The culture of an organisation is the sum of the way people behave (how everybody behaves around here, what gets encouraged, how to get on). There are many things which influence behaviour (system conditions) such as the structure, rewards, communication, clarity of purpose to name a few.
However, leadership always has the most influence on an organisation’s culture. It is the leaders who determine how the organisation works, they set the structures or functions, they establish the measures and so on. Whether they do so consciously or not, leaders are responsible for the system.
Furthermore, the leaders’ behaviour (whether they appreciate it or not) has a powerful influence on the culture. Leaders have expectations of people which are implicit in the way they lead – people will live up or down to their leaders’ expectations. Leaders pay attention to things which (rightly or wrongly) matter to them and what gets paid attention to ‘gets done’, whether or not it improves performance.
The first step in changing a culture is to understand how the leaders’ thinking currently drives the system and how, therefore, it currently drives performance.