Why Organisational Culture Gets Lost Between Leaders and Teams and How to Fix It?

Culture is more than just a modern-day buzzword—it has long been a central concept in anthropology and human systems. In the organisational context, culture refers to a shared set of values, beliefs, and behavioural norms that guide how members interact with one another and with external stakeholders. When deeply embedded, organisational culture acts as a compass, aligning individual actions with the broader vision and goals of the company.

In high-performing organisations, leaders and Chief Human Resource Officers (CHROs) often prioritise "enculturation"—the process of socialising new employees into the company’s value system. From the moment new recruits are onboarded, organisations use that window of opportunity to instil the right ways of thinking, feeling, and behaving in the workplace. This process helps new members gradually internalise and embody the company’s cultural DNA.

When the leaders nurture culture intentionally, the benefits are tangible: improved performance, higher employee engagement, and stronger retention. Amazon provides a compelling example. Its culture, anchored in 16 Leadership Principles, emphasises customer obsession, rigorous goal setting, team alignment, and individual accountability. Amazon believes that exceptional outcomes are a product of high-performing teams—not individuals in isolation—and that such teams are best built on clearly defined values that explain not just what success looks like, but how it should be achieved.
 

The Cultural Disconnect

Despite its importance, culture often fails to trickle down from leadership to teams, and enculturation becomes a common challenge for most HR leaders. According to a Gartner report, 57% of HR leaders agree that managers fail to enforce the desired vision of culture within their teams, while 53% report that leaders in their organisation don’t feel accountable for demonstrating the desired culture. What is even more surprising is the fact that 97% of CHROs want to change some aspect of their organisation’s culture. They possess a clear vision of what they desire, but there is a large culture adoption gap on a day-to-day basis which hinders the cultural growth.

A poorly managed culture gradually erodes an organisation’s foundation, negatively impacting key areas such as:

1. Profitability
2. Customer Satisfaction
3. Employee Performance
4. Employee Retention

This often creates a cyclical problem—talent leaves because the work lacks quality, and the work lacks quality because the organisation lacks good talent.
 

The Gaps

In the post-COVID-19 world, employees seek more than just a paycheck. The modern workforce views the employee-employer relationship through a new lens—one where alignment of values and purpose is essential. This shift is evident with the fact that 70% of the current workforce believes their work is a core part of their life’s purpose and that your team is likelier to contribute to strong positives if their purpose in life aligns with yours as an organisation (McKinsey).

Values lie at the heart of organisational culture; they serve as the glue that binds individuals together and propels them in a single direction. Culture through values and purpose is a powerful and intangible force that fuels an organisation. However, there are often gaps between the culture envisioned by leadership and the culture experienced at the grassroots:
 

1st Gap: Unclear Values and Purpose

When an organisation has a unified and compelling vision—such as a relentless drive to achieve excellence within its field—employees who resonate with this mission tend to stay committed longer and contribute more meaningfully. Clear communication of values and purpose acts as a unifying force, fostering loyalty among those who share the same ideology.

Values serve as a non-contractual bond that everyone can uphold and protect. When the leaders communicate these transparently and convincingly, they can boost productivity by up to 60% and enhance the organisation’s reputation with stakeholders by at least 40%.
 

2nd Gap: Lack of Accountability in Measuring Organisational Culture

While traditional financial and operational KPIs are easier to track, measuring and monitoring culture KPIs is extremely difficult, yet, becoming increasingly essential for effective leadership. Despite this growing importance, many organisations still lack the tools to assess cultural development. A recent Deloitte survey found that although 78% of executives consider culture critical to business success, only 23% believe their organisations are equipped with KPIs to measure it effectively.

Leaders are primarily responsible for shaping and sustaining a strong organisational culture. By introducing culture KPIs and linking them to leadership performance, organisations can better evaluate how well leaders align their teams with core values and strategic goals. This also provides insights into how leaders foster inclusion, engagement, and team productivity while upholding the organisation’s core ethos.
 

3rd Gap: Misaligned Incentives and Recognition

Recently, Shopify conducted an internal survey to assess whether employees felt adequately recognised and appreciated. The results revealed that 82% of employees felt more satisfied when they received recognition at work, while those who lacked recognition were twice as likely to consider leaving the company. It is widely understood that happy and recognised individuals tend to contribute more effectively to the organisation’s success.

Incentives serve as powerful motivators, and when implemented effectively, they can enhance both employee engagement and overall business performance. However, organisations tend to focus primarily on performance metrics which are more aligned with business outcomes, when designing incentive and recognition programmes. The business-centric mindset often affects a leader’s ability to ask deeper questions such as: Did we achieve success in the right way? Will our stakeholders consider our methods ethical enough to be documented and scaled for the larger good?

Establishing the right and scalable indicators for culture-building and rewarding behaviours that align with core values can unlock the true potential of an organisation’s culture. 
 

4th Gap: Enculturation is Not an Active Aspect of Learning & Development

According to a CHRO survey conducted by the Corporate Leadership Council (CEB), 92% of CHROs agreed that organisational culture has a significant financial impact. The report also highlighted that a majority of CHROs believe their culture is not keeping pace with evolving strategic priorities, with a lack of intentional enculturation identified as a key reason for this lag. 

While most CHROs feel confident in defining a new cultural vision, they often encounter challenges in implementing and embedding it within their systems. This underscores the critical need for ongoing culture training—moving beyond values introduced during onboarding to consistent reinforcement in daily work life. Cultivating a strong, aligned culture requires active, continuous effort and deliberate education at all levels of the organisation.

The Role of Leaders in Bridging the Culture Gap

One of the most valuable contributions a business owner can make is empowering CHROs and senior executives to become stewards of organisational culture. This responsibility should cascade across all leadership levels, ensuring that core values are upheld from the top down and across teams.

To monitor and reinforce culture, leaders can adopt tools and frameworks that track relevant cultural indicators like employee engagement, turnover, satisfaction, absenteeism, Net Promoter Score and Employee Burnout Rate. Recognition and reward systems should be designed to celebrate behaviours that strengthen the company’s values, fostering a more engaged and aligned workforce.

CHROs can take a creative approach by researching and identifying micro-cultures within the organisation. These are informal, smaller cultural ecosystems that often influence how people work and collaborate. Bridging these micro-cultures with the larger organisational culture helps build unity while respecting diversity. Google’s “20% time” policy is a great example—giving engineers one day a week to work on passion projects, integrating personal interests into the company culture and driving innovation.

Anand Vijayasankaran, Assistant Professor, Organisational Behaviour at ISB opines, “Culture is built through consistent actions, everyday conversations, and leadership accountability. When leaders model values, measure what matters, and intentionally integrate culture into daily operations, they champion belief systems that outlast them.”

Ultimately, culture is a dynamic entity. Just as businesses scale and individuals grow, culture too must evolve. Leaders who actively shape and scale culture contribute not only to employee satisfaction but also to the long-term sustainability and success of the organisation.

Image Credits: Delynn Talley from Pixabay