Culture Rot

Culture is what happens when the boss leaves the room

It’s who gets rewarded. What gets tolerated. What’s on repeat.

And here’s the truth:

You already have a culture. The question is whether you designed it or whether it just …happened.

Culture is the social control system that runs in your organization

It’s defined by the patterns of behavior reinforced over time. It plays out like gravity.

But when leaders treat it as a background variable—hollow phrases, pithy slogans, an outsourced project for HR—it starts shaping outcomes in undesirable ways: low productivity, unaccountability, cynicism and your good people walking out the door.

The companies that win the next decade won’t just have smarter AI-enabled strategies. They’ll have architected the environment where those strategies can thrive. Culture is the medium that decides what grows and what dies.

A 2025 Deloitte survey found 76% of CEOs believe culture is a top driver of competitive advantage, but only 31% say their current culture aligns with their strategy. That’s like saying your plane needs lift, but you’re fine flying with just one wing.

The consequences of misalignment are expensive

MIT Sloan research shows toxic culture is 10.4 times more predictive of attrition than compensation. Gallup estimates that our tanking engagement metrics cost the world economy $438 billion last year. People don’t quit jobs. They quit behaviors, norms and systems that make them feel stifled and stalled.

MIT Sloan research shows toxic culture is 10.4 times more predictive of attrition than compensation.

And yet, most companies still don’t have a culture by design. They have a culture by accident. And “accidental” cultures follow a predictable arc:

• Misalignment: Your values say “innovation,” but every idea dies in a 14-step approval process.
• Mimicry: You copy whatever Netflix or Google says on theirPeople & Culture page and call it a day.
• Malaise: Leaders stop paying attention to anything but the bottom line, and the org slowly calcifies into a bureaucracy of mediocrity.

Fast Company calls this “culture rot.” It’s not a sudden collapse—it’s a slow drift. The high performer who’s toxic but untouchable. The meeting where no one asks questions. The promotion that contradicts everything you claim to value. Rot by a thousand paper cuts.

Gallup estimates that our tanking engagement metrics cost the world economy $438 billion last year.

So, what can we do about it?

Here are three moves that separate culture-talkers from culture-builders:

1. Diagnose what you’re working with.

Move beyond the protracted subjective interpretations from the leadership team alone. Collect culture data safely and anonymously from the employees swimming in the system. Having an objective way to see which behaviors are on display in your environment is the fastest way to reveal and discern the culture you’ve got.

2. Define what’s sacred and what’s not.

Most companies have values so vague they could be printed on candy hearts.“Excellence.” “Teamwork.” “Integrity.” Fine. But what do they mean on a Tuesday afternoon when a client is angry, the quarter is on the line, and the easy choice conflicts with the right one?

Designing culture starts with ruthless clarity. If speed is strategic, bureaucracy can’t be. If innovation matters, failure must be tolerated. The tension should be explicit and observable. If I used a video camera to film you “being innovative,” what would you be doing? What specific behavior could I write you a thank-you note about? Defining the behaviors that clarify how we treat one other and how we do our work is the catalyst to enabling strategic aims.

3. Treat culture as a product.

Ship, measure, iterate. Cultures-by-design embed their values into the circuitry of the company: interview rubrics, promotion criteria, recognition programs, meeting structures. They don’t leave culture to chance. Good leaders program it.

Culture isn’t one-and-done. Strategies change. Markets shift.Workforces evolve. If you’re not auditing culture biannually, you’re probably running an outdated version.

A 2025 PwC CEO survey found 85% of outperforming companies have executives with a deliberate, documented culture strategy. It’s not a coincidence. It’s causation.

If you’re headed into Q4 strategic planning and prioritizing“culture” without having defined the observable behaviors that will enable it at the top of the organization, you’re not actively designing your culture—someone else is.

A 2025 PwC CEO survey found 85% of outperforming companies have executives with a deliberate, documented culture strategy.

Every Teams chat, every title change, every silence in a meeting is a design choice—whether you make it intentionally or not.

Performance is table stakes. The moat—the thing competitors can’t copy—is a culture so intentionally built, so deeply wired into how you operate that it becomes your unfair advantage.

So is the culture you have the one you meant to build?

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More from Mandy Haskett

More articles from Leadership Consultant Mandy Haskett

• As AI proliferates, machines need soft skills, too
• How leading by microwave can burn you
• Culture is a catalyst for the hybrid squeeze
• Get ahead of the curve by relying on wisdom, not effort

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This article originally appeared in the Indianapolis Business Journal on October 17, 2025.