Leadership Styles And Their Impact On Organization Culture & Performance

There are two critical factors that interact with each other and co-exist in almost all organizations. The mindset with which the employees in the organization will perform is highly dependent on these two factors and the culture that ends up getting created due to these factors.

The First Factor is“Collaboration”

As defined by the Cambridge Dictionary, Collaboration is the situation of two or more people working together to create or achieve the same thing.

Most companies these days have clearly defined their cultures using pillars, so that all members of the organization clearly know the behaviours and mindsets that are acceptable, and most organizations have one term like Collaboration, Partnerships, Integration, Seamlessness, etc as a part of the pillars of their value system indicating that all employees are expected to collaborate and work together for a common purpose and achieve business benefit. While the system is in place, each leader, each manager, and each individual employee defines the extent to which the collaboration takes place for the benefit of the organization.

The Second Factor is “Competition”

As defined by the Cambridge Dictionary, Competition is a situation in which someone is trying to win something or be more successful than someone else.

Most companies have put in place a system that is competitive, the infamous “bell curve”. The system is expected to ensure that each employee performs to their best potential to create the desired business impact and to stretch themselves to significant outperformance. While the system is in place, each leader, each manager, and employee defines the extent to which they are competitive — How much will they stretch and bring out the best in them for the benefit of the organization and also the benefit of their own appraisals.

Thanks to the value pillars and thanks to the performance management system, both these factors are part of every single organization and the combination of these two factors defines the DNA of its culture.

Let us look at the four different types of cultures that the possible combinations of these two factors creates. Usually, the way the leader approaches and the quantum of importance he/she gives to these factors defines the culture of the team/organization and its level of performance. The cues that are read by the teams are not just through the words in the communication by the leader but also the decisions and actions that give subtle messages crafting mindsets within the organization.

Type 1 – Sandcastles: This is the type of culture that gets created when the leader is neither appreciating & promoting collaboration, nor challenging the team to push boundaries and achieve more. Here the leader is quite indifferent, uninvolved, or lacks vision and drive. Hence the culture created is that of a sandcastle, it’s not stable and the organization/team will lead to a fall with the smallest wave of a challenge.

Type 2 – Man of the (Lost) Match: This is the type of culture that gets created when the leader is promoting a competitive feeling in the team, pushing, and driving them for innovations, higher performance. Here the leader does not recognize or reward collaboration, he/she does not suggest and indicate the advantages and synergies of collaboration. In this culture, those team members who are highly capable individual contributors will rise and deliver higher performance. However just like in the game of cricket, sometimes the team does not play on each other’s strengths, there is one batsman who hits a brilliant century, however the team loses the match since they did not collaborate well to ensure contributions by all players on the field. The big drawback in this type of a culture could be that the organization would have recruited exceptional talent, however, they are all man of the (lost) match, if the culture does not enable collaboration between these talented individuals.

Type 3 – Complacent Potential: This is the type of culture that gets created when the leader is promoting collaboration in the team. The leader in this type of culture focuses on the larger goals, however, does not address underperformance, does not differentiate performance, does not appreciate top performer, or challenge the ones not performing to their full potential. Here the attempt is to be highly cohesive, harmonious, trustful, and interdependent. The problem in this type of a culture is that there will always be high performers who do more. however, they may not be well appreciated, and at the same there would be the underperformers & the social loafers who may not be confronted to up their game. The big drawback here is that, since there is limited performance differentiation, the high performers also tend to become complacent and the organization loses agility, ability to innovate and the zeal to outperform.

Type 4 – Performing Partners: This is the type of culture that gets created when the leader is promoting both collaboration and competition. Here the leader focuses on getting the team to support each other, partner with each other, watch each other’s back, leverage each other’s strength. At the same time, the leader also challenges the team members to push their boundaries, come up with better ideas, enhance their agility, stretch their efforts, and outperform their and other benchmarks.

Depending on the existing organization culture, the business environment, the team’s capability, and the leader’s ability to influence the degree of collaboration and competition, the position of the organization within the four different quadrants will take place.

There are various elements of the organization DNA that will be impacted by each of the four types of cultures that the leader creates. These elements could be related to business performance, people aspects or ways in which the organization works, however, these are elements that the organization needs to have to be future ready.

Each of the four quadrants, i.e., each of the four types of cultures that the leader creates, will have a different level of Agility, Innovativeness, Degree of Performance differentiation, Drive to Achieve Business Goals and the Level of Trust that may exist in the organization.

Culture and its impact on Key Parameters

Sandcastles

Man of the (Lost) Match

Complacent Potential

Performing Partners

Agility

Low

High

Low

High

Degree of Innovation

Low

High

Low

High

Drive to Achieve Business Goals

Low

Medium

Medium

High

Trust

Low

Low

High

High

Performance Differentiation

Low

High

Low

High

Different organizations, different team compositions, different environmental factors and different situations may require the leader to bring about variations in the degree of collaboration and the degree of competitiveness that may be attempted by the leader to ensure that the organization meets its vision. The natural style, conscious effort, and mindfulness to understand and modify oneself and one’s leadership style will decide how quick, how long and how deep can the leader build Performing Partners in the organization.

By: Manish Punjabi

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