A Healthy Business Begins with Healthy People (The Root Cause Leadership Series™)

Why the daily behaviors leaders ignore ultimately define the character and performance of their organizations.

By Marshall Krupp, Certified EOS® Implementer | Executive Leadership Advisor | National Speaker

A CEO once invited me to spend a day with his leadership team because, despite impressive financial performance, he was troubled by a growing sense that something was wrong inside the organization. Revenue was increasing, customers were loyal, and the company continued to outperform many of its competitors. Yet employee turnover was rising, collaboration between departments had become strained, and managers seemed increasingly reluctant to address performance issues.

As our conversation unfolded, the leadership team offered a variety of explanations. Some blamed communication. Others pointed to hiring challenges or the pressures of rapid growth. Each observation contained a measure of truth, but none explained why so many seemingly unrelated problems had emerged at the same time.

Finally, I asked a different question.

“What behavior has everyone noticed but no one has addressed?”

The room became silent.

After several uncomfortable moments, the CEO acknowledged what everyone already knew. A senior executive consistently ignored agreed-upon processes, dismissed colleagues during meetings, and frequently failed to honor commitments. Because he generated exceptional financial results, leadership had convinced themselves that confronting the issue would create unnecessary disruption. They tolerated the behavior, hoping it would eventually improve on its own.

Instead, something else happened.

Employees concluded that accountability depended upon position rather than principle. Respect became optional for some people but mandatory for others. Over time, the organization’s stated values quietly lost credibility—not because they were poorly written, but because they were inconsistently practiced.

That conversation has remained with me because it revealed a leadership truth that applies to every organization, regardless of its size or industry.

The culture you tolerate is the culture you create.

Leadership Reflection

Many leaders believe organizational culture is shaped primarily by mission statements, core values, recognition programs, or employee engagement initiatives. Those are valuable tools, but they are not the foundation of culture.

Culture is created through the daily decisions leaders make, especially the decisions about what they are willing to ignore.

Employees learn far more by observing leadership behavior than by reading employee handbooks. Every exception, every avoided conversation, and every inconsistency teaches people what the organization truly values.

The Leadership Principle

Organizational culture is not defined by the values displayed on the wall. It is defined by the behaviors leadership consistently reinforces—and the behaviors leadership repeatedly tolerates.

Why This Matters

One of the greatest mistakes leaders make is confusing symptoms with root causes. Low morale, declining trust, employee turnover, poor communication, and inconsistent accountability are often treated as separate problems requiring separate solutions. In reality, they frequently share the same root cause: leadership has allowed behaviors that conflict with the organization’s values to continue unchecked.

People naturally adjust their expectations to match what they experience. When commitments are routinely broken without consequence, employees conclude commitments are optional. When disrespectful behavior is excused because someone is a top performer, they conclude results matter more than respect. When leaders avoid difficult conversations, others learn that accountability is negotiable.

Organizational culture expert Edgar H. Schein, Professor Emeritus at the MIT Sloan School of Management and one of the world’s leading authorities on organizational culture, observed:

“The only thing of real importance that leaders do is to create and manage culture.”

His research reminds us that culture is not an accident. It is the cumulative result of leadership decisions repeated over time.

Leading Yourself

Healthy organizational cultures begin with personal leadership. Before asking whether employees are living the organization’s values, leaders should honestly examine whether they are modeling those same values themselves.

Do you keep your commitments? Do you arrive prepared? Do you listen respectfully to opposing viewpoints? Do you admit mistakes? Do you hold yourself to the same standards you expect from everyone else?

Leadership credibility is built through consistency. Employees rarely expect perfection, but they do expect authenticity. When leaders consistently align their behavior with their stated values, trust naturally grows.

Leading Others

Accountability is often misunderstood as criticism or punishment. Properly practiced, accountability is one of the highest forms of respect because it provides clarity, fairness, and an opportunity for growth.

Leadership expert John C. Maxwell, whose work has influenced millions of leaders worldwide, famously said:

“People do what people see.”

Employees watch leadership carefully. They notice who is held accountable, who receives exceptions, and whether standards apply equally throughout the organization. When accountability is consistent, people gain confidence in leadership. When accountability varies based upon title or performance, trust begins to erode.

Leaders do not strengthen culture by avoiding difficult conversations. They strengthen culture by having those conversations with honesty, respect, and consistency.

Leading Relationships

Organizational culture never remains inside the company. Customers, vendors, business partners, and prospective employees eventually experience it.

Organizations known for integrity, responsiveness, and professionalism rarely achieve those reputations through marketing alone. They earn them because employees consistently demonstrate those behaviors in every interaction.

Likewise, organizations that tolerate internal inconsistency often discover that the same inconsistency eventually reaches their customers.

The Roman emperor and Stoic philosopher Marcus Aurelius, whose writings continue to influence leaders nearly two thousand years later, offered timeless wisdom:

“Waste no more time arguing about what a good man should be. Be one.”

The same principle applies to organizations. Rather than debating what a healthy culture should look like, leaders must consistently demonstrate it through their actions.

Monday Morning Leadership Challenge

As you begin your week, ask yourself and your leadership team five questions:

• What behavior have we been tolerating that contradicts our stated values?

• Where are we applying accountability inconsistently?

• What difficult conversation have we postponed?

• What message does our silence send to the rest of the organization?

• What one action can we take this week that better aligns our behavior with our values?

Culture changes one leadership decision at a time.

Memorable Conclusion

Organizations rarely drift toward excellence. They drift toward whatever leadership consistently permits.

Every conversation you avoid, every commitment you overlook, and every standard you quietly lower teaches your organization something about what truly matters. Conversely, every courageous conversation, every consistently enforced expectation, and every leadership decision grounded in principle strengthens the culture you are trying to build.

The question is not whether you are shaping your organization’s culture. You already are. The only question is whether you are creating the culture you truly want. Because, in the end, the culture you tolerate is the culture you create.

Leadership Conversation

What behavior is your organization currently tolerating that may be quietly shaping its culture? I would enjoy hearing your thoughts in the comments.

Call to Action

If this article prompted you to reflect on your organization’s culture, I encourage you to share it with your leadership team. Meaningful conversations about the behaviors we tolerate often become the first step toward building healthier, stronger, and more accountable organizations.

To connect with Marshall Krupp, you can reach him at marshall.krupp@eosworldwide.com or at 714.624.4552. You can also schedule a telephone or Zoom meeting with him on Calendly at https://calendly.com/peerexecutiveboards.

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Marshall Krupp is a nationally recognized EOS® Certified Implementer. He is also a national speaker and a past award-winning Vistage Worldwide Chair, with a career in providing crisis management strategic advisory services to businesses, governmental agencies, and not-for-profit organizations. He is also a certified facilitator of the Wiley Everything DiSC suite of assessment tools and PXT Select.

EOS®, the Entrepreneurial Operating System®, takes entrepreneurial businesses on a journey to master the EOS® tools, enabling them to elevate their leadership teams, make better decisions, maintain a high level of accountability, and attain greater success more simply. The components of EOS® are Vision, People, Data, Issues, Process, and Traction, which, when used effectively, create a healthier organization with greater success.

Review more at www.peerexecutiveboards.com  and at www.eosworldwide.com/marshall-krupp.  Visit Marshall’s LinkedIn profile, posts, and articles at https://www.linkedin.com/in/marshallkrupp/.