Before Funding Culture, Diagnose It
“We don’t have a culture problem.” I hear some version of this often. I would not disagree.
The more useful question is whether the conditions of the business are creating friction in how the work gets done.
A layoff does not mean you have a culture problem. Neither does an acquisition, leadership change, restructuring or period of rapid growth. But each one changes how teams execute. Roles shift. Decisions move. Managers inherit more. Communication breaks in places it did not break before. What worked under the old conditions may not work under the new ones.
That is where I think organizations get into trouble. They wait for something to look like a “culture problem” instead of looking for where friction is already affecting the business.
The Pattern Is Not New
McKinsey surveyed more than 10,000 senior executives for The State of Organizations 2026 and found that 75% of organizations struggle to build a high-performance culture.
I have seen this pattern before. In 2016, Harvard Business Review published Why Diversity Programs Fail, Dobbin and Kalev's analysis of more than 800 firms across three decades, and the finding was uncomfortable. Several of the most widely used diversity interventions failed to improve management diversity, and some were associated with worse outcomes.
Different decade, familiar pattern. Organizations jumped to the intervention without diagnosing the problem first.
That is what culture failure looks like up close. A company buys an engagement platform when the real issue is that accountability lands differently depending on who you are and which manager you report to. Leadership training gets rolled out when the problem is structural: roles nobody can define, feedback that dies before it reaches a decision maker, managers carrying more people than anyone can lead well. Values campaigns go enterprise-wide when the toxicity lives in three departments and needs to be addressed there.
Three Things Worth Doing Before You Fund Anything New
Find where the pain concentrates, not whether it exists. Cut your engagement, turnover, absenteeism, employee relations and performance data by business unit, function, location, tenure band or leader where sample sizes allow. A company-wide score can look perfectly acceptable while one critical function is telling a very different story. An enterprise initiative can wash out the signal and leave you spending a year wondering why nothing moved.
Trace one symptom back to the practice that creates it. Take your most repeated complaint and follow it backward to a specific process, decision, structure or management practice. “Communication is poor” usually traces back into something concrete like decisions being made in one forum and announced in another, managers receiving information at the same time their teams do or nobody being clear on who actually owns the decision. You cannot train your way out of a process problem.
Price the current state before you price the fix. Put a number on what this is already costing you in preventable turnover, vacancy and ramp time, avoidable rework, absenteeism, overtime, manager hours spent re-explaining and mediating conflict, duplicated work and delayed decisions. Not every culture cost can be isolated perfectly. Enough of them can be measured to determine whether the problem warrants investment.
Leaders who walk into a budget conversation carrying that number have a different conversation than leaders who walk in with a proposal.
Why This Keeps Happening
The pattern is not that executives stopped caring about culture or that culture interventions fail to produce desired results. It is that they are asked to fund a solution before anyone has established what they are solving.
That is the argument behind Culture Has a P&L™.
Culture already has a financial impact. Before you fund the next intervention, can you see where it is creating value, where it is eroding value — and why?