Culture is a lagging indicator

Culture is the heart of any strong company.

When you get it right, it’s like a magnet for positive progress – it’ll attract great people, great customers, and new ideas. But when you get it wrong… well, let’s just say it’s nearly impossible to fix.

But culture itself is a lagging indicator – actions today lead to a positive or negative culture tomorrow.

This is why it’s so critical to identify the key things that shape your culture in a positive or negative direction. Then do what you can to control them up front.

• Great inputs equals great culture.
• Bad inputs equal bad culture.

So, in this article I focus on 7 cultural inputs that I’ve seen many leaders get wrong across my 20 years of working with startups. I call them the “culture killers” because if you don’t get them under control, they will kill your culture (and maybe your company too!).

But I also provide a recommendation for each one – how to turn it around.  If you focus on getting these seven things right, you’re well on your way towards having a top-tier culture at your company. 

Let’s dive in…

1. Leadership Hypocrisy

Saying one thing and then doing another. This immediately erodes trust across the team and sends the message that actions don’t matter. People start to feel angry and cheated. And nothing good happens from there. 

So what’s the answer? It’s simple: lead by example.

• Practice what you preach. Let your actions match your words.
• Live your values. Pick 3-5 impactful & actionable values. Repeat them often.
• Notice, praise, and reward people who also live out the values every day. 
• If a leader breaks a core value, they need to take accountability. 

Be the kind of person you want your team to be. Show them that the values apply to everyone, no matter their title. That’s how you’ll earn real trust and respect.

2. No Deeper Purpose

Working hard without knowing why is like running a race with no finish line. 

Without a deeper reason behind their efforts, it won’t be long before the team feels like just another cog in the machine. This lack of meaning will spread like cancer, and you’ll start tending to people’s resignations on a daily basis.

So here’s how to get this right. The key is to connect people to the impact of their work. 

• Get crystal clear on your company purpose (mission + values)
• Weave it into all that you do as the leader
• Tell stories of your customer impact 
• Show people how their specific job helps achieve that mission. 
• Encourage each individual to get clear on their ‘why’
• It may be slightly different from the company’s, and that’s ok

When people feel part of something bigger than themselves, they’ll push themselves harder. They’ll feel excited to come to work. But if all they see is a pointless grind, they’ll just go through the motions. Connect the dots between daily tasks and the larger purpose.

3. Lack of Alignment

Imagine trying to row a boat with a group of people who all want to go in different directions. That’s no fun and will eventually lead to arguments and unhealthy conflict. 

It’s the same with a company. When everyone has their own agenda, it creates confusion and conflict. So you need to iron this out fast. 

The key is making your goals super clear: 

• Get everyone focused on the same 3 company goals, no more!
• Have each team and individual create their own goals that align. 
• Tie compensation and promotions to achieving goals at the company & individual level
• Keep the goals front and center all year long. Check progress often. Make them the main topic of meetings and emails.  
• Break big goals down into smaller quarterly targets. Celebrate when you hit them!

A team aligned behind a common set of goals is unstoppable. But a scattered team will waste time and energy on the wrong things, and eventually turn on each other.  

It’s your job as the leader to provide absolute clarity. Cut things down to a few clear priorities. Over-communicate until everyone is rowing in the same direction. 

4. Micromanagement

Nobody likes a boss who’s always looking over their shoulder. It’s suffocating. When managers try to control every little detail, it kills motivation. People feel like robots, not valued team members.

Want to fix this? Give people a high degree of autonomy.

• It starts with each individual creating their own goals (that align with the company’s)
• The manager agrees with them, and then lets them figure out how to get it done.
• Trust them to solve problems & bring new ideas to the table. 
• Don’t freak out over mistakes. Create a culture that’s about learning & growing.
• Give people space – instead of daily check-ins, have a weekly meeting. 

If you micromanage, you’ll burn out your team (and yourself). It’s just not sustainable and will inevitably lead to employee frustration & resignations.   

The only way to scale is to develop your team as leaders themselves. Give them room to step up and grow. It can feel scary to let go, but it’s essential. 

5. Low Accountability

Accountability starts at the top. As we discussed in #1, you must practice what you preach. 

But you also need to hold other people accountable for their own performance & behaviors. If you (and the company) tolerate weak performance or bad behavior, it’ll spread like wildfire. 

So what can you do about it? Part of this needs to come from the top; however, the trick is to have the team keep each other accountable without you. 

• Make company, team, and individual goals transparent to everyone.  
• Have regular group check-ins on progress.
• Typically done in a team meeting setting or during individual 1x1s. 
• Make sure individual incentives are aligned with company goals. 
• Consider a company-wide bonus plan that rewards people financially.
• Coach through underperformance. If it persists, you need to move on. 
• Don’t tolerate bad behavior that goes against your values. 

No one is above the rules, including yourself. You can promote a high degree of autonomy (#4) and still hold the line. Build this into the culture, and high performers will stay and thrive. 

6. Lack of Appreciation

When hard work goes unnoticed, people wonder why they bother. They start thinking, “What’s the point of going the extra mile? No one cares anyway.” That resentment can spiral fast. 

But it doesn’t have to be that way. The solution is simple: compliment more than you critique. 

• Make a point to notice and publicly praise great work. 
• Do it often. Be specific about what you like to reinforce behavior. 
• Encourage managers to recognize their team’s efforts. 
• Don’t just wait for big wins. Celebrate small progress and great attitudes too.
• Thank people one-on-one as well. A heartfelt email or quick chat means a lot.
• Save constructive criticism for private talks. Don’t call people out in front of others. 

Gratitude is the easiest thing to do, but in the hectic day-to-day, it’s often the first thing to go. Even try setting automated reminders for yourself. Make it part of your weekly and daily rituals. It takes two seconds to say “Hey, great job on that!” But the impact can be huge.

7. Lack of Trust

Trust is the foundation of any healthy relationship. And that’s true across your team too. When trust breaks down, people get defensive. They hide mistakes. They point fingers. All that fear and blaming crush creativity and collaboration – clearly not good for culture! 

But there’s an antidote to this: be fair and transparent with your team. 

• Be transparent about company goals, plans, and results. No hidden agendas. 
• Explain the “why” behind big decisions.
• Give people real-time feedback. Don’t let issues fester. 
• Assume positive intent. Create an environment where hard conversations are OK. 
• Encourage healthy debate, always with mutual respect. 
• If someone lets you down, start by asking questions, not flinging accusations.  
• Keep your word. If you commit to something, follow through. Be reliable. 

Trust takes time to build but can break in seconds. So protect that trust at all costs. It’s the most precious resource you have. And it’s the heartbeat of any great culture. 

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Building a great culture is hard work. But it’s worth it. 

Just remember, actions today drive culture tomorrow. Focus on the inputs, not the outputs. 

The 7 culture killers in this article are examples of important inputs gone wrong. But, with the advice above, you can turn these negative inputs into hugely positive ones. 

Keep your eyes and ears on the right inputs, and you’ll have a world-class culture in no time. 

How I can help you… 

Are you a founder, executive, or manager? I’d love to support your professional growth. 

Here are three ways: 

1. Connect on LinkedIn and Instagram – where I post practical tips about leadership and startups every day.

2. Subscribe to my free newsletter – where I dive deep into a variety of management and operations topics that will make you a better leader & operator. 
   
3. Join Highland – my executive coaching program for founders, where we help you become a top-tier CEO who can scale into the tens of millions & beyond.