Why Most Companies Get Corporate Culture Wrong, and How to Fix It.
Ask executives to describe their company culture and you'll hear words like "innovative," "collaborative," "customer-focused."
Ask employees to describe the same culture and you'll get entirely different answers. Research shows almost no connection, and sometimes negative correlation, between what leaders believe the culture is and how people actually behave.
Studies from Oxford, MIT, and Erasmus University Rotterdam found that positive culture increases employee productivity by up to 24%. Research from the University of Rome showed that creative cultures increase both the number and importance of patents filed. When Korn Ferry surveyed 500 senior executives, two-thirds attributed 30% or more of their company's market value to culture. One-third said 50% or more.
Yet most companies haven't updated their culture as aggressively as they've updated technology or strategy. Culture stays static while customers evolve, products change, and technologies advance.
The gap between perceived culture and actual culture costs money, productivity, and talent.
The Hyperculture Trap
Mats Alvesson, professor of business administration at Lund University, calls it "hyperculture"—performative environments where people say and do things that follow leadership demands rather than the company's true nature.
Leadership announces "we value work-life balance" while promoting only people who answer emails at 11pm. They declare "we embrace failure as learning" while punishing teams whose experiments don't work. They claim "customer obsession" while rewarding employees based on internal metrics that have nothing to do with customer outcomes.
Employees learn quickly. They perform the stated values in presentations and town halls. They follow the actual values in how they make decisions, allocate time, and judge each other's work.
The stated culture lives in slide decks. The actual culture lives in who gets promoted, what gets funded, which meetings matter, and what behavior gets rewarded when no executives are watching.
How to Diagnose Your Actual Culture
Most organizations rely on engagement surveys developed in 1932—tools designed to measure satisfaction, not culture. Lower-tech methods work better.
The Five Adjectives Exercise
Cary Cooper, professor of organizational psychology at Manchester Business School, suggests asking people for five adjectives that describe their company.
Do this across levels: executives, middle managers, front-line employees, new hires. The results frequently reveal little correlation between employees' perceptions and senior management beliefs, plus little overlap between what different teams see as the culture.
When your engineering team describes the culture as "competitive, intense, innovative, chaotic, exciting" and your sales team says "bureaucratic, political, slow, risk-averse, hierarchical," you have two distinct cultures operating under one roof.
Record and Analyze Meetings
Alvesson recommends recording meetings and bringing in culture experts to analyze interactions. What gets discussed versus what gets decided? Who speaks versus who gets heard? What topics create energy versus what topics create silence?
The meeting reveals culture unfiltered. How people interrupt each other, whose ideas get built on versus dismissed, what questions are safe versus dangerous, these patterns define how work actually happens.
Interview Founders About Original Principles
Bill Carr, former Amazon executive and co-author of Working Backwards, suggests interviewing executives about the principles they followed when they founded the company.
Often, a culture outlives the reason it formed. Teams may now consist of short-term contractors when the culture was built for long-term employees. Leadership may aspire to be a low-cost provider while the culture demands high-touch, high-quality service.
Understanding why the culture formed helps you decide whether it still serves the business you're building.
Netflix's 1,500-Comment Culture Deck
Netflix created a PowerPoint deck delineating company culture. The first iteration in 2009 ran to 125 slides. Last revised in 2024, the deck reflects 1,500-plus comments from Netflix's 13,000 employees.
The deck supports four major propositions: modeling itself on a professional sports team rather than a family, emphasizing people over process, being uncomfortably exciting, and striving to be great and always better.
"We're a sports team, not a family" means Netflix fires adequate performers to make room for exceptional ones. "People over process" means Netflix has few formal approval layers, managers use judgment, not follow rules.
The culture deck works because it names actual behavior patterns the company rewards, not behaviors leadership wishes employees would adopt.
How to Actually Change Culture
Roger Martin, professor emeritus of strategic management at the University of Toronto's Rotman School of Business, says leaders should begin with introspection: What do you dislike about the status quo? What's the biggest gap between desired outcomes and current reality?
Closing that gap requires different choices about what gets funded, who gets promoted, what gets measured.
Think From the Customer Back
Carr says staying relentlessly focused on the customer helped shape Amazon's culture as it grew from 11 employees in 1995 to over 1.5 million in 2024.
Making every decision by asking "What would be best for the customer?" drives resource allocation, hiring, and product decisions. Culture follows those decisions.
Pick One Indicator to Track Progress
Cooper suggests focusing on a particular objective, then giving individual units leeway about how they get there. Pick an indicator that demonstrates cultural change is underway.
Example: Publicizing gender pay gaps as a proxy for whether the company provides women with equal opportunities. When the indicator moves, you know behavior is changing. When it doesn't, you know your interventions aren't working.
Top Leaders Must Model the Behavior
At Amazon, founder Jeff Bezos realized early that articulating principles isn't enough. He focused on creating scalable, repeatable processes designed to support, reinforce, and cement principles into daily life.
A.G. Lafley, former CEO of Procter & Gamble, made store inspections and interviews with local customers a key part of every country visit. He didn't announce a new rule. He simply did it, sending a signal to managers about the value the company placed on customers.
Employees watch what leaders do, not what they say.
The Middle Manager Culture Problem
Spencer Harrison, professor of organizational behavior at INSEAD, argues that middle managers are a frequently overlooked source of strength.
Senior leaders set big-C Culture for the entire organization. Middle managers set small-c culture in their teams, the day-to-day norms that determine how work actually gets done.
When middle managers don't have buy-in, culture change doesn't reach the front lines. Executives announce new values, middle managers keep doing what they've always done, and nothing changes for the people doing the work.
Culture change requires giving middle managers autonomy to translate principles into practice in their specific contexts.
Global Culture Requires Translation Frameworks
Erin Meyer, professor at INSEAD and author of The Culture Map, writes that Chinese managers learn never to criticize a colleague openly or in front of others, while Dutch managers learn always to be honest and give the message straight. Americans wrap positive messages around negative ones. The French criticize passionately and provide positive feedback sparingly.
These learned cultural behaviors create predictable misunderstandings in global organizations.
Meyer developed a culture map framework differentiating between national cultures along different axes: explicit versus indirect communication, top-down versus consensus-driven decision-making, task-based versus relationship-based trust.
Making those unseen barriers visible helps global teams avoid interpreting cultural differences as incompetence or disrespect.
AI Integration Tests Cultural Frameworks
A Harvard Business School study observed 776 commercial and R&D experts at Procter & Gamble using AI in a one-day seminar. Teams with a GenAI member outperformed all other categories. Almost all teams that created truly exceptional solutions worked with a GenAI member.
Ethan Mollick at Wharton, who studies living and working with AI, thinks these findings suggest companies should reconsider team structures, training programs, and traditional boundaries between specialties.
Questions companies haven't answered: Does AI get a voice in meetings, or just provide data? Do you train AI on your cultural principles, or treat it purely as a tool? When AI suggests a decision that conflicts with cultural norms, who decides?
The companies that answer these questions intentionally shape how AI integrates. The companies that don't let AI integration reshape their culture by default.
What to Do in 2026
Run the five adjectives exercise: Ask people across levels and functions to describe the company culture in five adjectives. Compare results. The gaps show you where perceived and actual culture diverge.
Pick one measurable indicator: Choose something concrete you can track quarterly—customer interaction frequency, promotion criteria, budget allocation patterns. Something that would visibly change when culture shifts.
Audit executive behavior: What do senior leaders actually spend time on? What gets discussed in leadership meetings? What decisions get made quickly versus slowly? Executive calendars reveal actual priorities better than mission statements.
Brief middle managers: Explain the culture gap you found and the behavior you want to see. Give them autonomy to figure out how to translate big-C principles into small-c daily practices in their teams.
Ongoing: Model the behavior: Visibly and consistently demonstrate what you want others to do. Culture change doesn't require waiting for permission from above.
Bottom Line
Culture drives 24% productivity gains, measurable innovation improvements, and 30-50% of market value according to executives. Yet most leaders don't know their actual culture because they measure aspiration instead of behavior.
Diagnose reality through exercises, meetings, and founder interviews. Pick one measurable indicator to track progress. Model desired behaviors visibly and consistently. Give middle managers autonomy to translate principles into practice. Build cultural translation frameworks for global teams.
Organizations that update culture as aggressively as they update technology create sustainable competitive advantages. Organizations that let culture ossify while everything else evolves lose productivity, innovation, and talent to competitors who take culture seriously.
