In many boardrooms, the dialogue is dominated by mission statements, quarterly targets, and the pursuit of top-tier talent. Yet, a recurring paradox haunts executives - high-potential hires often exit prematurely, and productivity is unstable despite competitive compensation packages.

The root of this problem is rarely a lack of talent, but likely an organisational system that employees find unfulfilling. While leadership is tasked with defining the vision, it is the organisational culture, often dismissed as a complicated HR footnote that ultimately determines a company’s survival. Leadership is accountable for culture.

The leadership mirror effect and contagious effects: Organisation culture is not a nebulous concept; it is primarily a direct reflection of the daily habits of top and middle management. Leaders act as the primary blueprint for behaviour within the office.

Read: Why culture is key to success of organisations

When those in authority exhibit "small" bad habits such as arriving late, exaggerating expense claims, or providing preferential treatment, they inadvertently provide a template for their subordinates to follow.

Employees are keen observers who instinctively copy these habits until they become entrenched as the standard way of working. This "mirror effect" ensures that if a manager views a breach of ethics as harmless, the workforce will soon normalise these deviations. Over time, these outcomes become the culture and are reinforced through emulation.

The ‘poisoned chalice’: One of the most insidious ways a culture deteriorates is through the "poisoned chalice" effect, where new talent is systematically programmed by existing staff.

Consider the experience of Chaupelle Kimaru, whose first day at a new firm was met not with inspiration, but with a cynical briefing from a colleague. She was warned that hard work goes unrewarded, that managers are toxic, and that speaking the truth leads to victimisation.

Because human beings are wired to seek social cues for survival, Chaupelle began viewing every leadership action through a lens of suspicion. Within months, she passed this same "brief" to five new hires, creating a self-sustaining group of employees who lacked any trust in management. This group-think becomes a protective shield for disengaged workers, ensuring management is mistrusted.

The high cost of normalised laxity: A poor accountability culture often develops systemically when managers fail to hold underperforming staff accountable.

When a leader ignores an employee who is dragging the team down, the rest of the workforce notices the lack of consequences and naturally relaxes their own standards. This "habit of forgiving" or delaying having difficult conversations becomes a normalised cultural fixture.

The financial implications of this laxity are severe. A management style that blocks creativity, creates an environment of inequality, favouritism and eventually chases away top-tier talent.

Hiring a single replacement can cost an organisation approximately the annual salary of that new hire, revenue loss, or reputation risk. Unchecked, these tolerated habits grow into a "culture monster" that stalls growth and reduces an organisation's resilience during periods of economic volatility.

The strategic imperative - conducting a culture audit: To reverse this decline, forward-thinking organisations must move beyond "survival mode" and interrogate their internal systems. This begins with a formal culture audit designed to reveal the foundations of bad habits.

An effective audit requires leaders to hold a mirror to their own conduct, identifying where their personal habits such as failing to spotlight expectations or tolerating mediocre performance have stifled employee connection to the business values. Employees also get opportunity to share their expectations from management.

Leaders must examine the gap between their written code of ethics and the real or perceived conduct of those in authority. If leadership does not live up to its spoken values, the workforce quickly realises those values are not actually "valued" by the organisation.

The audit must also interrogate whether existing management and leadership systems make employees feel respected, valued, or uncared for.

A healthy culture audit helps leaders critically reflect on their habits, as culture is a reflection of top leaders and middle management.

The audit should evaluate if leaders are inadvertently encouraging bad habits and ethics by which employees emulate such as exaggerating expense claims, preferential staff treatment, or unethical business.

The audit compares the company’s written code of ethics and policies with the real conduct of those in authority, and perception of employees.

If leadership does not live up to its spoken values, the audit will reveal that employees have realised those values are not actually valued by the organisation.

Read: Why employee engagement key to attraction and retention of talent

The audit interrogates management systems and employee sentiment and evaluates whether existing systems or their absence make employees feel respected, valued, uncared for or appreciated and rewarded.

It examines the impact on talent and innovation, and determine if management habits are blocking creativity and innovation, personal growth and chasing away good talent.

Slaying the "culture dragon" is not a one-time event but an intentional transition toward people-centered leadership.
By identifying and handling the seemingly harmless, self-perpetuating, yet risky habits of management, a company can transform a poor culture into a growth-oriented culture.

Ultimately, culture sets the pathway for all systems meant to drive business strategy. If the culture is wrong, it will eventually "eat the strategy" and cripple the organisation’s future.

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