From micromanagement to information hoarding, the warning signs of a struggling culture are often hiding in plain sight. Culture expert Colin Ellis shares how HR can diagnose the early symptoms and take meaningful steps toward cultural repair.

A struggling or failing organisational culture is never a surprise. It doesn’t unravel overnight – it’s usually the result of months, often years, of seemingly minor behaviours and misaligned values that gradually erode trust, performance, engagement and psychological safety.

“Someone, somewhere always knows how and what has gone wrong. They either chose not to say anything about it or they didn’t feel safe enough to,” says Colin Ellis, culture expert and upcoming speaker at AHRI’s National Convention and Exhibition on 19-21 August in Sydney.

When these behaviours become embedded in the culture and start driving high turnover, disengagement and reputational damage, they can be difficult and costly to reverse. That’s why it’s important to get on the front foot.

Below, Ellis shares common signals of a waning organisational culture and shares tips for HR practitioners and managers to address them.

Five early signs of cultural challenges

While behaviours like bullying and harassment are visible signs that something is amiss in your workplace, subtle insidious behaviours often lurk beneath the shadows, says Ellis.

He has identified six common signals that a larger cultural issue could be brewing:

1. Poor communication

“When leaders [or team members] hoard information or send inconsistent messages, trust quickly unravels,” says Ellis.

This behaviour may not always be intentional – it can stem from unclear priorities, a lack of alignment across leadership, or siloed decision-making – but its impact is the same: a disengaged, disoriented workforce.

However, often the behaviour is intentional. 

“Some managers or team members choose to withhold information from others or demand to be copied into emails. This not only complicates the communication process, it also undermines feelings of safety and drives people into self-protection mode. This causes connection and trust to fray.”

HR tip: Facilitate moments of connection

Find ways to bring cross-functional teams together, so they can learn and appreciate their commonalities rather than assuming a colleague is someone they need to compete with. 

“Look to implement team goals such as OKRs which encourage collaboration, rather than individual goals, such as KPIs, that generate self-interest,” says Ellis.

2. Values-behaviour gap

This is where the culture you market diverges from the culture you practice. When company values say one thing but workplace behaviours say another, employees take note.

“You see leaders behaving one way but there’s a different set of rules for other people. There’s often a big gap between what’s written on the wall and what’s lived in the workplace.”

This gap can appear in performance reviews, promotion decisions or how conflict is handled. When left unchecked, it breeds cynicism and disengagement.

HR tip: Co-create values with employees and leaders.

“Encourage people to think about a future state they can achieve. Too often, organisations use single words – integrity, communication, collaboration, but those are just words. Values are statements about what we want to become. 

“A value is something like, ‘Everybody counts’. When people come up with that, they feel a sense of responsibility for it. People leave the room and think to themselves: ‘These aren’t the executive’s values, they’re not HR’s values, they’re our values.”

To embed this into your organisation’s everyday language, Ellis suggests putting an item on your team meeting agenda that encourages people to discuss how they’ve worked towards one of the values in the past week or month.

“I often hear people say, ‘The CFO doesn’t want to invest in a culture program.’ But I think the CFO has more reason than anybody to invest in culture because of the returns.” – Colin Ellis, culture expert and upcoming speaker at AHRI’s National Convention and Exhibition

3. Blame culture

Blame cultures can show up in both subtle and overt ways, says Ellis.

“This might look like public criticism, scapegoating, finger pointing… and a fear of reporting anything, because people worry they’ll be the one out on their ear.”

Blame cultures suggest a lack of psychological safety and potential disconnection within teams.

Read HRM’s article on addressing blame culture.

HR tip: Encourage failing safely

Without safe mechanisms to surface issues, employees disengage or leave – and the underlying issues persist.

“One way to address blame cultures is to actively encourage a team to embrace experimentation while helping them understand what it means to ‘fail safely’. Making time for creative thinking leads to greater innovation, as employees are more likely to throw out their big ideas or try new ways of doing [things] in pursuit of greater value, not personal glory.”

Read HRM’s article on creating a culture that embraces failure.

4. Excessive control

Micromanagement, rigid policies and obsession with process over outcomes are hallmarks of control-based cultures.

“Micromanagers often want to keep everything to themselves. For them, it’s about bureaucracy over outcomes.”

At the peer level, competition for status, projects or recognition can also contribute to a culture of control and mistrust.

HR tip: Specific training for managers

“Educate leaders and managers on how to build and evolve vibrant culture. It doesn’t happen by chance. It’s not a skill that people are born with. It’s a whole level of technical knowledge that they need if you want to create psychological safety and achieve results.”

5. Disconnected leadership

Leaders may be physically present but culturally absent. Strategic focus is important, says Ellis, but it must be balanced with visibility and engagement.

“They exist in bubbles sometimes… They have the time, but they don’t often make the time to listen to the next tier down and find out what the real issues are.

“It’s almost like there’s a layer of tar between the executives and the frontline staff.”

HR tip: Encourage frontline interaction

The impact of that detachment is significant. If employees feel that the leadership team is out of touch with the things that matter, it’s more likely that dissent or disengagement could surface.

The antidote? Encourage managers to interact with frontline employees.

“I recently told one leadership team they had to get out of the office and into the field. The trust in that leadership team was around 42 per cent. They asked, ‘How do we turn this around?’ And I said, ‘Not by having meetings in the office, but by joining your people in their work – be that a sales call or a clinic.’”

Hear more from Colin Ellis and a range of other experts at AHRI’s National Convention and Exhibition on 19-21 August in Sydney. Secure early-bird rates today.

Cost impacts

Allowing these behaviours to fester comes at a price – and not just reputationally.

“This is what senior leaders really need to hear: financial performance deteriorates. You could have a combative culture or an overly pleasant culture – either way, you don’t hit your targets. It impacts your turnover. I’ve seen up to 42 per cent higher turnover in one organisation.”

Given the average cost to replace an employee in Australia is around $24,000, the case for culture isn’t soft – it’s strategic, he says. Plus, it also exposes the business to increased litigation.

“I often hear people say, ‘The CFO doesn’t want to invest in a culture program.’ But I think the CFO has more reason than anybody to invest in culture because of the returns.

“Make money available for culture-building and team-building activity, but make sure the activity delivers results. You should be able to see an immediate, tangible improvement from any kind of team-building.”

From exposure to action: repairing trust

When cultural issues come to light, leaders must act quickly and visibly. Ellis outlines a repair checklist to get you started:

☑️ Reset values – with input from all levels of the business.

☑️ Revise policies – to ensure they reflect new behavioural standards.

☑️ Create safe reporting pathways – ideally anonymous and free from retaliation, such as a whistleblowing policy.

☑️ Enforce consequences – especially for repeat offenders. It’s important to ensure managers have the skills to set expectations and hold people to these expectations.

☑️ Remove ‘brilliant jerks’ – high performers who damage culture must be held to account.

“Too often we shuffle toxic individuals around until someone else deals with them. And meanwhile, we lose the great employees who are fed up with the dysfunction,” says Ellis.

“Netflix had the ‘three-strikes-and-you’re-out’ rule. If you behaved poorly three times, you were done. There was no severance package. They’re not paying people off. They had really strong values. Their managers’ expectations were set really clearly; you knew what kind of culture you were walking into.”

Measuring impact

Resetting a culture is hard work. It will take time and effort. Part of that work is putting measurements in place to ensure things are staying on track.

Ellis suggests keeping tabs on the following metrics:

• Underperforming managers: “In engagement surveys, ask a few questions often, and never ask the same people twice in one year. This way, you get regular pulse surveys that allow you to drill down on a manager-by-manager basis, so you can spot the underperforming managers.”  
• Amount of people in performance management: “For large organisations, I always say you should be performance managing no more than three to five per cent of your workforce at any one time.” 
• Attrition rates: “The best organisations have attrition rates of around six to ten per cent – you can never please everyone.” 
• Meeting dynamics: “Are there any changes in the dynamics? Who is speaking, who’s not? Are we including all the right people? How many emails are sent or how many meetings are we having? These last two can help us manage attention and productivity drains.”

“Be as innovative as you can when it comes to meeting your culture,” he says. “Educate managers. Embed values into daily practice. Celebrate progress. And never let anyone – no matter how senior – be above the culture.”

Colin Ellis will be discussing how to create high-performance cultures at AHRI’s National Convention and Exhibition on 19-21 August in Sydney. Make the most of the early-bird ticket prices and secure your spot today.