Corporate culture is the bedrock upon which organisations are built and sustained.
It influences how employees interact, make decisions, and ultimately, a company's success. An essential component of corporate culture is leadership, and more specifically, leadership by example.
Leadership by example is the practice of leaders modelling the behaviours, values, and principles they expect from their team members. Leadership by example is pivotal in shaping corporate culture and impact an organisation in various ways.
An essential attribute for leaders is probity - the quality of having strong moral principles, honesty and decency.
1. Setting the tone for organisational values
Leadership by example begins with demonstrating values and principles that define the organisation. When leaders embody these values in their actions, they set a precedent for the rest of the team to follow. For instance, if integrity is a core value, leaders must exemplify honesty and ethical behaviour. This, in turn, encourages employees to adopt similar values in their actions, creating a culture of trust and transparency.
Leaders must not adopt a 'do what I say, but don't do what I do' approach. In all their actions, they must ask the pertinent question of whether they will tolerate such behaviour if their employees were to do it.
2. Fostering accountability and responsibility
Leaders who lead by example show their commitment to accountability and responsibility. When employees see their leaders taking ownership of their actions and decisions, it encourages them to do the same. A culture of accountability is one where employees hold themselves and their colleagues responsible for their work and its outcomes. This sense of responsibility is instilled when leaders demonstrate it in their daily activities, whether admitting mistakes or following through on commitments.
3. Promoting innovation and continuous improvement
Leadership by example can also promote innovation and a commitment to continuous improvement. When leaders embrace change, adapt to new challenges, and seek innovative solutions, they inspire their teams to do the same. In a culture where leaders lead by example, employees are encouraged to think creatively, take calculated risks, and continually seek better ways to achieve organisational goals.
They are told that they should not do anything that will tarnish reputation. They are also expected to conduct their work decently and be aware of the social norms within the context in which they operate – the social aspect is an important part of ESG.
4. Enhancing employee engagement and satisfaction
Leaders who lead by example create a work environment where employees feel more engaged and satisfied. When employees witness their leaders' dedication, enthusiasm, and commitment, they are more likely to be motivated and inspired to contribute their best efforts. This, in turn, leads to higher job satisfaction, which is closely linked to improved productivity and employee retention.
And on the contrary, where leaders display sub-standard behaviour, employees feel embarrassed and demotivated. In the Asian context, there is a reluctance to speak truth to power as they fear victimisation. Discernment and discretion on the part of the leader should be the order of the day.
5. Improving communication and collaboration
Communication is a key element of corporate culture. Leaders who lead by example in this area promote open, effective communication. When leaders actively listen to their employees, provide constructive feedback, and communicate transparently, it fosters a culture of open dialogue and collaboration. This can break down silos, reduce misunderstandings, and improve overall teamwork within the organization.
Apart from just employees, leaders must communicate honestly with shareholders and stakeholders. We all make mistakes, but it takes a leader to admit it rather than try to justify it.
6. Strengthening employee morale and loyalty
Leaders who lead by example often command higher levels of respect and loyalty from their team members. When leaders consistently act in ways that reflect the organisation's values and principles, employees are more likely to be proud of their affiliation with the company. This pride and loyalty can boost morale and lead to long term commitment to the organisation, reducing turnover and the associated costs.
7. Driving ethical decision-making
Leadership by example can strongly influence ethical decision-making within an organisation. When leaders consistently make ethical choices, employees are more inclined to do the same. This results in a culture where unethical behaviour is
discouraged and where integrity is a central pillar of decision-making. This can help protect the company's reputation and build trust with stakeholders.
Where leaders indulge in unethical behaviour and even fraudulent behaviour, the message that is being sent is that it is alright for me to be unethical and corrupt as a leader, but I expect employees to be ethical and incorruptible.
8. Creating a culture of learning and development
Leaders who lead by example in their commitment to learning and development encourage a culture of continuous growth. When leaders prioritise their own growth and development, it sends a message to employees that personal and professional growth is valued within the organisation. This can lead to a workforce that is more adaptable, innovative, and better equipped to meet evolving challenges.
Learning and development go beyond structured training sessions, seminars and conferences. Leaders must be role models so that followers can learn and develop by observing the exemplary practices of the leader.
Beware the Malaysian proverb (peribahasa) - "bagaimana acuan begitulah kuihnya"
– the cake will turn out like the mould. And leaders are the mould.
*The writer is the chief executive officer of the Minority Shareholders Watch Group.
