The question of how organisational culture is created has a research-consistent answer: it is created through the observed behaviour of the people with the most authority, transmitted through the social learning mechanisms that humans use to navigate unfamiliar social environments. This transmission is not deliberate education; it is the automatic modelling process that operates below conscious awareness on both sides.

Why what founders do outweighs what they say

Bandura’s (1977) social learning theory establishes the primary transmission mechanism. Team members learn what is acceptable, expected, and valued in an organisation by observing the people with the most authority — in early-stage companies, the founder. This learning is not deliberate; it is the automatic pattern-recognition that humans apply to social environments to determine which behaviours are safe and which carry social cost.

Grusec and Goodnow’s (1994) research on behavioural internalisation confirmed the finding that is most practically consequential for founders: when observed behaviour and stated principles conflict, observed behaviour wins. The founder who states “we value work-life balance” and sends emails at 11pm on Sunday is not creating a work-life balance culture. They are creating a culture whose underlying assumption is that availability outside working hours is what commitment looks like — because that is what the most authoritative person in the environment is demonstrating through their actual behaviour.

The stated values are what the founder endorses when they are being reflective. The observed behaviour is the cultural instruction that the team is receiving continuously, processing automatically, and using to calibrate their own behaviour to what the environment actually rewards.

What the founder tolerates becomes the norm

Cialdini’s (1984) social proof principle operates in norm formation through a specific mechanism: people determine what is correct behaviour in ambiguous situations by observing what others — particularly those with authority — do and what consequences follow. The founder’s response to observable behaviour is the primary signal system through which norms are established and maintained.

When the founder tolerates lateness in meetings without comment, it communicates that lateness is within the acceptable range. When they tolerate disrespectful communication, it communicates that this communication style is the descriptive norm — what actually happens here — regardless of what the injunctive norm states about respectful dialogue. Every behaviour the founder allows to occur without consequence becomes data about what the culture actually accepts.

The social norms literature draws the distinction that matters most here. Descriptive norms are what actually happens in an environment; injunctive norms are what is supposed to happen. Culture is primarily a set of descriptive norms. The founder’s actual behaviour — and their response to others’ behaviour — establishes the descriptive norm that team members use to calibrate their own conduct. The mission statement establishes the injunctive norm; it is the descriptive norm that governs what people actually do.

How fast culture travels: the emotional contagion mechanism

Sy, Côté and Saavedra’s (2005) research documented the temporal mechanism of cultural transmission. Leader emotional states are transmitted to team members through automatic emotional mimicry — the same mechanism established in the interpersonal articles in this series — producing a shared team emotional tone within hours. Culture is not primarily a long-term development that gradually accumulates through sustained experience; it is an immediate and continuous consequence of how the leader shows up in each interaction.

The practical implication is that culture is created in every meeting, every response to bad news, every interaction under pressure, every celebration or dismissal of an achievement — not at the annual culture offsite. Barsade’s (2002) ripple effect research confirmed that leader emotional states propagate through organisational networks, reaching people who never directly interact with the leader, through the chain of interpersonal contagion that connects every node in the social network.

The founder who shows up anxious transmits anxiety. The founder who responds to failure with curiosity transmits that failure is a data source rather than a threat. The founder who expresses genuine enthusiasm transmits that the work matters. These are not metaphors — they are specific, measurable, neurological transmission events that occur in every interpersonal encounter and accumulate as the cultural assumptions that govern everyone’s experience of the organisation.

Schein’s primary versus secondary embedding mechanisms

Schein’s (1985) founder embedding mechanisms distinguish between the channels through which culture is transmitted. Primary mechanisms are the behaviours that communicate cultural priorities directly: what the founder pays attention to and measures, how they react to critical incidents and crises, their criteria for including and excluding people from the organisation, and their visible allocation of resources and status. Secondary mechanisms are the formal structures: organisation design, systems, procedures, and formal statements of values.

Schein’s research finding is that primary mechanisms dominate secondary ones. What the founder pays attention to in meetings tells team members what matters more than any strategy document. How the founder responds to the first significant failure tells the team more about whether it is safe to take risks than any psychological safety policy. What criteria the founder visibly uses in their hiring and firing decisions tells team members what is actually valued more than any values statement.

The reward pattern is the primary mechanism of all: the culture that develops is the one that the reward system is reinforcing, independently of what any secondary mechanism states.

Books worth reading on this

Dare to Lead by Brené Brown. Brown’s account of the specific leader behaviours that create cultures of psychological safety — and her research-based treatment of how vulnerability, clarity, and accountability translate from individual leader behaviour into collective cultural assumption — provides the most practically structured available complement to the transmission mechanisms this article describes. Her specific account of how rumble values — translating stated values into specific observable behaviours — addresses the gap between espoused values and underlying assumptions that the Schein model predicts. The Making of a Manager by Julie Zhuo. Zhuo’s account of how new managers create culture through their daily decisions — including her specific treatment of how the behaviours she modelled in her early management created team norms that persisted long after she had changed — is the most emotionally accurate available popular treatment of the Bandura transmission mechanism in a scaling company context.

If the dynamics described here are significantly affecting your wellbeing, speaking with a psychologist is the right next step. UK: Samaritans (116 123, free, 24/7). Mind (0300 123 3393). BACP: bacp.co.uk/search/Therapists. Crisis Text Line — text HOME to 741741 (US, UK, Canada, Ireland). International: internationaltherapistdirectory.com.

This article is for educational and informational purposes only. Sources: Bandura, A. (1977), Social Learning Theory, Prentice Hall. Grusec, J.E. & Goodnow, J.J. (1994), Impact of Parental Discipline Methods on the Child’s Internalization of Values, Developmental Psychology, 30(1), 4–19. Cialdini, R.B. (1984), Influence: The Psychology of Persuasion, Harper & Row. Cialdini, R.B., Reno, R.R. & Kallgren, C.A. (1990), A Focus Theory of Normative Conduct, Journal of Personality and Social Psychology, 58(6), 1015–1026. Sy, T., Côté, S. & Saavedra, R. (2005), The Contagious Leader, Journal of Applied Psychology, 90(2), 295–305. Barsade, S.G. (2002), The Ripple Effect, Administrative Science Quarterly, 47(4), 644–675. Schein, E.H. (1985, 5th ed. 2017), Organizational Culture and Leadership, Jossey-Bass. Catmull, E. (2014), Creativity Inc., Random House. Brown, B. (2018), Dare to Lead, Random House. Zhuo, J. (2019), The Making of a Manager, Portfolio.