Why every leader is a culture maker (whether they realise it or not)

Most leaders believe their role is to set direction and make decisions. In reality, their greatest influence is something far less visible, and far more powerful: the culture people experience every day, writes Dr Lidia Lae.

Yet in my work as a psychologist working closely with leaders – both in the therapy room and with organisations – I see the same misunderstanding play out repeatedly: culture is treated as something owned by HR, shaped by policies, or defined by values on a wall.

Culture is not what is written. It is what is experienced.

Employees are not guided by what organisations say they value, but by what leaders consistently do. A leader who avoids difficult conversations signals that honesty is unsafe. A leader who rewards outcomes at any cost signals that behaviour is secondary. A leader who listens and responds thoughtfully signals that people matter.

Over time, these patterns shape the stories people carry with them at work: What is expected of me here? Is it safe to speak up? Who do I need to be to succeed?

Leadership, at its core, is about shaping the stories people come to believe about themselves and their work.

How stories influence culture

From a psychological perspective, these stories are not abstract; they directly influence behaviour, performance and wellbeing. When someone believes their voice is not valued, they withdraw. When they believe mistakes will be punished, they avoid risk. When they feel trusted, they contribute more fully.

This is why leadership has such a profound impact on culture. Research from Gallup shows that managers account for approximately 70 per cent of the variance in employee engagement, reinforcing that the day-to-day experience of work is largely shaped by leadership behaviour.

For HR professionals, this presents a clear challenge and a significant opportunity. Culture cannot be driven through values statements, initiatives or communications alone. It is shaped through leadership behaviour, which means HR plays a critical role in how leaders are selected, developed, and held accountable.

Enabling culture

This shifts culture from something HR measures to something HR actively enables through leadership capability. It includes embedding clear behavioural expectations into leadership frameworks, performance conversations and promotion decisions.

This is particularly relevant in Australia, where there is increasing focus on psychosocial hazards and psychological safety. Guidance from Safe Work Australia reinforces that workplace culture is directly linked to employee health, safety, and organisational risk.

Leaders who create environments of chronic pressure, ambiguity or fear may be contributing to psychosocial harm, often without realising it. Equally, leaders who foster clarity, respect and trust create conditions where people can perform at their best.

Leading with intentional impact

The shift required is not complex, but it is confronting. Leaders must move from being unaware of their impact to becoming intentional about it.

I often encourage leaders to reflect on three questions:

What do my behaviours consistently reward?
What do people learn is unsafe around me?
If my team mirrored my actions, what culture would we create?

These questions bring attention to what is actually experienced, rather than what is intended.

For HR leaders, the opportunity is to embed this level of awareness into leadership development, not as an abstract concept, but as a practical capability that shapes everyday behaviour.

When leaders recognise their role as culture makers, their influence becomes intentional rather than accidental. They begin to create environments where expectations are clear, behaviours are consistent, and people feel aligned, not just with organisational goals, but with their own values and sense of purpose.

Culture making happens every day

Importantly, this is not about perfection. Leadership involves pressure, competing demands, and complexity. Missteps will happen.

But even in those moments, culture is being shaped.

A leader who acknowledges impact and repairs trust reinforces a culture of accountability and safety. One who avoids responsibility sends a very different message.

Every leader is a culture maker, shaping the stories people come to believe about themselves and their work.

The question is whether that culture is being shaped by default or by design. Because in every interaction, a story is being written, and that story becomes the culture people live and work within every day.

Dr Lidia Lae is a psychologist and director at To Learn Consulting, and the author of “Own Your Life Story”.