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In the last article on the work values of New Work, it emerged that just half of all employees are able to realize their full potential in their job. Only half? It could be different - at least that's the credo of Great Place To Work®. As experts in workplace culture, this is exactly what we want to enable - that employees can reach their maximum potential where they work - by feeling comfortable and being able to realize themselves.
But how is that possible? The answer is trust. And at all levels. In other words, trust is needed between employees and managers - but also between managers and employees. You almost don't want to hear it, but our consultants repeatedly come across management teams that don't trust each other. But they wonder why there is no trust in the employees either.
Trust is so important because it expresses appreciation for the skills and competencies of employees and gives them the freedom to make decisions. Trust is so important because it enables relationships to be built, stabilized and developed. And trust is important because it creates a community, makes people strong and increases innovation and value creation for the entire company. This is shown by studies where shares in listed companies with a trust-based workplace culture increased in value three times as much as those without. But there are also practical examples, such as Atlassian's "FedEx Days" back then and "Shiplt Days" today, where employees can work on a project of their choice for 24 hours - and thus develop the "coolest things that software has today".
Success factor leadership style for workplace culture development
Developing a trust-based workplace culture is challenging. It is crucial that it is supported by practiced values and leadership quality. In other words, not just glossy brochures with great phrases or beautifully designed posters with the so-called company values hanging on the walls, but that the values are actually put into practice. So if transparency is a corporate value, then this must also be reflected in everyday working life - for example through pay transparency or open access to strategic documents.
The second point, leadership quality, also has an impact on the values practiced - because developing a workplace culture requires managers who actively exemplify these values. A trend study by the Institute for Leadership and Human Resource Management at the University of St. Gallen shows the influence that the type of leadership has on employee performance. The leadership styles are divided into authoritarian leadership, laissez-faire leadership, inspirational leadership and shared leadership.
Authoritarian leadership is defined by command and control, instructions and corrective behavior as well as a strong top-down mentality. Laissez-faire, on the other hand, means that managers neither take responsibility nor give feedback and generally do not cultivate a personal relationship with employees. Inspirational leadership means that leaders lead with a motivating vision in which employees recognize the reason-why of their work. It is an approach that focuses on emotional values and relationships, and motivation is the resulting added value. Shared leadership, on the other hand, means that the tasks that typically fall to a single leader are divided among several players - including employees. In this way, responsibility is shared within the team and employees can make their own decisions.
The impact of the leadership style - on employee performance alone - is serious: while innovative performance falls by 5% in companies with a high level of directive leadership, the figure for laissez-faire leadership is already 17%. However, if you look at companies with a high level of inspirational leadership, innovative performance increases by no less than 14%!
A similar picture emerges for company performance, employee productivity and productive energy. Only corrosive (i.e. destructive) energy decreases, which again benefits the workplace culture and therefore the company. It is exciting and remarkable that shared leadership also shows positive effects, but not to the same extent as inspirational leadership. The reason for this is that employees are often not yet used to this level of trust and decision-making authority - because employees have mostly been socialized in strongly hierarchical structures and sometimes still feel overwhelmed by the new styles. However, the fact that such positive effects are already measurable is a clear sign that the positive effects will become even stronger.
At the same time, inspirational leadership and shared leadership have a strong impact on employee engagement. For example, entrepreneurship increases by 33% for employees with high inspirational leadership - while it goes the other way around and decreases by 30% for companies with high laissez-faire leadership. Overall, the results of laissez-faire leadership and authoritarian leadership are not surprising - but the fact that the effects are so strong shows how important a change in leadership styles is for a better workplace culture.
