Tuesday, 12 April 2016

The most effective leaders clash with their company's culture

Anyone will tell you that the most successful organisations have leaders who match the company culture. A CEO fixated on getting things done should lead somewhere driven by outcomes, a “mission culture”, whereas a people-focused leader suits a place focused on involvement and participation. This way everything is neat, tidy and aligned, with messages presented consistently, providing staff with reliable guides as to how to behave. But this is not what the data says in a new study published in the Journal of Applied Psychology. The new results argue that your leader shouldn’t line up with the culture – they should supply what it’s missing.

Chad Hartnell and his colleagues surveyed the management of firms within a technology consortium, asking members of 120 management teams to rate their CEOs on task leadership (e.g. “encourages the use of uniform policies”) and relational leadership (“is friendly and approachable”), and to rate their organisation’s culture on these same task and relation dimensions. The researchers wanted to find out which combinations of leadership and culture would, nine months later, show the greatest benefit in a tangible outcome: firm finances.

The data drew a gloomy picture for alignment. For relationship focus, mismatches were always better. Firms with a strong relational culture performed better when led by a leader with a low relational focus, and highly relational leaders were associated with stronger results when they operated in a culture with lower concern with relations. A similar picture emerged for task focus, where a combination of a high-focus culture and leader was the worst one possible. These associations held true even after controlling for past performance, CEO tenure and size of the firm.

Why could this be? When leader and culture are aligned, much of the leader’s efforts are redundant. When an organisation’s history of competition and high standards leads to a highly outcome focused culture, the CEO generates limited returns from focusing on task outcomes, as culture is acting as a "substitute for leadership". The job of a leader is to bring something new and needed to the table, such as a relational focus in a highly clinical culture.

Hartnell’s team point out their finding operates at a very broad level – more or less focus on people or outcomes – and that this shouldn’t be taken as querying whether leaders can ever be a misfit for a culture; clearly they can. So this study isn’t a paean to appointing disruptive contrarians, but rather, to considering the broader picture of what an organisation needs at any given time. Leaders who’ve been successful in steering their ship should reflect on whether the lessons they came to teach have now been learned, and whether it’s time to shift who they are as a leader, so they can begin to offer new ones.

_________________________________ ResearchBlogging.org

Hartnell, C., Kinicki, A., Schurer Lambert, L., Fugate, M., & Doyle Corner, P. (2016). Do Similarities or Differences Between CEO Leadership and Organizational Culture Have a More Positive Effect on Firm Performance? A Test of Competing Predictions. Journal of Applied Psychology DOI: 10.1037/apl0000083

Post written by Alex Fradera (@alexfradera) for the BPS Research Digest.

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