By Mike Kehoe | Leading Through the Algorithm™ | INSIGHTS
Every organization has a culture, whether its leadership intentionally creates one or simply allows one to develop. Some cultures encourage collaboration, accountability, innovation, and professional growth. Others gradually become environments where employees feel undervalued, communication breaks down, trust disappears, and fear begins to influence everyday decisions. What makes a toxic workplace particularly dangerous is that it does not always announce itself through obvious misconduct or dramatic leadership failures. Sometimes it develops quietly, hidden behind impressive mission statements, competitive salaries, attractive recruitment materials, and promises of a supportive work environment.
A company may publicly celebrate teamwork while internally rewarding individual competition. It may promote open communication while employees quietly learn that challenging leadership decisions carries professional consequences. It may describe its workforce as its greatest asset while consistently ignoring the concerns of the people responsible for delivering its results. The disconnect between what an organization says and what its employees experience is often where cultural deterioration begins. Over time, employees begin to recognize that the values displayed on office walls and corporate websites are not necessarily the values guiding decisions behind closed doors.
Throughout my more than 30 years of experience leading teams and working within different organizations, I have come to believe that culture is not defined by what appears in an employee handbook or during a carefully prepared orientation presentation. It is defined by what happens when employees make mistakes, when difficult decisions must be made, when someone challenges an established practice, and when leadership is presented with uncomfortable truths. A company's true culture is revealed not when everything is going well, but when something goes wrong. And while identifying an unhealthy workplace is important, an equally significant leadership question deserves attention: Can a company recognize that its culture has become toxic, acknowledge its responsibility, and successfully rebuild it? I believe it can, but only when the organization is genuinely willing to change.
Recognizing the Warning Signs Before They Become the Norm
One of the greatest challenges in identifying a toxic workplace is distinguishing between normal organizational difficulties and patterns of behavior that indicate something more serious. Every company experiences disagreements, operational pressures, demanding deadlines, and periods of uncertainty. These circumstances do not automatically make an organization toxic. Healthy workplaces can maintain high expectations, address poor performance, and make difficult decisions without compromising employee dignity. The warning signs become more concerning when negative experiences develop into recurring patterns that employees begin to accept as normal, particularly when those patterns are reinforced or ignored by leadership.
Communication is often one of the earliest indicators. In a healthy organization, employees understand expectations, receive meaningful feedback, and feel reasonably comfortable asking questions or expressing concerns. In an unhealthy environment, communication frequently becomes inconsistent, selective, or unnecessarily confrontational. Employees may receive conflicting instructions, discover important decisions after they have already been implemented, or hesitate to approach management because they cannot predict the response. Eventually, uncertainty becomes part of the working environment, and employees begin spending more energy managing relationships and avoiding conflict than concentrating on their responsibilities.
Another warning sign is the gradual disappearance of employee voice. When people stop offering ideas, reporting problems, or challenging questionable decisions, leadership may mistakenly interpret the silence as agreement. In reality, silence can be a symptom of resignation. Employees who repeatedly discover that their concerns are dismissed may eventually conclude that speaking up serves no purpose. Some withdraw emotionally while continuing to perform their assigned responsibilities, while others begin searching for opportunities elsewhere. The organization may continue functioning, but it loses something far more valuable than participation in meetings: it loses the knowledge, creativity, and discretionary effort of people who no longer believe their contributions matter.
Perhaps one of the most damaging characteristics of an unhealthy culture is inconsistent accountability. When certain employees are held to strict standards while others are protected because of their position, relationships, or perceived importance, trust begins to deteriorate. Employees notice when expectations change depending on who is involved, when poor behavior is tolerated from high performers, or when management demands accountability without demonstrating it. High turnover, recurring absenteeism, departmental conflict, employee burnout, and declining enthusiasm can provide additional signals. None of these measures independently proves that a culture is toxic, but together they may reveal an organization experiencing significant distress. Leaders must be willing to examine these patterns rather than automatically attributing them to employees who supposedly lack motivation, loyalty, or resilience. Sometimes the problem is not that employees have stopped caring. Sometimes they have stopped believing that leadership cares.
The Leadership Connection: Where Culture Becomes Reality
Organizational culture is influenced by policies, compensation, workloads, incentives, and business strategy. However, the everyday relationship between employees and their immediate managers plays an especially significant role in shaping how people experience their workplace. Gallup has reported that managers account for approximately 70% of the variance in team-level employee engagement. While that figure should not be interpreted as managers causing 70% of all cultural problems, it illustrates how strongly leadership behavior can influence the employee experience. An organization may have excellent corporate values, competitive benefits, and an inspiring executive leadership team, yet if employees consistently experience disrespect, favoritism, poor communication, or intimidation from their immediate managers, those positive organizational characteristics may do little to protect the workplace environment.
Managers translate company culture into everyday reality. They determine how expectations are communicated, how employees are recognized, how mistakes are handled, and whether team members feel supported during difficult circumstances. Unfortunately, organizations sometimes promote individuals into management positions based primarily on technical performance, operational results, or tenure without adequately preparing them for the human responsibilities of leadership. Being exceptionally good at a job does not automatically mean someone is prepared to lead the people performing that job. Leadership requires communication, emotional intelligence, conflict resolution, coaching, sound judgment, and an understanding of how human behavior influences organizational performance.
Without these capabilities, even a well-intentioned manager can unintentionally contribute to an unhealthy environment. More concerning is the organization that repeatedly overlooks destructive management behaviors because a particular individual delivers strong financial or operational results. When a manager consistently produces results while leaving behind disengaged employees, damaged relationships, and high turnover, leadership must consider whether the apparent success is concealing a much larger organizational cost. When companies reward results without examining how those results are achieved, they risk communicating that performance matters more than people. Eventually, that message becomes part of the culture itself.
Before a Company Can Fix Its Culture, It Must Be Willing to See It
This may be the most difficult stage of cultural transformation. Organizations frequently recognize the symptoms of an unhealthy workplace without acknowledging the behaviors and decisions contributing to those symptoms. Leadership notices increasing turnover but assumes employees are simply seeking better compensation. Employee engagement declines, and management concludes that the workforce has become less committed. Departments struggle to collaborate, and the organization responds with additional procedures rather than examining the relationships and leadership practices creating the friction. The symptoms are visible, but the underlying causes remain unaddressed because examining them may require leadership to question its own effectiveness.
Meaningful change begins when executives and managers become willing to ask uncomfortable questions. Are employees genuinely comfortable expressing concerns? Do managers demonstrate the behaviors the organization claims to value? Are accountability standards applied consistently? Are employees provided the resources and authority necessary to succeed? Does leadership respond constructively when someone identifies a problem? Most importantly, would employees describe the company culture the same way senior executives describe it? If the answers reveal a significant disconnect, the organization has an opportunity to begin an honest assessment rather than continuing to defend an environment that employees experience very differently.
That assessment must involve more than a traditional employee satisfaction survey. Confidential employee feedback, structured listening sessions, exit interview trends, management evaluations, retention data, and independent organizational assessments can all provide valuable information. However, the process must protect employees from retaliation and demonstrate that leadership intends to act on what it learns. Employees are unlikely to participate honestly if they believe their feedback could negatively affect their careers. Organizations must also resist the temptation to dismiss criticism as negativity. Not every complaint will be accurate or representative, but recurring concerns deserve serious examination. An organization cannot correct a problem it refuses to acknowledge, and employees cannot rebuild trust in leadership that continues to deny their experiences.
Rebuilding Trust Requires More Than Rewriting Corporate Values
When companies recognize cultural problems, their initial response sometimes focuses on highly visible initiatives. New mission statements are introduced, corporate values are rewritten, employee recognition programs are expanded, and team-building events are scheduled. Leadership announces a renewed commitment to creating a positive workplace, often accompanied by enthusiastic internal communications describing a new chapter for the organization. These initiatives may have value, but they cannot substitute for meaningful behavioral and operational change. A team-building event will not repair a workplace where employees fear retaliation. A revised mission statement will not restore confidence in a manager who repeatedly breaks commitments. An employee appreciation lunch will not resolve chronic understaffing, unreasonable workloads, or inconsistent accountability.
Culture changes when the everyday experiences of employees change. That requires organizations to examine how decisions are made, how leaders are evaluated, how employees are treated, and which behaviors are rewarded or tolerated. If a company claims to value transparency, leadership must communicate honestly, particularly when the news is difficult. If it promotes accountability, that standard must apply to executives and managers as well as frontline employees. If it celebrates empowerment, employees must receive meaningful opportunities to contribute rather than simply being encouraged to follow instructions more enthusiastically. Changing a company's culture is not primarily a branding exercise. It is a leadership and operational responsibility that requires consistent action across every level of the organization.
For organizations genuinely committed to improvement, cultural transformation should begin with establishing an environment where employees feel safe expressing concerns, acknowledging mistakes, asking questions, and contributing ideas without humiliation or retaliation. This concept, commonly referred to as psychological safety, does not eliminate performance expectations or accountability. Instead, it creates conditions where honest communication and responsible decision-making can coexist. The U.S. Surgeon General's Framework for Workplace Mental Health and Well-Being identifies protection from harm, connection and community, work-life harmony, mattering at work, and opportunities for growth as important components of healthier workplaces. These principles provide a useful foundation for organizations attempting to repair damaged cultures because they emphasize both organizational responsibility and the human experience of work.
Leadership accountability must become another central priority. Organizations should evaluate managers not only on operational outcomes but also on how those outcomes are achieved. Employee development, communication effectiveness, team stability, ethical conduct, and the ability to build trust should become meaningful considerations in leadership performance evaluations. Where management deficiencies exist, organizations should provide appropriate coaching, training, mentoring, and clearly defined expectations for improvement. However, there is an important distinction between a manager who lacks leadership development and one who repeatedly engages in harmful behavior despite intervention. Training can help individuals develop missing skills, but it cannot substitute for accountability when misconduct continues. In some circumstances, meaningful cultural improvement may require changing leadership responsibilities or removing individuals from management positions.
Restoring employee voice is equally important. This means creating dependable opportunities for employees to participate in decisions affecting their work, identify operational problems, and recommend improvements. Just as importantly, organizations must demonstrate what happens after employees provide feedback. If employees identify an issue and leadership responds with a reasonable corrective action, trust can begin to develop. If leadership cannot implement a recommendation, explaining the reasoning still demonstrates respect for the employee's contribution. Communication without follow-through is simply another broken promise, and employees who have experienced repeated disappointments are unlikely to respond positively to another initiative that produces no meaningful results.
Organizations must also examine the systems that influence workplace behavior. Even well-intentioned leaders can struggle to create positive cultures when compensation structures reward internal competition, performance targets encourage shortcuts, workloads remain unreasonable, or advancement decisions appear arbitrary. These organizational conditions can undermine trust regardless of how many leadership development programs are introduced. A company that rewards collaboration in its messaging but promotes employees based exclusively on individual results should not be surprised when teamwork deteriorates. The systems governing everyday operations must reinforce the behaviors leadership expects employees to demonstrate.
What Meaningful Cultural Recovery Looks Like
Although rebuilding an organizational culture can take considerably longer than a few months, I believe a structured 90-day initiative can establish a foundation for meaningful improvement. During the first month, leadership should focus on understanding the current environment through confidential employee feedback, turnover and engagement analysis, management evaluations, and direct conversations with employees across departments and organizational levels. The objective should not be to identify individuals who complain most frequently, but to uncover recurring patterns that reveal where trust, communication, accountability, and employee confidence have broken down. Serious concerns involving harassment, discrimination, retaliation, or workplace safety must receive prompt attention through appropriate formal processes rather than being delayed by a broader cultural review.
During the second month, the organization should begin translating its findings into visible changes. Leadership expectations should be clarified, managers should receive appropriate development and accountability plans, communication practices should be strengthened, and employees should begin seeing tangible responses to the concerns they raised. Some improvements may involve relatively straightforward changes to scheduling, communication, recognition, or decision-making authority. Others may require more difficult conversations about leadership behavior, organizational structure, or management responsibilities. The important distinction is that employees must begin experiencing change rather than simply hearing about it.
By the third month, leadership should evaluate whether these initial changes are producing observable improvements. Follow-up surveys, employee listening sessions, management reviews, and operational measures can help determine whether communication is improving, whether employees feel more comfortable raising concerns, and whether leadership commitments are being honored. This period should conclude with a longer-term improvement plan, clear ownership of responsibilities, measurable objectives, and scheduled progress reviews. A company should not declare its culture repaired after 90 days. It should be able to demonstrate that meaningful repair has begun and that leadership intends to sustain the effort.
There is another reality that deserves acknowledgment: not every organization is prepared to confront its cultural problems. Some leadership teams welcome feedback until that feedback challenges their own decisions. Others acknowledge employee dissatisfaction but remain unwilling to change the individuals, incentives, or operating practices responsible for creating it. In these environments, cultural improvement efforts can become symbolic rather than substantive. Employees are encouraged to participate in surveys, attend meetings, and embrace new organizational values, but the behaviors affecting their everyday experiences remain unchanged. This creates an especially damaging cycle because employees are repeatedly asked to believe in change that never materializes.
The willingness to change must be demonstrated through decisions, not declarations. A leader who genuinely wants to improve an organization must be prepared to hear uncomfortable truths, accept responsibility, invest in development, and make difficult personnel or operational decisions when necessary. If senior leadership refuses to address documented harmful behavior, meaningful transformation may remain out of reach regardless of how committed individual employees or middle managers become. Employees should not be expected to sacrifice their well-being indefinitely while waiting for an organization to fulfill promises it repeatedly fails to honor. Recognizing when a workplace is unwilling to change is an important distinction between having the opportunity to influence an organization and carrying responsibility for decisions beyond one's authority.
The Human Cost of a Culture That Has Lost Its Way
When discussing toxic workplace culture, it is easy to focus on turnover percentages, engagement scores, productivity, and financial performance. These measures matter, but they do not tell the entire story. Behind every statistic is a human experience. There is the employee who once contributed ideas enthusiastically but now remains silent during meetings. The experienced manager who wants to support their team but feels powerless within an unhealthy system. The talented professional who begins questioning their abilities because their efforts are consistently dismissed. And the new employee who enters an organization with optimism, only to discover that the culture described during recruitment bears little resemblance to the workplace they experience.
These experiences influence more than organizational performance. They can affect confidence, motivation, professional development, and how individuals approach future employment relationships. This is why cultural recovery must involve more than improving business metrics. It must restore dignity, fairness, trust, and the belief that individual contributions matter. Employees do not require perfect leaders, and they do not expect every organizational decision to favor their personal preferences. They do, however, deserve leaders who are willing to listen, accept accountability, communicate respectfully, and demonstrate a genuine commitment to improvement.
As organizations increasingly adopt artificial intelligence, automation, and advanced workplace technologies, the human dimensions of leadership deserve even greater attention. Technology can help organizations analyze engagement trends, identify patterns in employee feedback, and improve operational efficiency. But technology cannot independently create trust between a manager and an employee, demonstrate moral courage in a difficult decision, or repair a relationship damaged by repeated failures of accountability. Those responsibilities remain fundamentally human, and they will continue to distinguish effective leadership regardless of how sophisticated workplace technology becomes.
In my work surrounding leadership and organizational development, I continue returning to a simple principle: culture is not something an organization simply provides to employees. It is something leadership and employees create through their daily interactions, decisions, and behaviors. Leadership, however, carries a greater responsibility because it establishes the conditions under which those interactions occur. A positive culture does not mean employees are never challenged, disagreements never happen, or difficult decisions are avoided. It means people can navigate those circumstances with mutual respect, consistent expectations, honest communication, and confidence that accountability applies throughout the organization.
A toxic culture can be repaired, but not through optimism alone. It requires the courage to identify what is broken, the humility to acknowledge leadership's role in creating or tolerating the problem, and the discipline to make changes that employees can genuinely experience. Organizations that undertake this work may discover that improving their culture strengthens more than employee satisfaction. It can create conditions for better collaboration, stronger retention, more effective decision-making, and a workforce that once again believes in the organization it represents.
Ultimately, the real test of a company's commitment to culture is not what its leaders say when employees are listening. It is what those leaders are willing to change after employees have spoken.
And perhaps the most important question any organizational leader can ask is this:
If every employee experienced our company exactly the way the people reporting directly to me experience my leadership, would I be proud of the culture we have created?
That answer may reveal more about an organization's future than any mission statement ever could.
Mike Kehoe writes about leadership, organizational culture, human judgment, and the evolving relationship between people and artificial intelligence through Leading Through the Algorithm™.
Explore more leadership insights and practical resources at www.leadingthroughthealgorithm.com.