essential previous learningIntroduction to Culture

Free Article – 7 Signs You Have a Culture Problem

Build a better business culture

Key learning outcomes:

  • Recognise that a business’s culture is formed at its inception.
  • Differentiate between a strong and a damaged culture.
  • Understand the importance of monitoring your business for signs of staff unrest or poor morale.
  • Conclude that a business’s culture is assessed both by staff and customers.


A business’s culture is to a large degree set by the business’s founder when they first open the doors. Over time, the culture evolves and changes because it is made up of the shared beliefs and values of the people who work in it. They may be influenced by the past history of the business, and there will be some deep-seated values and assumptions that will be hard to shift. However, as they say, one bad apple can spoil the barrel, so you need to constantly monitor your culture’s pulse. In this article we will take you through some of the key signs of a poor or toxic culture that you need to be on the lookout for in your business. We suggest you read our “Introduction to Culture” article in conjunction with this article to help build your understanding of business culture.

1. High staff turnover levels

People may leave your business for reasons unrelated to its culture such as starting a family or relocation. Others will leave for reasons such as greater pay or because the new job offers better opportunities. In these cases, your business’s culture did not offer what was needed to keep these people on board, so they sought an alternative.

High staff turnover can be very costly for your business, not just in terms of recruitment and training costs, but more importantly in the cost to your culture. Customers will wonder what is wrong with the business, as will potential or new employees. Also, it can upset those left in the business as they deal with the additional workload and the steady stream of new people coming into the mix.


  • Monitor your avoidable staff losses carefully. These are the people leaving by choice, not by circumstance.
  • Always conduct an exit interview. The departing employee may give you some good insight into what you could change.

2. High absentee rates

When a lot of your staff are taking sick days, you need to worry. Either you have a virus that is spreading such as the common cold, or worse a virus that is working its way through your culture. Of course people do get sick and they should stay home to get well. However, in a workplace with a strong culture, you will tend to see less people taking sick days.


  • Keep track of sick days. If you see a pattern emerging, you need to delve further to find out why.
  • How you deal with the issue needs to come from a place of support and not confrontation, as it may be a health issue that requires your help, or there may be a culture issue that is making people want to stay home.

3. Clock-watching mentality

If everyone is working in the office until midnight, it signals a problem with your culture. Similarly, when you see a mass sprint for the door at 5pm, there is a high likelihood that you have a culture issue. People who love their work tend to be happier to stick around past finishing time to complete a task or to go the extra mile for a customer or colleague. In a strong culture, people want to spend time together and you will often see them socialising outside of work or staying behind in the office chatting, rather than bolting for the door at the finish of every work day.


  • No one can expect or ask staff to work beyond their set hours; however, you need to watch for your team’s patterns. Of course, there may be a staff member who catches the train home at a regular time, or days when people have commitments outside of work.
  • Look out for those who express relief at the close of business or the rush for the door at closing time. If you sense it, you need to start working on your culture. Our articles “Management by Walking Around” and “One on One coaching” are good places to start.

4. Customer satisfaction

Customers can sense and are affected by bad culture. If a business has a poor culture, staff will not go the extra mile for customers and their dissatisfaction with their job will be evident when they deal with customers. An employee may technically still be doing their job, but a customer may be left feeling flat at the completion of the transaction. For example, we have all been to a restaurant where the decor was nice and the food tasted great, but we were left feeling the experience was mediocre. Everything was done well, but not with the warmth and depth of feeling you get when you walk into a place with a strong culture.


  • Watch for customer complaints or the absence of positive reviews from customers.
  • You also need to measure your repeat and referral business. Customers tend to talk about the great experiences they have had and recommend to others. They also talk about the poor or bad experiences; rarely, however, do they talk about the average. So no news in business is not good news.

5. Downturn in results

When you have a strong culture linked to the vision of a business, everyone works together to achieve success. A fractured or poor culture will negatively affect performance and staff attitudes. Think, for example, about high-performance sporting teams. At times you will see an upset when a weaker team with a strong culture outperforms one with more talent on paper but a poor culture. People perform to their best when they feel that they are part of a bigger picture and they are contributing to the result and are recognised for it.


  • In business it is essential to know your numbers. You should be monitoring the performance of your business, not just once a year at tax time but on a weekly and monthly basis. There will always be fluctuations in markets, and over time you will be able to see some trends. It there is a downward trend in the bottom line, it may be that your culture is affecting performance.

6. Office gossip

Office gossip can be the silent killer in a culture. Chinese whispers and secret conversations can spread bad feelings and miscommunication faster than a wildfire. More often than not the root cause is a lack of or poor quality communication from the leadership and management. Open and transparent communication is the secret to building a strong culture in your business. If everyone knows what is happening with the business and they have the opportunity to comment or make suggestions, there is less need for gossip or side conversations.


  • Lead from the front and be sure that everyone in your business knows you are available for questions, queries or discussion. Try not to rely on technology for communication. A weekly email to let everyone know what is happening is nice, but a quick chat as you pass their desk or a face-to-face discussion will do more to help nurture your culture. Any big news about the business needs to be communicated as soon as possible, and if possible, to everyone in the business at the same time.

7. Them and us mentality

When we hear staff members referring to management or the company as “them” or “they”, we know that there is potentially a culture problem. This type of language shows a clear disconnect between the leadership of a business and the staff. Culture is driven by a business’s leader and it essential that the leader’s language and actions are inclusive. A great leader often uses “we”; they ask rather than tell, and they listen more than they speak.


  • Listen to how people within your team speak to each other and how they speak about the business. Set the tone so there is no “they” in the business, just “we”. Similarly, as a team leader avoid using “I”.


Building a strong business culture takes a business leader a lot of consistent work and effort. A culture left to simply evolve and develop over time may be satisfactory if its foundations are sound, but often this laissez-faire approach can leave a business vulnerable to negative cultural change. When new people come into your business it is essential that you discuss the business’s cultural values and vision as part of the orientation process. Always be on the lookout for these seven danger signs, and take action as quickly as possible if some negative habits begin creeping in.

Did you enjoy this complimentary article?


Would you like to start driving positive changes in your business? Would you like to see increased productivity and profitability? Of course you would!

As part of our commitment to being a low cost yet highly effective service to help owners and managers of small to medium sized business, we are now offering the first month of your membership for just $1! This means you will get full access to all of the learning articles, tools and tips that our website has to offer and with a commitment to upload at least another 150 learning articles through 2015 there is also plenty more learning on the way. On top of this you will also receive our weekly newsletter to keep you updated on new learning for the week and much, much more!

You can cancel at any time, however, if you see the value in what we’re offering (and we’re sure you will!) your membership will automatically continue after your trial at the low cost of just $19.95 per month. So what are you waiting for? For just $1 you are getting full access to all of our content for 30 days risk-free, so come on and join our community today!


Success is giving it your Absolute Best!