What really shapes company culture? Employees learn far more from what leaders do, reward, tolerate, prioritize, and ignore than from formal values statements. Everyday experiences—from how disagreement is handled to who gets promoted and how leaders respond to mistakes—send signals about how an organization actually operates. Pasted markdown
Changing culture therefore requires more than announcing new values. Leaders need to examine the behaviors and incentives reinforcing the existing culture, equip managers with context, communicate through difficult moments, and consistently demonstrate the behaviors they want employees to adopt. Over time, changing those signals can change expectations, behavior, and ultimately the culture itself.
If you ask an executive about their company culture, they’ll probably start by listing the values from the company website or by telling you about the employee commentary at the latest All Employee Meeting.
But if you ask an employee the same question, you might very well hear something very different. Especially if you do it in a small forum and get some candor.
Employees might instead be talking about what happens if someone challenges the boss in a meeting, or whether sharing bad news leads to blame or a thank you. They notice which behaviors lead to promotions, if senior leaders admit mistakes, and how quickly people forget the stated values when things get tough.
I’ve worked in some very large organizations during times of big change, like Microsoft’s transformation to Office as a service and T-Mobile’s Uncarrier turnaround and $26 billion merger with Sprint. These experiences showed me clearly how company culture isn’t shared through just one channel.
Employees are constantly collecting signals from many, many sources about how an organization really operates. What its culture really is, and what it’s not.
Some signals are obvious. Others are so small that leaders may not even realize they’re sending them. But employees notice, and those signals eventually impact reputation management and how the organization appears to the public.
Over time, these signals matter more than any list of company values or the latest company meeting because they answer the real question employees have: How do things actually work here?
What Do Employees Notice That Leaders Often Miss?
Leaders experience the company culture differently from most people. By the time you’re in a senior role, information is filtered before it gets up to you, and problems often pass through several layers of management first.
Employees, on the other hand, see things up close.
They see who gets interrupted in meetings, whether managers ask for feedback, whether managers get defensive or are responsive, and if someone who consistently treats others poorly still gets promoted because of their results.
But employees also pick up on the positive signals.
They see when a senior executive gives credit to the team, when a manager admits, “I got that wrong,” or when a leader makes time for questions, even with a busy schedule.
Individually, these moments may seem insignificant, but they teach employees which behavior the organization values. Our teams are watching.
“One of the mistakes I often see leaders make when thinking about company culture is focusing primarily on what they intentionally communicate, forgetting that culture is also shaped by what people observe every day. You’re teaching people about your organization all the time, whether you intend to or not.”
What Does Your Organization Reward When Nobody Is Talking About Values?
If you want to understand a company’s culture, pay attention to what gets rewarded.
“Employees quickly spot the gap between stated values and real incentives. No matter how well your mission statement is written, if it doesn’t match what’s happening, employees will notice and point it out.”
You can talk about innovation, but if failure carries a major career penalty, people will become more conservative, and that can stifle innovation elsewhere.
You can say people are your greatest asset, but if tough decisions always put employees last and are done in the dark, they’ll remember.
This doesn’t mean organizations shouldn’t make hard decisions. Put simply, that’s just part of business. The cultural signal often comes from how you make and communicate those choices.
People can accept tough decisions and still respect the company. They’re often more understanding than we think. What’s harder is when a company acts against everything it says it stands for.
What Happens to Company Culture When the Pressure Goes Up?
I’ve always thought that crises reveal a lot about leadership, and about company culture, too.
Things in the business can be going well, then something goes wrong, and suddenly, you get to see which parts of the culture are real as they’re being put to the test.
I’ve been through enough high-pressure situations to know that employees pay extra attention to leaders during those times.
At T-Mobile, we went through a big transformation as we prepared to close the Sprint merger, and in the months afterward as we brought the companies together. A merger like that isn’t just about finances or operations. It’s about bringing together people with different backgrounds, expectations, habits, and ways of working, and keeping the business working.
During transformations like that, employees aren’t evaluating culture based on what appears on an integration slide. They’re watching to see whether the promises made during the merger show up in the day-to-day workflow.
What Does Leadership Attention Tell Employees?
One of the most underrated cultural signals is attention.
I’ve sat through countless executive meetings over my career, and I’ve seen how onto the fact that what gets discussed repeatedly tends to get managed more aggressively.
If customer experience comes up in every important conversation, people understand that customers matter.
If reputation only comes up once there’s a problem, people learn something from that, too.
The same is true of employees. Leaders can say employees are important, but employees pay attention to whether their concerns actually make it into the rooms where decisions happen. You may say they’re important, but do they feel important?
This is one reason I’ve always believed communications leaders need to be involved early in major business decisions.
A good communications executive isn’t just there to workshop the press release. They’re thinking about the people who aren’t in the room.
Employees. Customers. Investors. The media. All the stakeholders whose collective opinions can make or break the company culture.
Because what leaders consistently pay attention to eventually becomes part of the company culture. And so does what they consistently ignore.
How Much Does the Behavior of Senior Leaders Really Matter?
There’s an old idea in communications that actions speak louder than words. It may be overused, but it remains particularly relevant to company culture.
Senior leaders are highly visible inside organizations, even when they don’t realize it.
Employees see how executives treat assistants, junior employees, restaurant staff, drivers, customers, and each other.
They notice who takes responsibility when something fails and who takes credit when something succeeds, and whether the behavior tolerated at the top would be tolerated anywhere else.
And because leaders have power, their behavior has an amplifying effect.
“I’ve worked alongside some remarkable leaders throughout my career. The best ones didn’t build credibility just by delivering a perfect speech at a town hall. It was built through consistency in the hallways, in the cafeteria, or at a mix-and-mingle with the team. What they said always matched what they did.”
How they behaved privately wasn’t radically different from how they presented themselves publicly. And when circumstances became difficult, the principles they talked about didn’t suddenly disappear.
That consistency is enormously valuable, but it also takes time to build. However, when you’ve taken the time to really craft a reputation with authenticity and intention, it shows, and it reflects directly on the organization you’re leading.
How Do Middle Managers Translate Culture Into Everyday Experience?
Senior executives may set the tone, but for many employees, their manager is the culture.
That’s why middle managers shouldn’t be overlooked when discussing how to maintain a company culture.
Managers turn broad organizational ideas into daily experiences.
They’re the people who explain decisions, answer questions, give feedback, recognize good work, resolve conflicts, allot opportunities, and decide how much autonomy employees receive.
And yet, organizations sometimes expect managers to perform this role without giving them enough context themselves.
I’ve seen what happens when leaders communicate a major decision, and managers hear the details at essentially the same time as everyone else.
Now those managers are expected to answer questions they haven’t had time to process themselves.
Sure, that’s a communications problem, but it can quickly turn into a cultural one, too.
If you want managers to model the company culture, they need to understand what leadership is trying to build and why.
They also need enough trust and information to translate it authentically rather than simply repeating a corporate script passed down to them from the corner office.
What Do Leaders Communicate When They Say Nothing?
I’ve written before about communication debt and the cost organizations incur when important conversations keep getting postponed.
The cultural dimension is just as important.
When leaders don’t address something everyone else is discussing, employees notice.
When a major change happens, and nobody explains why, employees notice.
Silence doesn’t create neutral space. It just creates a gap for people to interpret the context themselves, often incorrectly.
They may decide leadership doesn’t know what’s happening. Or knows and doesn’t want to tell them. Or simply doesn’t think they need to know.
Sometimes leaders can’t disclose information. But “I can’t tell you everything right now” is different from pretending nothing is happening.
Employees don’t expect executives to have an answer to every question. Still, they do expect some indication that leadership understands the question exists and that information will become available in due time.
Building a culture on secrets isn’t a great strategy. You won’t always be able to tell employees everything, but you can usually tell them something.
Can You Change Company Culture by Changing the Signals?
You can absolutely change your company culture, but not overnight.
One of the reasons culture transformations fail is that organizations focus heavily on announcing the culture they want and not enough on changing the conditions that created the existing one.
New values aren’t enough if the same behavior keeps getting rewarded.
A new leadership message isn’t enough if managers operate exactly as they did before.
If you want to change company culture, look for the signals reinforcing the culture you already have.
What gets leadership attention?
What happens when someone makes a mistake?
Are managers given context or just talking points?
Whose opinions carry weight in important decisions?
Those questions are less exciting than unveiling a new set of corporate values, but they’re far more insightful.
From there, you start making changes.
If you say you want people to take intelligent risks, show what happens when a thoughtful risk doesn’t work.
If you want greater candor, demonstrate that someone can disagree with leadership without damaging their career.
If you want employees to trust leadership, communicate when the news is difficult, not only when there’s something to celebrate.
Over time, those signals begin to change what people expect from the organization. Once expectations change, behavior usually follows, and the culture shifts.
What Is Your Company Teaching People Without Realizing It?
When executives ask me how to improve their culture, they’re usually looking for something new to add.
But sometimes the more revealing place to start is with what already exists. Pay attention to how the daily workflow moves, how employees and managers interact, and what the general behavior looks like.
There’s probably more information about your real company culture in those moments than in any employee handbook or values statement.
I’ve seen organizations navigate growth, transformation, leadership changes, reputational pressure, and major combinations of businesses and teams.
The details might change from one company to another, but the core idea remains the same.
People watch what leaders do and change their own behavior to match.
That’s why culture isn’t just what leaders say they want.
It’s what people learn every day about what the company rewards, tolerates, prioritizes, and believes.
If you want to understand your company culture, start there.
Frequently Asked Questions (FAQs)
1. What are the biggest factors that shape company culture?
More than formal values or policies shape company culture. Leadership behavior, management practices, communication, incentives, promotions, decision-making, and the behaviors an organization rewards or tolerates all influence how employees experience the culture. Small, repeated signals often tell employees more about an organization’s real priorities than its stated values.
2. How does leadership behavior affect company culture?
Leadership behavior establishes expectations for how people operate throughout an organization. Employees pay attention to how leaders make decisions, respond to mistakes, handle difficult news, treat colleagues, and behave under pressure. When leaders consistently model the values they promote, they can strengthen trust and reinforce the desired company culture.
3. Why are middle managers important to company culture?
Middle managers translate an organization’s broader values and leadership expectations into employees’ everyday experiences. They communicate decisions, provide feedback, recognize performance, manage conflict, and determine the level of autonomy employees have. Because employees interact with their managers more frequently than senior executives, managers can have an outsized influence on workplace culture.
4. How can leaders identify problems in their company culture?
Leaders can identify cultural problems by looking beyond employee surveys and examining what actually happens throughout the organization. Consider which behaviors are rewarded, how employees respond to mistakes, whether people feel comfortable disagreeing with leadership, how quickly bad news reaches executives, and whether stated company values align with everyday decisions.
5. How can an organization successfully change its company culture?
Changing company culture requires changing the behaviors and signals that reinforce the existing culture, not simply introducing new values. Leaders should examine incentives, management practices, communication, decision-making, and accountability. Sustainable culture change happens when employees repeatedly see evidence that the organization’s expectations and behaviors have genuinely changed.
