The Importance of Leadership in Shaping and Sustaining Culture

Culture is the heartbeat of an organization. It determines how teams and employees interact, make decisions, and ultimately, how successful a company becomes. But culture doesn’t develop on its own — it is shaped, nurtured, and sustained by everyone in the organization, starting with the leadership. The way leaders act, communicate, and make decisions directly impacts the environment they create, influencing whether employees feel motivated, valued, and engaged.

Leadership Sets the Tone

Every organization has a culture, whether it’s intentional or not. Leaders define the values, behaviors, and norms that become embedded in everyday work life. When leaders model integrity, transparency, collaboration, and respect, these values naturally cascade through the organization. Employees take cues from leadership, mirroring the behaviors they see reinforced through different forms of rewards and recognition.

During my first two weeks at a company renowned for its open culture — built on transparency, freedom, collaboration, and courage — I witnessed a powerful example of leadership in action.

When then-CEO announced a new C-level appointment, the company’s internal memo-list, a platform where employees at all levels could freely engage, erupted with discussion. Within minutes, colleagues from around the world, across different functions and seniority levels, openly questioned the CEO’s decision: What are this person’s credentials? Who was on the interview panel? What will this role focus on?

As a newcomer, I was taken aback — How would leadership respond? Would these questions be welcomed or seen as a challenge? What role should HR play here? But just as quickly, I saw something remarkable — leaders at the highest level, including the CEO, responded openly and thoughtfully, addressing every question with clarity. More voices from different parts of the organization joined in, offering insights and clarifications. There was no judgment, no repercussions — only transparency and engagement.

This was culture in action. The leadership didn’t just encourage open dialogue; they lived it, creating an environment where employees felt safe to challenge decisions, even at the highest levels. This moment shaped my understanding of what true open leadership looks like. When leaders walk the talk and create an environment where employees feel empowered to challenge, question, and contribute, it fosters a culture of trust, innovation, and accountability. 

The reverse is also true if leaders are exhibiting inconsistent behaviors, lack of accountability and rewarding actions that are not aligned with the core values. These will send mixed messages to the employees and a negative culture can take hold just as quickly. Employees may mirror the poor behaviors and values, or disengage as they become unsure of what it takes to be a performer in their leaders' eyes. Before you know it, trust may erode and performance suffers. Leadership sets the tone, for better or worse.

Culture is a Dynamic Asset

A strong organizational culture isn’t built overnight, and it certainly isn’t a one-time initiative. It’s a continuous process that evolves with the organization. Effective leaders understand that culture must be nurtured and adjusted as business needs, market dynamics, and workforce expectations change.

Especially in times of transition — such as organizational restructuring, rapid growth, or external market challenges — leaders play a crucial role in maintaining cultural stability. They provide direction, reinforce core values, and create an environment where employees feel secure and motivated, even in uncertainty. When leaders focus their efforts in tackling the changing business environment and neglect the importance of culture to sustain these efforts, the employees struggle to embark on the journey together. This is when the "5 years strategy plan" takes longer than expected or fails, and leaders struggle to see how setbacks happened. 

True leadership demands consistent effort to sustain and evolve culture, keeping employees engaged and mission-focused. In any organization, success hinges not just on building a strong culture but on fostering it — especially through times of change. 

The Power of an Intentional Culture

An organization with a strong, intentional culture enjoys benefits like higher employee engagement, increased innovation, and improved retention. Research consistently shows employees who feel connected to their workplace culture are more likely to be productive, collaborate effectively, and contribute meaningfully to the company’s mission. Harvard Business Review studies also suggest companies with strong cultures outperform their peers by 4-5 times in revenue growth. 

Intentional leaders make culture a strategic priority. They actively listen to their employees, seek honest feedback, and invest in initiatives that strengthen the culture to align with the company’s vision and strategic goals. 

Of course, every organization is different and it is important to define a clear set of values and culture to foster that is aligned with the overall strategic goals. In high-pressure environments, the best leaders ensure that culture is not just a list of words on a wall or a message that is only repeated during townhalls but an experience felt by everyone at every level of the organization. Whether it's allowing employees and their experiments to fail in a safe environment, championing inclusive programs and processes, encouraging teamwork in crisis situations, or advocating for sponsorship and mentorship, great leaders create a culture that drives excellence.

Leadership in Action

So, what does great cultural leadership look like in practice?

• Lead by Example: Actions speak louder than words. Every action and decision taken by leaders are observed by others, setting an example for the rest to follow. Leaders who consistently embody the values they promote will build greater credibility and trust.

• Communicate Authentically, Clearly and Openly: A strong culture thrives on authenticity and transparency. Leaders who embrace the culture authentically through aligning words and actions, openly share their goals, challenges, and celebrate successes together foster a greater sense of inclusivity, togetherness and trust. 

• Invest in People: Actively supporting employees’ growth, advocating for development, recognizing contributions, and creating a psychologically safe environment that encourages innovation and constructive feedback. 

• Adapt and Reinforce Culture Continuously: Organizations and business environments evolve, and so should culture. Leaders who proactively address cultural shifts would ensure that values remain relevant and effective.

The Lasting Impact of Leadership

At its core, leadership is not just about driving results — it’s about shaping an environment where employees can do their best work. A strong culture is a competitive advantage, but it requires constant attention and commitment from leaders. When leadership prioritizes culture, organizations not only succeed but also create a legacy that attracts top talent, fosters innovation, and stands the test of time.

Case Study: Leadership and Culture in Grey’s Anatomy

One of the most compelling portrayals of leadership’s impact on culture can be found in a successful TV series Grey’s Anatomy. The show offers powerful examples of how leadership decisions shape the success and morale of an organization— in this case, Grey Sloan Memorial Hospital.

Leadership Evolution and Cultural Shifts

Throughout the series, leadership changes dramatically affect the hospital’s culture. Early on, Chief of Surgery, Dr. Richard Webber, established a mentorship-driven environment that empowered young surgeons. Under his leadership, the hospital fostered teamwork, learning, and a strong sense of purpose across the entire hospital. However, when new leadership shifted to less people-focused approaches and focus on costs and competition with other hospitals, internal struggles arose, morale declined, and the hospital faced challenges such as high turnover and internal conflicts. This is not to say costs and competition aren't important, but to emphasize the importance of reinforcing core values, and creating an environment where employees are brought on the journey together. 

The hospital failed to do so and many of the core doctors, who had once been invested in mentoring the next generation, left due to leadership decisions that undermined the hospital’s educational mission. The striking outcome was when the hospital that had relied on its renowned teaching program was put on probation. This shift reveals the fragility of culture — when leadership fails to uphold core values, even a once-thriving institution can decline. The same lesson applies to any business: when leadership neglects culture, employees disengage, and performance suffers.

The Role of Leadership in Transformation

Conversely, when strong leadership returns — focusing on mentorship, transparency, and team collaboration — the hospital thrives again. Leaders brought back structure, vision, and an emphasis on developing talent. They rebuild trust, reinstate learning programs, and create an environment where both staff and patients benefit. This transformation underscores the importance of culture as a living, evolving force that needs constant reinforcement by leadership.

Key Takeaways for Organizations

• Leadership is the foundation of culture. Strong leadership fosters engagement, while weak leadership can lead to disengagement and turnover.

• Culture must be nurtured and protected. Even a strong culture can be eroded when leadership loses focus on people and values.

• Adaptability is key. Leaders must adjust to changing circumstances without losing sight of core values.

• Mentorship and development drive success. Investing in people strengthens organizational culture and long-term sustainability.

Just as Grey’s Anatomy has shown how leadership impacts a hospital’s success and reputation, real-world leaders must recognize their role in shaping culture. Whether in a series in a medical setting or a corporate environment, one truth remains clear: culture starts and ends with leadership. What kind of culture are you building today? 

Disclaimer: This article references leadership themes depicted in the television series Grey’s Anatomy as a case study. All rights to Grey’s Anatomy and its related elements belong to their respective owners. Additionally, any examples shared about companies are based on observations and research and may not reflect every individual’s experience. This article is intended solely for educational and analytical purposes. CultureHive is not affiliated with, endorsed by, or sponsored by the companies mentioned. Any opinions expressed are based on independent analysis and do not represent the views of these companies.