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Too many leaders overlook culture issues until they become major problems. High turnover, low morale, and declining productivity can snowball into crises that hurt profitability, but only if leaders let them.

This article will help you, as a leader in your organisation, spot red flags, differentiate between surface-level engagement issues and deep-rooted cultural dysfunctions, and take meaningful steps towards fixing culture issues.

Why Leaders Struggle to Recognise Culture Issues

Many CEOs and HR leaders fail to see cultural issues within their organisation until the damage is severe. This isn’t due to negligence, but rather a combination of cognitive biases, structural blind spots, and a lack of unfiltered employee feedback.

The “Culture Bubble”

Senior executives often operate in a completely different environment from frontline employees. Their experience of company culture is shaped by interactions with other leaders, high-performing teams, and filtered reports rather than direct engagement with everyday workplace realities.

By the time cultural problems reach them, they are often diluted, downplayed, or sugar-coated.

Cognitive Biases

Leaders frequently fall victim to psychological biases that distort their perception of company culture.

• Confirmation bias: Leaders focus on positive feedback that aligns with their existing beliefs while dismissing negative signals as isolated incidents.
• Survivorship bias: The assumption that those who remain in the company are engaged, without considering the perspectives of those who left due to cultural dissatisfaction.
• Optimism bias: Leaders believe cultural problems exist elsewhere but not in their own organisation.

Fear-Based Silence

In organisations where psychological safety is low, employees hesitate to raise concerns. Fear of retaliation, dismissal, or being labelled “negative” discourages honest conversations. As a result, leadership often mistakes silence for satisfaction, unaware that disengaged employees are simply avoiding confrontation rather than being content with the status quo.

Over-Reliance on Surveys

Many organisations rely on engagement surveys to assess workplace culture. However, these surveys only provide a partial picture. Employees may give neutral responses to avoid standing out, while fear of anonymity breaches may lead to sugar-coated feedback.

Surveys only capture stated opinions, not real behaviours such as hidden resentment, passive disengagement, and distrust in leadership. It’s important to recognise that survey data can be misleading without qualitative insights, such as open conversations, exit interviews, and behavioural observations.

Slow Recognition of Cultural Drifts

An organisation’s culture is never stagnant. Internal and external changes force it to evolve, and yet many CEOs assume the culture they originally built still exists.

A once-innovative culture may have become risk-averse due to bureaucracy. A values-driven company may have prioritised short-term profits over employee well-being. Rapid growth may have diluted core values as new hires and acquisitions introduced conflicting work styles.

If you refuse to actively monitor and adapt to these shifts, you unknowingly allow cultural drift to take hold.

Mistaking Perks for Culture

Many organisations assume that offering perks—such as free lunches, gym memberships, or casual Fridays—will automatically create a strong workplace culture. Not so. While these benefits can certainly improve the employee experience, they do not address core issues like trust, leadership accountability, or communication breakdowns.

A toxic work environment cannot be masked with wellness programmes; employees will still feel disengaged if they lack psychological safety, fair treatment, and meaningful work.

Leadership Inconsistency

Employees lose faith in leadership when they see a disconnect between what leaders say and what they do. Leaders promote “work-life balance” but reward employees who overwork while sidelining those who set boundaries. They encourage transparency but make major decisions behind closed doors. They claim to put “people first” but cut jobs without warning when financial challenges arise.

When employees perceive hypocrisy, they disengage. They assume that company values are just empty words—and they’re not wrong.

Tolerating Toxic High Performers

Some companies allow high performers to behave poorly because they bring in revenue or have industry expertise. However, when top executives or managers are toxic, employees will take notice.

When toxic behaviours go unchecked, it sends a message that performance matters more than respect. As a result, good employees leave, while those who stay learn that the only way to succeed is to tolerate or emulate bad behaviour. Over time, the work environment becomes hostile.

Lack of Follow-Through

Nothing damages employee trust more than leadership making big announcements but failing to act. Leaders may announce diversity and inclusion initiatives but never implement real change.

They may launch engagement programmes but fail to address employee concerns.

They may hold town halls where they say, “We’re listening,” but employees see no impact from their feedback. Over time, employees stop believing in leadership messages.

Punishing Honesty

Many leaders say they welcome feedback, but their reactions suggest otherwise. Employees who challenge decisions are labelled as difficult or uncooperative. Those who raise concerns about leadership are quietly sidelined or excluded. Over time, employees learn that staying silent is safer than speaking up.

The result? A culture of fear, learned helplessness, and passive disengagement, where the best talent quietly leaves, and leadership never understands why nor cares to.

Key Warning Signs of a Culture Problem

One of the biggest yet most unnoticed warning signs is when employees stop trying to improve the workplace. Employees no longer attempt to solve problems or innovate, there’s a belief that leadership won’t listen or act on feedback, employees remain silent in meetings, and people do the bare minimum to avoid conflict but lack motivation.

How many of the following warning signs do you see in your own organisation?

1. High employee turnover and disengagement. Frequent resignations, particularly among high performers. Exit interviews reveal dissatisfaction with leadership, misalignment with company values, or a lack of trust. There’s low morale and increased absenteeism.
2. Toxic leadership and poor communication. Leaders lack transparency, accountability, or consistency. They avoid difficult conversations, while departments operate in silos, leading to poor cross-functional collaboration.
3. Resistance to change and innovation. Bureaucratic processes slow down decision-making and stifle progress. Employees hesitate to propose new ideas, fearing rejection or repercussions. Legacy systems, outdated mindsets, or risk-averse leadership hinder progress.
4. Psychological safety and work-life balance issues. A blame culture punishes mistakes rather than using them as learning opportunities. Employees suffer from chronic stress or burnout due to excessive workloads. Overwork is glorified, while setting boundaries is perceived as a lack of commitment. High levels of sick leave, exhaustion, and mental health-related absences.

Why Choose External Experts To Address Culture Challenges

Fixing cultural issues internally is challenging because leaders and employees often have blind spots. Biases, filtered information, and ingrained habits can prevent your organisation from recognising and addressing the root causes of dysfunction.

External experts provide key benefits:

• Objectivity
• Trust and credibility with employees
• Holistic experience across various industries
• Speed without compromising impact

What Makes Our Approach Different from Traditional Culture Change Programmes?

Most culture change initiatives focus on surface-level fixes—new values statements, engagement workshops, or policy changes. They do this without addressing the underlying behaviours that shape an organisation’s daily operations.

The Human Touch (THT) takes a different approach to make sure that cultural transformation is not just a feel-good initiative but a strategic driver of business success.

You have the chance to shape your organisation’s future and build a profitable, high-performing culture before it’s too late. Will you do it? Contact us to get started, or explore how we can solve your culture problems with Consulting.