How Workplace Culture Unlocks Organisational Success

Jim Collins Concepts on Discipline in Chaotic Times

Trust lessons for leaders from global expert Rachel Botsman

Picture one business - let's call it **Awesome Company** - where the energy is electric, colleagues ping each other for ideas, the CEO knows everyone by name, and each Monday is met with enthusiasm rather than dread.

Now imagine another workplace, blocks away, (let's call this one **Fearsome Company**) where gossip is whispered in hallways and shared in private chats, there's high turnover and shaming and blaming, and employees tuck their heads in and try not to be noticed.

#### Different results

Same industry. Same talent pool. Same opportunity for success. _Dramatically_ different results. 

The reason? The Awesome vs. Fearsome workplace cultures. As anybody who's ever worked for a Fearsome type of company knows, toxic environments destroy even the best business plans.

It's as Peter Drucker famously observed, "Culture eats strategy for breakfast." 

#### Expert speakers on culture

Ahead of [Australia’s Workplace Culture Conference, CultureCon™](https://thegrowthfaculty.com/events/a02RG00000BEbXpYAL/overview?campaign_id=701RG00000kwtsrYAA&promo=Blog&type=Affiliate) in Sydney in September, let’s look what some of Growth Faculty’s guest speakers and authors have said about workplace culture and what is needed to build awesome work environments.

Two cultures. Two results.

Beyond superficial “vibes,” organisational culture comprises the **shared values**, **beliefs**, **assumptions**, and **behaviours** that characterise a workplace. It manifests in everything from formal policies to unspoken norms about how meetings are conducted.

The late Edgar Schein, lecturer, author, and a pioneer in organisational psychology, developed in 1984 a three-level model for understanding culture:

*   **Artifacts**: Visible elements like office layout, dress code, and company rituals
*   **Espoused Values**: The explicitly stated values and rules of behaviour
*   **Basic Underlying Assumptions**: The unconscious, taken-for-granted beliefs that determine behaviour, perception, and thought

Amy Edmondson, Harvard Business School professor and [psychological safety](https://thegrowthfaculty.com/articles/whatispsychologicalsafety) expert who built on Schein's work, explains: "Culture is created by what leaders pay attention to and reward. It's shaped by what gets measured and what gets celebrated."

What does Organisational Culture mean?

Toxic cultures extract tremendous costs from companies like our Fearsome friend. According to research from MIT Sloan Management Review, toxic culture is the single biggest predictor of employee attrition, more significant than compensation issues.

[Signs of toxic culture](https://thegrowthfaculty.com/articles/Toxicworkplaceculture) include:

*   Low morale and sarcasm is rife
*   High turnover, burnout, and absenteeism
*   Bullying and gossip
*   Lack of accountability, especially among senior leaders

Patrick Lencioni, author of [_"The Five Dysfunctions of a Team,"_](https://thegrowthfaculty.com/articles/fivedysfunctionsofateam) points out: "The cost of creating and maintaining a healthy culture is far less than the cost of managing a toxic one." 

His work shows that [what destroys teams](https://thegrowthfaculty.com/articles/what-destroys-teams) is a lack of trust, with toxic cultures spending significantly more on recruitment, training, and customer acquisition due to poor retention and reputation.

Signs of a toxic culture

Creating a healthy culture requires intentional effort. Here are key components:

**1\. Purpose-Driven Foundation**

Organisations with strong cultures typically align around [meaningful purpose](https://thegrowthfaculty.com/articles/leadingwithpurpose). As leadership expert Simon Sinek explains: "People don't buy what you do, they buy why you do it."

In the book _“No Rules Rules”_ (co-written with Erin Meyer), Reed Hastings, Netflix CEO, reinforces this: "A company's culture is the foundation for future innovation. An entrepreneur's job is to build the foundation."

**2\. Psychological Safety**

[Amy Edmondson](https://thegrowthfaculty.com/articles/amy-edmondson-psychological-safety-expert) defines psychological safety as "a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes."

And, back in the 1960s, academics Edgar Schein and Warren Bennis described psychological safety as concerning _“a person’s anxiety about being basically acceptable and worthwhile.”_

Edmondson's research demonstrates that teams with high psychological safety **outperform** others because members feel secure taking interpersonal risks. 

Leaders build psychological safety by:

*   Modeling vulnerability
*   Inviting participation
*   Responding productively to failures and mistakes
*   Demonstrating that different perspectives are valued

(See our blog [10 Tools to Develop Psychological Safety at Work](https://thegrowthfaculty.com/articles/psychologicallysafeworkplaces))

**3\. Continuous Learning Environment**

People want to grow, so it’s not surprising that learning opportunities improve the work culture.

University of Technology in Sydney, [research](https://plus.uts.edu.au/resources/learning-at-every-level/) shows that organisations with strong learning cultures have engagement and retention rates that are between 30-50% higher than those without.

The key is for leaders to role model learning.

As Liz Wiseman, author of _"Multipliers,"_ says: "The best leaders are the best learners. They have an appetite for growth and are willing to work at their own learning." Her research shows that leaders who create learning cultures attract better talent and achieve better results.

**4\. Clear Values in Action**

Values must move beyond wall plaques to lived experience. Brené Brown says in _“Dare to Lead”_: "When values aren’t clear, we can easily become paralysed – or, just as dangerous, we become too impulsive. Operationalised values drive what I think of as the sweet spot of decision making: thoughtful and decisive."

Like Reed Hastings who heads up Netflix, Ray Dalio, founder of Bridgewater Associates and author of "Principles," built his firm around ["radical transparency, "](https://thegrowthfaculty.com/articles/pain-to-progress-interview-with-ray-dalio)a value that manifests in specific practices like recording meetings and encouraging direct feedback at all levels of the company.

"It's your responsibility to make sure communications from your people flow freely, so encourage it by giving them plenty of opportunities to speak up," he writes in _"Principles."_

Building a positive workplace culture

Creating culture requires consistent actions, not just declarations. Effective culture-building activities include:

**Structured feedback processes**

When Brené Brown gets feedback, the _Dare to Lead_ author says she repeats to herself _“I’m brave enough to listen,” “There’s something valuable here,”_ or _“This is the path to mastery.”_

On _giving_ feedback, Kim Scott, author of [_“Radical Candor,”_](https://thegrowthfaculty.com/articles/GREATIDEASRadicalCandorbyKimScott) says the trick is to challenge directly but also care personally.  When communicating in a work setting, the Radical Candor system is _Listen – Clarify - Debate - Decide -Persuade – Execute – Learn - Listen_

Building on this, [Michael Bungay Stanier](https://thegrowthfaculty.com/articles/michaelbungaystaniercoachingquestions), author of _"The Coaching Habit,"_ suggests leaders should "stay curious a little longer and rush to advice-giving a little more slowly." His research shows that businesses that build coaching-rich cultures outperform peers.

In a nutshell, implement regular, two-way feedback sessions focused on growth rather than evaluation.

**Recognition programs**

Recognition programs reinforcing core values substantially impact culture. When employees are recognised specifically for embodying company values, those values become more tangible.

As Susan David, author of [_"Emotional Agility,"_](https://thegrowthfaculty.com/articles/leadersEQsusandavid) writes: "Recognition isn't just about rewards, it's about seeing people fully and acknowledging their contributions."

For work cultures, it’s a no-brainer. Providing employees with positive recognition or praise results in increased dopamine levels which promotes employee engagement (Robison, 2006).

**Culture at onboarding**

[Jim Collins](https://thegrowthfaculty.com/articles/jim-collins-leadership-researcher-the-growth-faculty), author of _"Good to Great,"_ has many [leadership quotes](https://thegrowthfaculty.com/articles/bestleadershipquotesJimCollins) about getting the right people "on the bus" from the start. “Onboarded” author Brad Giles would agree but add that [onboarding employees correctly](https://thegrowthfaculty.com/articles/importanceofonboarding) is critical to a good work culture.

Effective cultural onboarding includes:

·        ‘What Success Looks Like’ in a role scorecard

*   Explicitly discussing values and expected behaviours
*   Connecting new hires with culture ambassadors

Whitney Johnson, disruption theorist and author of _“Build an A Team,”_ would add:

·        Set short term goals: clearly define one or two projects for your new employee, with maximum budgets and precise deadlines

Culture-building activities that work

Remote and hybrid work presents unique cultural challenges. Leaders must realise there is [new playbook for leading hybrid and remote teams](https://thegrowthfaculty.com/articles/playbook-for-leading-remote-and-hybrid-teams), and be more intentional about culture when teams are distributed.

Takako Hirata, author of _Wall Street Journal_ bestseller [_"The Virtual Leader,"_](https://www.simonandschuster.com.au/books/The-Virtual-Leader/Takako-Hirata/9781637741245) stresses the importance of keeping rituals alive.

She says leaders should identify which rituals matter most to their teams and actively preserve or reimagine them in virtual contexts. This might include virtual coffee breaks, end-of-day wrap-ups, or weekly team check-ins.

Key considerations for hybrid culture include:

*   Creating equitable experiences for in-office and remote workers (notice them in meetings!)
*   Establishing clear communication norms and expectations
*   Building virtual spaces for casual connection
*   Measuring outcomes rather than visual productivity signals

Seth Godin has said that "Culture is what happens when the boss isn't in the room."

And, in his book _"Song of Significance,"_ he could be speaking about remote and hybrid workplaces when he says: "An organisation of any size can effectively move forward by asking What do humans need?"

> "An organisation of any size can effectively move forward by asking 'What do humans need?'" - Seth Godin

When teams work remotely, shared values and clear expectations are critical - as are the very human traits of trust, empathy, and compassion.

Culture in hybrid and remote Workplaces

There is no doubt artificial intelligence (AI) will have a huge impact on workplace culture. 

Founder of Australia’s Workplace Conference [CultureCon™](https://thegrowthfaculty.com/events/CultureCon2025-Australian-Workplace-Culture-Conference/overview), [Karl Treacher](https://thegrowthfaculty.com/articles/the-ai-revolution-and-culture), says businesses must consider how AI adoption affects their cultural foundation.

"This isn't just another technology implementation," Karl has said. "It's a fundamental shift in how humans and machines collaborate. We're moving from tools to teammates."

Karl says success in the AI era requires reconfiguring how businesses operate. Treacher outlines several ways this will pan out:

*   Moving from traditional management approaches to human-centric models
*   Implementing a "Culture of Abundance" mindset
*   Creating robust governance frameworks that align with regulations like the [EU AI Act](https://www.europarl.europa.eu/topics/en/article/20230601STO93804/eu-ai-act-first-regulation-on-artificial-intelligence) (The AI Act was published in the EU's Official Journal on 12 July 2024. It entered into force in August 2024)
*   Building [psychological safety](https://thegrowthfaculty.com/articles/whatispsychologicalsafety) as a foundation for AI integration

There may be a role for AI in helping build more empathetic cultures.

On X (formerly Twitter), [Adam Grant](https://x.com/AdamMGrant/status/1815838399686926485), organisational psychologist, recently wrote: _Machines have surpassed humans in empathy. New evidence: AI beat humans in detecting emotions and giving support. As long as people didn't know AI created the messages, they felt more heard._

AI and its impact on workplace culture

_"Reimagine Inclusion"_ author Mita Mallick says this is a challenging climate for Diversity, Equity, and Inclusion particularly in the US, where there's been a noticeable backlash.

Yet organisations with strong cultures recognise the part that diversity, equity, and inclusion play in their success.

"Inclusion, at the end of the day in the workplace is, ‘I work for you, I feel valued, I feel seen, I feel recognised. My voice matters, my work matters’," she explained. 

Laura Liswood, author of _"The Loudest Duck,"_ would agree: "Diversity is being invited to the party. Inclusion is being asked to dance. Belonging is dancing like no one is watching."

A culture of [inclusion and belonging](https://thegrowthfaculty.com/articles/inclusionandbelongingatwork) requires:

*   Examining how current cultural norms might privilege certain groups
*   Building inclusive decision-making processes
*   Creating psychological safety for different perspectives
*   Measuring [inclusion](https://thegrowthfaculty.com/articles/Creating-Equitable-Workplaces) alongside diversity metrics

Indra Nooyi, former PepsiCo CEO and author of [_“My Life in Full,”_](https://thegrowthfaculty.com/articles/Indranooyimylifeinfull) has said, "We can’t pray or wish for diversity. We need intervention, attention, mentoring and development of those minorities to ensure all are represented in our organisations."

_"When people feel that they are able to bring their emotional truth to the workplace with leaders who are compassionate and curious rather than leaders who want the answers, that is a first building block of emotional agility"_ - Susan David

The critical role of DEI in culture

Sometimes a company will need to transform its culture, whether due to changing markets, mergers, or recognition that current culture isn't serving business needs.

“We see too many organisations trying to jam too much change in,” says [Dr Jen Frahm](https://drjenfrahm.com/), expressing her concern about the overwhelm and exhaustion she's seen since the pandemic.

Compounding the problem, not enough “frontloading” work being done _before_ changes are introduced, she told our Emerging Leaders Program ["resistance to change"](https://thegrowthfaculty.com/articles/session-3-emerging-leaders-program) session. 

This lack of frontloading results in what Jen calls "a ‘MOP AND BUCKET IN AISLE 3!’" situation, because you haven’t done the work up front,” she says.

Effective culture change includes:

1.  **Honest Assessment**: Understanding current culture through multiple lenses
2.  **Clear Vision**: Articulating the desired culture in specific, behavioural terms
3.  **Leadership Modelling**: Leaders demonstrating new cultural norms
4.  **Systems Alignment**: Adjusting systems and processes to reinforce desired culture
5.  **Measurement**: Tracking cultural indicators alongside business metrics

Culture change: When and How

"Accidental cultures" are workplace cultures that are formed without deliberate design. These cultures often reflect the personalities of founders or early leaders rather than strategically-chosen values.

Jim Collins who writes about the importance of being deliberate at length in his business classic _"Good to Great,"_ is well known for saying "Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice and [discipline](https://thegrowthfaculty.com/articles/jim-collins-on-discipline-in-chaotic-times)."

Moving from accidental to intentional culture involves:

*   [Talent density](https://thegrowthfaculty.com/articles/jim-collins-on-discipline-in-chaotic-times), i.e. Jim Collins's concept of getting only the right people on the bus
*   Explicitly defining desired culture
*   Identifying gaps between current and desired states
*   Creating systems that reinforce desired behaviours
*   [Building accountability](https://thegrowthfaculty.com/articles/accountabilityproductivity) for cultural contribution at all levels

Accidental cultures vs. intentional cultures

Peter Drucker's maxim "what gets measured gets managed" applies to culture. While culture feels intangible, several indicators provide insight:

*   Employee engagement scores
*   Retention metrics (especially regrettable turnover)
*   Internal mobility and promotion rates
*   Customer satisfaction and retention
*   Collaboration and innovation metrics
*   Psychological safety assessments

At [CultureCon(tm) 2024](https://thegrowthfaculty.com/articles/culture-con-2024-summary), [David Larocca](https://www.ey.com/en_au/people/david-larocca), EY CEO & Regional Managing Partner, Oceania, shared the results of the survey EY conducted as part of its whole-of-firm transformation journey.

 “I knew we weren’t perfect. It’s better to surface difficult issues,” explained David. He said that 4500 people were spoken to with the results showing that while 94% felt safe and 74% rarely felt excluded, 15% had experienced bullying, 10% sexual harassment, and 8% racism.

A task force was established. David said through listening, learning, and establishing foundations they are making good progress.

Measuring cultural health

When built intentionally and consistently reinforced, culture creates an organisation that competitors struggle to imitate.  
  
Healthy, intentional cultures don't just perform better financially, they create environments where people can do their best work, develop professionally, and find meaning in their contributions.

As Seth Godin says, "_Work is the expression of our energy and our dreams. We owe those along for the journey the same dignity and connection we would like to receive in return."_

Conclusion: Culture as competitive advantage

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How Workplace Culture Unlocks Organisational Success

Join Us For Australia’s Workplace Culture Conference in September

Keep informed
Stay Inspired

How Workplace Culture Unlocks Organisational Success

Join Us For Australia’s Workplace Culture Conference in September

Keep informedStay Inspired

Keep informed
Stay Inspired