The World’s #1 Executive Coaching and Business Coaching Blog (2017-2020)

Corporate culture is hard to define, but we know it when we experience it.

A healthy culture happens when companies practice the values they profess.

One excellent explanation of corporate culture is this: it’s made up of what we (as an organization) say, what we do, and the difference between the two. In other words, if we say we’re a caring, people-oriented organization, yet consistently behave as if employees are expendable and the goal is to amass money by whatever means possible, there’s a clear gap between stated values and actual values.

When consistency between stated and practiced values reigns, the culture is generally strong and positive. People know what to expect, and they get it. There’s no single “right” culture for every business. Troubled corporate culture tends to have many characteristics in common, however. Here are five of them.

1. Unclear Standards and Expectations

If people don’t know what’s expected of them, then how can they engage with their work? Positive work cultures include clear expectations based on role and consistent standards of behavior. When people know what to do, how to do it, and why they’re doing it that way, the culture is better.

Conversely, when people don’t know what’s expected of them, whether it’s OK to behave in certain ways, or even why they’re doing what they do, then culture is a problem.

2. Lack of Consistent Accountability

Everyone, from the top of the organizational chart to the bottom, should be accountable for their actions. And accountability should be enforced consistently. If an entry-level employee is fired for committing a criminal act outside work, then a senior employee should face the same consequences for the same behavior.

When everyone knows they’ll be accountable for their actions, there’s less of an atmosphere of favoritism. People feel as if they’re treated fairly, and that’s incredibly important to the culture.

3. Lack of Trust

In companies where culture is troubled, people don’t trust each other. This, in turn, causes them to hoard information, makes people less likely to collaborate, and generally creates an “everyone is out for themselves” environment.

People can’t do good work when they don’t trust their colleagues.

Leaders must demonstrate trust consistently. People should know that they are entrusted with their tasks, and they should know what the consequences are for breaking that trust. Again, consistency is the key. Trust must be demonstrated from the top, and down through every organizational level.

4. High Turnover

If the culture is toxic, people will leave at the first opportunity. And the people who do stick around will generally be those who are in it for a paycheck and just want to put in the minimum effort required to keep it.

Some industries experience higher turnover than others, so it’s important to keep things in context. Know what typical turnover rates are for your industry and use that as a basis for comparison. If you lose good people at a faster rate than average, perhaps your culture is to blame.

5. People Are Afraid to Speak Up

A troubled corporate culture creates an environment in which people are afraid to speak up. As a result, small problems that could be easily solved grow unwieldy. Perhaps the only thing worse than finding out that a project you thought was going well is actually in trouble is finding out that everyone knew, and nobody said anything.

Trust, clear expectations and accountability are cultural components that encourage people to speak up when something is wrong. In organizations that demonstrate these, problems are identified earlier and addressed before they become major headaches.

Without excellent leadership, a healthy corporate culture can’t thrive. Culture must be monitored and tended to regularly and consistently to remain healthy. Leaders must be involved in talking about culture, assessing culture, revisiting organizational values and standards, and identifying areas where cultural problems may exist.

It all starts with leadership development, from identifying potential leaders to training and coaching them, all in keeping with cultural values. Leadership coaching can also help top leaders understand how to identify cultural problems and practices that support great culture. Leadership and culture simply cannot be disconnected if you want to continue to thrive and attract the best people. If you want to learn more about corporate culture, I encourage you to check out my books.

Back to blog