A friend once quipped “There are only two types of people in this world. Those who love Neil Diamond. And those who don’t matter.”
While amusing, I was thinking about his comment this weekend when “Sweet Caroline” mysteriously appeared on my Spotify feed.
I think the same missive is true for organizational culture.
There are those who love it.
And there are those who don’t think it matters.
As a Canadian I’m too polite to say the second category of leaders don’t matter. They do. In fact, they matter even more than the one’s who love culture (and Neil Diamond) because they’re often the resistors to any efforts to review the culture, audit where improvement opportunities exist and invest the time to change their cultures into strategy accelerants.
Yes…strategy accelerants.
Culture is a strategy accelerant. That’s the single biggest reason to invest in it. Culture accelerates or impedes the deployment of your Strategy. Yes, a line I write each week and will continue to hold fast on.
Culture certainly isn’t that “soft stuff”, that “ambiguous, amorphous stuff” and that “unquantifiable, unmeasurable, smoke and mirrors stuff”
So, this post is (another) attempt at making the case for culture.
Through a financial lens in the hopes that some of the cohort that remain skeptical about culture come on over.
The starting point was a recent blog entitled “You get the Culture you Tolerate” and it listed 50 behaviours that impede your strategy. If you’ve not read it, go read it and count off how many of those behaviours exist in your firm. It’s all good, we’ll be here when you get back.
So, in the immortal words of Platinum Blonde…
“Are you seated comfortably?
Then let’s begin”
Assumptions & Acknowledgements
Yes, ChatGPT ran the numbers for me and built out the associated assumptions per cost. I’m nifty around a pivot table but I leant into AI for the answer.
Here were the fictitious details of an organization – play with the numbers and percentages to match your organization if you’re brave enough. <gauntlet thrown>
There are 500 employees in total. 10 are considered Executives earning $300,000 per year. 40 are considered VP's earning $250,000 per year. 300 are considered entry-level earning $100,000 per year. 150 are considered middle management earning $150,000 per year. Across all segments, 15% are considered A players, 40% are considered B players and 45% are considered C players.
Then the simple math question I asked:
“What might an organization save in direct costs if they improved this by 25%”
What’s the Impact then?
I deliberately chose 5 behaviours that are almost universally tolerated. Behaviours that might be deemed innocuous, even benign, but have a significant drag on any culture.
Presenteeism in meetings
Where your culture thrives on having more people in a meeting than necessary. Often people with no role and who could conceivably be doing something more valuable with their time.
Annual Cost Impact: $2,358,000.00
25% Improvement (Savings): $589,500.00
Rework due to unclear communication
No definition required here. Poor briefings, poorly set expectations, inadequate feedback – all the factors that lead to work being done, redone and redone again.
Annual Cost Impact: $2,358,000.00
25% Improvement (Savings): $589,500.00
Slow decision-making
You know the feeling. Another meeting. Another request to find more substantiating data. Reflective of a fear-based culture where making a mistake is regarded as a capital offense.
Annual Cost Impact: $4,716,000.00
25% Improvement (Savings): $1,179,000.00
What’s not measured or considered – the impact of the decision studiously avoided – products not built, transformations not delivered, stagnation.
Over-meeting culture
No definition required. Echoes of presenteeism with very similar impacts to morale and productivity.
Annual Cost Impact: $2,620,000.00
25% Improvement (Savings): $655,000.00
Underutilized talent (poor role clarity)
Any manner of activities we frequently see. Folks doing “busy” work versus impactful stuff. 5 people working on something that only needs 3 – and then it’s often the wrong 5. Decisions made by the “wrong” people because decision rights weren’t established. Or decisions avoided because employees weren’t confident that they should be in the accountability seat.
Annual Cost Impact: $1,572,000.00
25% Improvement (Savings): $393,000.00
Total cost to the business - $13.6 million dollars.
From 5 innocuous behaviours.
Behaviours I’ll guarantee exist in some part of your culture today.
So, have I convinced you yet?
Culture is far from some squishy, soft, amorphous thing inside your organization. Many activities driven by your Culture have a direct and unmistakable cost. See sample above.
THen there are certainly others that are second order effects from your culture. While there’s no GAAP-accepted metrics for fatigue, burnout, disengagement, passive resistance among your staff, consider the cost of these:
The talented employee who leaves for your competition because of meeting fatigue.
The momentum lost while you’re replacing said talented employee.
The new product you fail to launch because you’re indecisive.
The new idea that never gets shared because your people feel intimidated.
Still think there’s no cost to the Culture you tolerate?
You can’t write a blog about Culture without featuring the brilliant Bill Lumbergh from “Office Space” He adds a whole new dimension to “tolerate”
References
What’s with that weird image in the masthead Hilton? Well, that’s the classic HIPPO metaphor - another aspect we tolerate too often in our organizations. HIPPO = Highest Paid Person’s Opinion which effectively drowns out every other voice gathered.
Here’s the ChatGPT thread if you wanna fall through your own Looking Glass Alice.
I lied when I said there is no quantifiable evidence for attributes like burnout, turnover, indecision etc. In fact, there are volumes of research that quantifies the cost of these dimensions.
A 2025 study by CUNY (American Journal of Preventive Medicine) found burnout costs per worker range from $3,999 (non‑manager hourly) to over $20,000 (executive) annually. For a 1,000‑employee firm, that translates to up to $5 million per year
The State of Workplace Burnout 2025 places global productivity losses from burnout at $322 billion/year, with healthcare expenses reaching $125 billion to $190 billion
Wikipedia’s page on employee retention highlights that replacing employees can cost 30% to 200% of annual salary, factoring in recruiting, training, lost productivity, and lowered morale