The Cost of Ignoring Culture Debt
Culture debt builds up when you overlook small issues in how people behave at work. Like financial debt, the longer you leave it, the more interest it accrues. A missed opportunity to address an eye-roll in a meeting, an off-hand comment, or a subtle exclusion can turn into something much bigger: i.e. a culture that quietly permits misconduct, bullying or disengagement.
Why small things matter
Deviation amplifies: Research shows that minor negative behaviours can escalate into larger misconduct if they aren’t checked early (Bressler & Von Bergen, 2023).
Broken windows effect: Tolerating “small cracks” in culture sends the message that bigger breaches are acceptable. Studies applying the broken windows theory to organisations show how ignored incivility or rule-bending normalises deviance (Üzüm, Özkan & Çakan, 2022).
Hidden erosion: Over time, these lapses corrode trust and psychological safety. People stop speaking up, morale declines and reporting falls (McDonnell et al., 2021).
The real cost of culture debt
Declining team performance as disengagement spreads.
Higher turnover and recruitment costs when good people leave.
Increased risk of formal grievances, misconduct cases and reputational harm.
Leaders spending more time firefighting than leading.
Culture debt rarely shows up on a balance sheet, but it drains resources all the same. The longer it goes unchecked, the more expensive it is to repair.
Paying it off early
The most cost-effective approach is simple: address the small stuff:
Notice the minor behaviours that don’t align with your stated values.
Intervene early and consistently, especially as a leader.
Create an environment where speaking up feels safe.
Treat culture health as an ongoing investment, not a one-off project.
Our Culture Repair Diagnostic is a great example of an intervention that identifies the small but powerful changes organisations and teams can make, that stop unhealthy patterns taking root. It gives you the insight and tools to address hidden culture risks before they become expensive to fix.
Takeaway
Culture debt compounds over time. Addressing issues early saves you from higher costs in lost trust, performance, and reputation.
References:
Bressler, M. S., & Von Bergen, C. W. (2023). Sweat the small stuff: How small incidents of negative workplace behavior lead to larger misconduct. Research in Business and Economics Journal, 18(1), 1–15.
Üzüm, B., Özkan, E., & Çakan, S. (2022). Moral disengagement, organizational broken window, person–organization fit as an antecedent, Machiavellian leadership as a moderator. Journal of Organizational Development and Academic Research, 7(2), 55–72.
McDonnell, M.-H., King, B. G., & Soule, S. A. (2021). When are organizations punished for organizational misconduct? Research in Organizational Behavior, 41, 100148.
Cramwinckel, F., Van Gils, S., & Van Quaquebeke, N. (2024). Impacts of workplace culture on deviant behavior: The role of organizational rots and reporting mechanisms. SAGE Open, 14(1), 1–14.
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