CULTURAL ISSUES DON’T SHOW UP ON THE BALANCE SHEET…UNTIL THEY BLOW IT UP

There is a dangerous myth floating around boardrooms and leadership tables that says If it’s not on the financials, it’s not urgent.

I have seen this mindset ruin great teams and sink promising businesses. The truth that every smart leader eventually learns (often the hard way) is that Culture is a leading indicator while Financials are a lagging one. By the time cultural issues show up in your bottom line, they have already done the damage, you just did not see it coming.

Cultural decay is subtle; it does not start with a walkout. It starts with whispers, silences, meetings that feel heavy for no reason. A once-vocal team member suddenly says, “I’m fine,” but you know they are not. Leaders stop getting honest feedback, employees stop pushing back, innovation slows, blame creeps in. People stop caring about the outcome, they just care about surviving the day, and slowly, your team stops being a team and instead they become task-doers, clock-watchers, disengaged operators. Your turnover goes up, productivity goes down, morale tanks, and leadership spends more time firefighting than strategising. Then finally, you notice it in the numbers. Revenue dips, client satisfaction drops, talent walks. Culture, that “invisible nice-to-have,” just became an expensive problem.

As a People Strategist, I have worked with brilliant businesses that were bleeding behind the scenes, and let me tell you, culture always shows its cards…if you are paying attention. Here are a few red flags I always look for: 

• Silence in meetings, if no one is speaking up, contributing, or challenging ideas, you have fear.

• Leaders who blame poor performers without asking why, is a strange one because accountability matters, and so does curiosity. Is it a capability issue or leadership failure?

• The rise of ‘just doing my job’ energy without passion, ownership, initiative…all gone. People are coasting or hiding.

• Backchannel conversations when occurring frequently if more decisions are being made in DMs than in daylight, this shows you have a trust issue.

• Disappearing discretionary effort is displayed when people stop volunteering, stop caring, stop going the extra inch (let alone mile).

None of these show up on your P&L, but they are all flashing signs of a cultural crack about to become a chasm. It gets very real when culture hits your financials in ways you may not connect right away. It has been an interesting exercise to list the few ways I have come across in my experience:

• Turnover costs. Every lost employee costs you time, recruitment spend, lost knowledge, and onboarding fatigue.

• Burnout-related leave. When your culture does not protect energy, your people crash. And guess who foots the bill?

• Reputation damage. Toxic cultures leak, they show up in Glassdoor reviews, exit interviews, and word of mouth. Great people stop applying.

• Missed innovation. Disengaged teams do not innovate, they comply while your competitors are innovating.

Ignoring culture is like driving with a slow oil leak, the engine does not fail on day one, but when it does it is costly and completely preventable. If you want to be a leader that people follow (not flee from), it is time to stop treating culture like an HR initiative. Culture is a leadership responsibility and the best leaders I know do not wait for a crisis, they proactively run regular pulse checks and actually act on the feedback. I have known them to create psychological safety where truth can be spoken. They measure the invisible such as belonging, alignment, trust, clarity and they reward the right behaviours, not just the outcomes as well as address team dysfunction early before it shows up in complaints, resignations, or client errors.

Just motivational quotes on the wall will not fix culture, you fix it with leadership presence, clear expectations, and values that are actually lived, not just laminated. Your team’s culture is a reflection of your leadership, don’t make it an HR problem or a “people thing,” it is your brand, your legacy, your most important asset.

If your team feels safe, empowered, and energised, now that is leadership. If your team is checked out, burnt out, or fighting behind closed doors…you have a problem. The great leaders are the ones whose teams thrive while delivering them.

Cultural issues will never show up in your monthly financials, instead they will show up in your Monday mornings, in the passive-aggressive Teams chat, or in the creeping silence during your team huddles. If you are not careful, they will show up in your resignation pile.

So… what warning sign have you seen lately? And more importantly, what are you doing about it?

If you want to build a culture that performs without combusting, it starts at the top.And yes, I mean you.