaders need to find ways to consistently spend more time thinking about how to better serve and care for employees, and developing habits for actually demonstrating that care.

By taking time each day to think about the elements of company culture listed in this article, and the motivation for improving those elements of the culture, leaders can gradually build new habits of executing on these ideas.

These new habits can help build resilience to the pressure to focus on the short term, and thereby help leaders create company cultures that have a positive impact on the lives of employees, and are thereby better able to attract and retain great people who are highly engaged and deliver great results for the customer and the organization.

* Wallace Bachman, “Nice Guys Finish First: A SYMLOG Analysis of U.S. Naval Commands,” in The SYM-LOG Practitioner: Applications of Small Group Research, eds. Richard Brian Polley, A. Paul Hare, and Philip J. Stone (New York: Praeger, 1988).


Matt Tenney is the founder of PeopleThriver and The Generous Group, two companies that aspire to create the best workplace cultures in the world.  Matt is also the author of Serve To Be Great: Leadership Lessons from a Prison, a Monastery, and a Boardroom, and The Mindfulness Edge: How to Rewire Your Brain for Leadership and Personal Excellence.  Matt is frequently invited to present keynote speeches at leadership conferences and meetings.  His TEDx Talk has been viewed over 1,000,000 times since January, 2020.

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