Why Most Companies Undervalue What Drives Their Success

Most companies say culture matters—but few treat it like a business priority. Discover how poor workplace culture silently drives attrition, kills innovation, and costs billions in lost performance—and what real investment in culture actually looks like.

---

At nearly every leadership conference, on every glossy corporate landing page, and in countless vision statements across industries, you’ll find some variation of this phrase: “Culture is everything.”

It’s clean. It’s inspirational. It sounds like wisdom. But for most organizations, it simply isn’t true.

Because when it comes time to allocate budget, make tradeoffs, or respond to pressure, culture is rarely treated as “everything.” More often, it’s treated as a nice-to-have. It shows up in talking points and recruiting materials, but rarely in financial plans. Culture gets a paragraph in the strategy deck, but never a dedicated line item. It’s the first thing to be deprioritized when things get difficult—and the last thing to be addressed when things go wrong.

And that neglect comes at a higher cost than most leaders realize.

---

Culture Is Not a Perk—It’s a Profit Lever

The problem isn’t that culture is ignored entirely. It’s that it’s misunderstood. Many leaders still equate culture with workplace aesthetics—perks, swag, casual dress codes, or whether or not there’s a beer tap in the break room. Others assume culture is the tone of internal communication or a vague sense of “vibe.” But culture, in practical terms, is the operating system of a company. It determines how decisions are made, how accountability works, how conflict is handled, and whether employees feel like contributors or liabilities.

Research confirms this. A 2022 study from MIT Sloan Management Review analyzed more than 600 companies and over one million Glassdoor reviews during the Great Resignation. It found that the single strongest predictor of employee attrition was toxic workplace culture—ten times more predictive than compensation. That’s a staggering multiplier. Companies with poor cultures were losing talent at four times the rate of their peers. Pay matters, yes. But when people don’t feel safe, respected, or heard, they leave.

And it’s not just attrition. Culture impacts productivity, innovation, collaboration, and discretionary effort. Gallup’s 2023 global workplace report found that only 23% of employees worldwide are engaged at work. That number hasn’t meaningfully changed in years, and the primary reason? Leadership behavior. Gallup attributes 70% of the variance in team engagement to managers. In other words, how people lead is what determines whether employees show up, speak up, and stay. Culture is not an accessory. It’s the core.

---

Why Companies Don’t Invest in Culture (Even When They Should)

So why don’t more organizations treat culture as a business imperative? Because they don’t know how to measure it. Revenue can be tracked. Churn can be calculated. Culture is messier. It doesn’t show up in Salesforce. It doesn’t fit neatly on a dashboard. That makes executives uncomfortable.

There’s also a fundamental misalignment of perceived ROI. Companies will spend hundreds of thousands on sales training, funnel optimization, and software integrations because they believe these investments produce immediate, visible results. But culture? Culture doesn’t produce a tidy spike in quarterly numbers. Its returns are real, but they’re cumulative. They show up in lower attrition, faster decisions, better meetings, and smarter collaboration—but only over time.

Yet research keeps proving the long-term payoff. A 2021 McKinsey & Company study found that companies with high organizational health—essentially cultural strength—outperformed their peers by 3x in total returns to shareholders. The report identified cultural clarity, trust, and leadership accountability as primary drivers of performance. Organizations that treat culture as a system, not a slogan, experience tangible benefits. But those benefits rarely come with a three-month ROI summary—and that’s what gets it overlooked.

In practice, most leadership teams over-invest in what’s visible and under-invest in what actually sustains them. They fund executive coaching programs that focus on “presence” rather than relational leadership. They host offsites filled with personality tests but avoid conversations about power, safety, or responsibility. They promote high-performing managers who leave a wake of disengagement behind them, because “the numbers look good.”

---

A Leader I Knew Couldn’t See It—Until It Was Too Late

Several years ago, I worked alongside a business leader who said all the right things about culture. He understood the theory. He read the books. He even brought up psychological safety in strategy meetings—he knew it mattered. But every time the company faced a new challenge, he pivoted back to what felt familiar: sales enablement, marketing spend, top-of-funnel growth. Culture became something we’d “circle back to” after the next big push.

At first, it was understandable. The company needed revenue. The pressure to perform was real. But over time, the effects of underinvesting in the people system became impossible to ignore. Talented employees left, citing burnout or “new opportunities.” Team leads stopped sharing honest feedback. Meetings became political. The company’s internal clarity eroded faster than its website traffic grew.

Eventually, the leader did try to make a culture pivot—but by then, the cost was steep. Rebuilding trust, re-engaging a cynical team, and undoing deeply embedded habits took far more effort (and money) than if we’d invested early and consistently.

He wasn’t a bad leader. He was a smart one. But like many, he assumed that culture could wait. That revenue would stabilize the organization, and culture could be addressed after.

It rarely works that way.

---

Culture Shows Up in What You Measure—and What You Ignore

Most companies don’t track culture because they don’t think they can. But the truth is: you already are—you’re just doing it passively. Culture is being shaped by who gets promoted, who gets sidelined, who’s allowed to speak in meetings, and what behaviors are quietly tolerated. These signals are loud, even when they’re not acknowledged.

That’s why “culture matters” so often rings hollow. It’s become a throwaway phrase. Leaders say it the same way they say “work-life balance matters” or “our people are our greatest asset.” It’s a branding exercise. It sounds good during onboarding. But when you look at the budget, the incentives, and the internal dynamics? Culture rarely shows up in the places where it counts.

If you want to know what a company really values, skip the mission statement. Look at who gets time with leadership. Look at which managers get coached and which ones get ignored. Look at how performance is defined—and whether people can succeed by being collaborative or only by being aggressive.

---

The Hidden Business Cost of Cultural Neglect

It’s easy to underestimate the cost of culture because most of its consequences are indirect. They don’t show up in immediate metrics. They’re not easily attributed. But they are real—and they’re everywhere.

According to the Society for Human Resource Management (SHRM), the cost of turnover related to poor culture in the U.S. alone is $223 billion over five years. That figure captures recruiting and onboarding costs, but not the subtler damage: the erosion of institutional knowledge, the growing psychological weight on teams, and the organizational drag that builds when trust begins to collapse.

Because when culture breaks down, you start to see:

1. Projects that stall because no one wants to challenge a flawed direction.
Ideas that could have been corrected in a quick conversation spiral into long-term setbacks. People recognize the issues—but saying something feels riskier than staying silent. So teams keep marching toward outcomes that everyone quietly doubts. Initiative gives way to compliance. Accountability turns into avoidance.

2. Innovation that dies in meetings where only the loudest voices get airtime.
When psychological safety is absent, creative risk becomes political risk. Employees stop sharing half-formed ideas, fearing judgment or dismissal. Instead of exploration, teams default to consensus. Bold thinking gets replaced with what’s safest to say. Over time, the company’s intellectual edge dulls—not from lack of talent, but from lack of permission.

3. Customer problems that escalate because cross-functional teams don’t collaborate.
In healthy cultures, teams solve problems quickly—because there’s shared trust and clear ownership. In toxic or fragile environments, issues get bounced from one department to another. The goal shifts from solving the problem to avoiding blame. Customers don’t care who’s at fault internally—they just feel the disconnection. And they leave.

4. People who emotionally clock out long before they formally resign.
They stop pushing. They stop caring. They do just enough not to get noticed—but no more. You’ll still see them on Slack, on Zoom, at the meeting. But their best thinking, their real energy, has already gone elsewhere. Often to a company they haven’t joined yet—but where they imagine their contributions might matter again.

And yet, most organizations fail to connect the dots. They see the symptoms—burnout, disengagement, underperformance—and diagnose them as personal problems. They roll out productivity tools, offer mindfulness sessions, or send another anonymous survey. But none of those things address the root cause: a cultural environment that punishes risk, ignores emotion, and quietly trains people to protect themselves.

Culture is rarely the thing leaders blame. But more often than not, it’s the reason things fall apart.

---

So What Does Investing in Culture Actually Look Like?

It doesn’t look like inspirational posters, branded values on the wall, or a quarterly team-building retreat. It doesn’t mean ping pong tables, casual Fridays, or Slack channels with emojis for “kudos.” It’s not an aesthetic—it’s a system. Culture, when taken seriously, is not a vibe. It’s a design.

That design requires clarity, commitment, and resources. It requires moving beyond performative gestures to operational decisions. Because culture is not created by what leaders say—it’s created by what leaders systematize.

Here’s what real investment looks like:

1. Train Managers in Human Skills

Leadership is not simply about setting direction or managing outcomes. At its core, it’s about building environments where people can do their best work without fear, confusion, or emotional exhaustion. And that requires skills many managers were never trained to develop.

Yes, managers should know how to give feedback. But more importantly, they should know how to receive it without becoming defensive. They should know how to create space for disagreement, how to navigate emotionally charged moments, and how to respond to vulnerability without shutting it down. These aren’t “nice to have” traits. They are the foundation of high-performing teams.

Google’s Project Oxygen, one of the most influential internal studies on managerial effectiveness, found that psychological safety, emotional intelligence, coaching ability, and empathy were the top traits of effective leaders—not technical expertise. Yet many companies still promote based on output rather than relational skill.

If you want to improve culture, start with your frontline managers. Train them not just to lead, but to human well. Because their habits become the emotional weather system of your organization.

2. Tie Culture to Performance Reviews

If you don’t measure it, it doesn’t matter. And in many organizations, the only things measured in performance reviews are outputs: revenue, project delivery, operational efficiency. Culture is treated as a bonus—acknowledged only when it’s exceptional or terrible.

But if trust-building, collaboration, conflict resolution, and clarity are not part of your leadership evaluations, then you’re sending a message: this doesn’t count. And people listen.

Culture should be built into how performance is defined. That might mean evaluating managers on:

• The clarity of their team’s goals
• Their responsiveness to feedback
• The retention rate of high performers
• The psychological safety levels in employee engagement surveys

The best cultures don’t reward people just for hitting goals. They reward people for how they pursue those goals—with integrity, clarity, and respect for others. And they hold leaders accountable for both results and relationships.

3. Budget for Culture

If culture truly matters, it deserves money. Not just rhetoric. Not just internal memos. Actual budget. Actual line items.

This doesn’t mean spending frivolously on motivational speakers or elaborate offsites. It means allocating real resources toward:

• Leadership development programs focused on human dynamics, not just strategy
• 360-degree feedback systems that surface blind spots
• Organizational health diagnostics
• Role clarity workshops
• Communication architecture that ensures transparency across teams

It might mean building new rituals, redesigning meeting rhythms, or investing in facilitation. It might mean hiring external consultants to address deeply embedded dysfunction. But whatever the format, the point is clear: if culture is treated as a cost center rather than a performance multiplier, you’ll never get traction.

Companies that don’t invest in culture spend that money later anyway—on backfilling burnt-out talent, re-aligning fractured teams, or managing reputational damage. The difference is whether you pay on your terms—or crisis’s.

4. Fix the Environment, Not Just the People

When things go wrong, most organizations respond by addressing individuals. They launch coaching initiatives. They shuffle teams. They deliver feedback, run HR interventions, or encourage resilience training.

But in many cases, the problem isn’t the people. It’s the system they’re operating in.

You can’t coach someone into thriving in a workplace that punishes honesty, rewards politicking, or demands perfection. You can’t develop empathy in a context that structurally rewards self-protection. You can’t build trust in a system that inadvertently incentivizes withholding.

Culture change is systemic. It requires interrogating the environment:

• What behaviors are quietly rewarded here?
• Who gets airtime in meetings—and who doesn’t?
• How are decisions made, and whose input matters?
• What happens when someone fails?

Fixing the environment might mean reevaluating incentives, decentralizing decision-making, adjusting team structures, or even changing how success is defined. It means building operating norms that don’t just reflect your values—but enforce them.

---

Final Thought: What Happens When Culture Is an Afterthought?

You lose your best people. You slow your most promising ideas. You build a workplace where talent operates at 60% of capacity because 40% of their energy is spent navigating politics, managing reputational risk, or recovering from unnecessary meetings.

Eventually, you’ll spend money cleaning up what you could have prevented for far less.

Everyone says culture matters. Almost no one acts like it.

The ones who do? They outperform, retain their best people, innovate faster, and solve problems while others are still blaming their teams. They don’t always talk about culture. But you can feel it in how they operate.

They built something most companies only pretend to care about.

They built a culture that works.

---

✅ Want to Build a Culture That Actually Works?

If you’re ready to move beyond slogans and start building a culture people can trust—where clarity, alignment, and motivation are more than buzzwords—consider bringing the Identity-First Leadership to your team.

The Identity-First Leadership™ Workshop is designed for executive teams, people leaders, and organizational architects ready to create cultures of trust, clarity, and purpose.

✔ 1- or 2-day format
✔ Includes the Leadership Identity Audit, Motivation Flywheel™, and Leadership Trellis™
✔ Built for sustainable transformation, not quick wins

Develop leaders who lead from identity—so trust and transformation follow.

I’m currently booking executive workshops for June 2025 and beyond.

📩 Email me directly at influencejournalforleaders@gmail.com

I’ll personally follow up to learn more about your team and walk you through how this experience could work for your culture and leadership goals.