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Spotting Culture Rot Before It Takes Hold Of Your Business

Jack Vanstone
April 22, 2023
Est. Reading Time
15 minutes

We've all been here before.

Sitting down to write this is conjuring up some pretty gnarly memories. If you've ever witnessed - or worse still - flagged Culture Rot issues and have been met with nothing but silence or disdain, then you'll feel the pain that I feel. Culture Rot is lethal for any business. Culture takes months to build and minutes to destroy. It really is that fragile.

I worked for a legacy software house once, the business had a lot of promise, it had a client list with some eyewateringly large enterprise contracts, a 60% share of the market and a unique position in it too. But the business had problems, the operational overhead was Seth Rogan high, the software was old and buggy and their billing model was about as detached from reality as current energy prices.

There have been several other companies where - despite the best will in the world from some very talented people - a Culture Rot avalanche has decimated the entire business before anyone even heard it coming. Leaving previous roles for me has been intrinsically linked to a degradation of culture in the business and this has left me particularly aware of the warning signs.

Despite it being the most obscure 6th Sense you could imagine, being able to spot Culture Rot early is actually, a gift well worth sharing. Speaking from experience, a business' core culture can sit rotting for months or years without any surface level disruption, it's only when a catalyst is triggered that Culture Rot bleeds into view.

Think of your employees and team as being thick skinned when the wind blows, but like paper when it blusters. This should give you an idea of how to react when you sense a disturbance of balance. If you fail to steady disruption at the source, you will start a chain reaction which will cascade through your entire company.

The Catalyst

The tremors usually start at the top, a disturbance in C-Suite leadership, or an unexpected event such as a 'worse than expected' financial report rocks the Jenga block from the top down. When this happens, months or even years of Culture Rot residue rise to the surface all at once. You have to act fast, before the rot has chance to take hold, otherwise that genie isn't going back into the bottle.

If the tremors from the top are left unchecked, it often causes visible tension with other senior colleagues, and the longer this goes on the more chaotic it gets. You best believe you'll need a strong cultural foundation to delay the impacts long enough to stem the tide.

Spotting It Early

As the tower starts to sway, it is not uncommon to sense a change of atmosphere on work calls, some people work harder and become sharper edged, others start missing meetings and becoming noticeably disinterested. This is the nature of people in stressful environments, it's fight or flight.

You can't and shouldn't try to control this.

Heavy handedness, ego and contempt are your mortal enemies in this dojo, so wise up sensei. If you've ever watched Culture Rot happen in real time, you can see the warning signs as clear as day from this early stage. The amount of work being delivered decreases exponentially, meetings get pushed out, rumours swell - your business is developing a bad reputation with its people.

Suddenly your most dedicated team players are taking random days of annual leave, you start to hear anecdotal stories about that one employee who has been offered a 15% salary increase for the same role at a competitor business, your more talented and outspoken team members are sowing dissent because you've undervalued them and their opinion.

If you get to this point, I have news for you, you're at the threshold already.

The Anatomy

The problem you face is that your core culture, its strength and ability to weather a storm are all defined by what you do before a catalyst is invoked. Often the catalyst isn't enough to destroy your business on it's own, it's the legacy of your culture that determines the way the cookie crumbles.

Spotting and preventing Culture Rot before it takes hold is only possible if you are actively aware of and engaged in negating the negative impact of any of the listed causes. It isn't enough to simply offer employment to people and to take a pound of flesh in return. Retaining your most talented people requires respect, active awareness of your employees needs and open and transparent leadership.

Your undercurrent is set by the way you treat your people, how much you really value them and their expertise and how you conduct business. A bad reputation and Culture Rot develops most commonly from attributable causes.

Common Causes

⇼ Under-valuing your employees, financially or morally;
⇼ Not recognising people when they go above and beyond for your business;
⇼ Allowing several big changes to happen in succession without clear and concise communication;
⇼ Undermining trust in your employees ability to do their work;
⇼ Sending long, tone deaf emails about changes which are likely to be unpopular;
⇼ Attempting to hide the obvious, undermining the intelligence of your employees;
⇼ Not listening to feedback and criticism of your mistakes;
⇼ Showing contempt for those brave enough to raise red flags;
⇼ Allowing negative or rude behaviour to go unchallenged, especially from more senior colleagues;
⇼ Repeatedly failing to keep promises, such as missing learning budgets, not fulfilling promises to modernise your tech stack;
⇼ False economy bonuses, where you overwork your team for peanuts, or worse yet the promise of a performance based bonus which you can't deliver against;
⇼ Your 'water-cooler' reputation sinks below the threshold.

Common Catalysts

⇼ Senior leadership disruptions;
⇼ Poor financial results, corporate restructuring or downsizing and redundancy;
⇼ Narcissistic personalities in leadership positions;
⇼ Micro-management or red tape;
⇼ A key team player or likeable personality leaves under sudden or unexplained circumstances.

Lastly, 'The Threshold'

All businesses have a different threshold - surmised by a list of factors too long to account for and nuances so micro in nature that describing them with mere words would never be enough. The overarching concept is rudimentary however, the threshold is the point where immediate corrective action is required and failure to do so leads to irreparable, long-lasting damage.

Your threshold is narrow, a highly sensitive and precarious place to be; once crossed, the process to revert the rot becomes a significant uphill struggle. In the businesses where I have witnessed Culture Rot take hold, I have only seen one company revert their culture issues after crossing their threshold.

It's worth knowing then, that the least costly course you can take is preemptive, deliberate action to build a company wide culture that thrives on openness, trust and consent. One where your employees are properly valued both financially and for their unique insights and expertise.