Corporate culture is not having its finest moment. Gallup’s data shows employee engagement is in steady decline, with only 20 percent of employees engaged at work in 2025. The trajectory among managers is even worse, with mid-level management’s engagement scores falling from 31 percent three years ago to 22 percent today.

While cultural intelligence has traditionally focused on the cultural differences people encounter working with one another, the culture of an organization has arguably more impact on the day-to-day work experience. People are wondering, Is leadership accessible? How are decisions made? Are people trusted? Is my job safe? Ironically, these are the same issues I’ve been discussing with leaders for the last couple decades, but typically through the lens of national and ethnic cultures.

As a world of growing sameness is perpetuated by AI generated products and services, applying CQ to organizational culture might be where organizations need cultural intelligence most. Culture is what makes you stand apart from what everyone else is generating from Claude, Co-Pilot, and ChatGPT. But there are several headwinds making it increasingly difficult to develop and sustain a healthy organizational culture. With that resistance, however, comes an opportunity for the organizations that create a dynamic, culturally intelligent culture. Here are a few ways I’m thinking about this.

1. Constant change erodes culture

Culture depends on predictability. People learn what an organization values by repeatedly watching what happens when results fall short, how leadership responds to a difficult quarter, and what kinds of people are hired and promoted.

I recently met with a group of leaders from a company that has long been known for its healthy corporate culture. Employees have repeatedly rated the company as stable and consistent, regardless of economic shifts and leadership changes. They’ve earned many awards for being a great place to work. But since Covid, they, like many companies, have gone through a steady stream of restructuring and layoffs. As employees watch their peers lose their jobs and get asked to do more with less,  the healthy culture begins to erode.

Deloitte reports that the average employee now experiences ten significant enterprise changes a year, including reorganizations, technology initiatives, and culture transformations. In 2016, the average number was two. Employees are overwhelmed by how quickly work is changing and question whether any job is safe.  When reporting lines, priorities, and leadership teams keep shifting, employees become anxious. Leaders can’t promise certainty in an environment this volatile, so they need to find areas where they can offer consistency and stability. Cultural intelligence provides leaders with an ability to read what people need during periods of disruption along with a repertoire of behaviors that can be adjusted to provide stability and build trust based on the individuals and teams involved.

2. Strong cultures reinforce bias

There’s a long list of case studies about organizations with strong cultures, including places like Netflix, Emirates Airlines, IKEA, and Toyota. I’ve directly experienced the power of these companies’ cultures, and I’ve observed the success that can come from them. But a growing body of work challenges the assumption that a “strong” culture is a healthy one. In fact, the stronger the culture, the easier it becomes for bias to exclude those who don’t naturally fit with the way we “do things around here.”

Strong cultures typically mirror the values of the founders and their cultural backgrounds. There’s nothing wrong with that, but the danger is when values become synonymous with behavior. An organization might value transparent communication, something that transcends differences; but if they attach a behavior like “radical candor” as the only way to demonstrate transparency, they immediately exclude individuals and regions who use a more indirect communication style. Before long, a segment of the organization feels silenced or held back because they aren’t perceived as competent or confident.

There’s an interesting opportunity here for many former DEI professionals who now lead cultural transformation efforts. They’re ideally suited to ensure that the development of a strong, healthy culture is inclusive. Rather than implicitly favoring a particular style of communication or decision-making approach, they can help their organizations ensure core values are expressed through myriad behaviors. As I say repeatedly, whatever the cultural context, values are not the same as behavior. A culturally intelligent organization can express the same value through a diversity of behaviors.

3. Increased AI & Hybrid = Less Human

Culture is transmitted through people. Overhearing a conversation, exchanging small talk while walking into the office, or venting to a colleague after a difficult meeting are all part of what makes a culture become real. Hybrid and remote work offer enormous benefits, but they also eliminate many of these informal interactions that transmit culture.

My daughter has a coveted job as a fully remote graphic designer. I’m happy about the flexibility it provides her, and she’s a hard worker. But I sometimes worry about the impact for her of never working alongside her colleagues in person. Four and half years into her job and she’s never met her boss or any of her immediate teammates. It’s much more difficult for her to experience the culture of her company when she’s fully remote. Hybrid and remote work make it more difficult to develop and sustain a shared culture.

AI creates another layer of separation between people and the development of a healthy organizational culture. Even employees in the office spend hours every day communicating with AI to draft, analyze, and summarize content only to send it to a colleague who has their AI agent review it and draft a response. My colleague Connie Noonan Hadley finds a growing tendency for employees to turn to AI rather than coworkers for help with both work tasks and emotional support. What happens to a company’s culture when instead of turning to a colleague, we default to asking AI? Many people are back in the office, but they spend all day on virtual calls and consulting with an LLM.

When technology replaces conversations with colleagues, informal problem-solving, and other human interactions, organizations experience culture debt. Team leaders need to invest in relationships and interactions both to foster trust but also to accomplish great work together.

4. Senior leaders and employees experience different cultures

Finally, there’s a massive gap between how senior leaders and employees see the organization’s culture. Most of my work is with senior leadership teams but I always ask if I can get some time with individual contributors and mid-level managers, preferably without senior leaders present. I usually hear a very different description of the company culture. It’s not that the employees are always negative. But they describe the culture relative to their workloads, manager, return-to-office expectations, and other things that senior leaders might not perceive as overly “strategic.”

Senior leaders spend a lot of time with each other and with high-profile customers and employees. While many executives pride themselves on having a clear set of values reinforced through engagement surveys and town hall meetings, most senior leaders live in a different universe than the people they lead. As a result, leadership ends up trying to transform a different culture than the one their employees experience.

Leaders need to find ways to get input that won’t naturally get to them. Just as it makes little sense to assume a customer on the other side of the world will proactively provide direct feedback on their experience, leaders need to use their cultural intelligence to hear what employees really think. That requires immersing yourself where employees are and developing the trust to hear their perspectives, in other words, CQ!

Culture transformation requires culturally intelligent leadership

Culture is about the only thing today that makes an organization distinctive. AI can draft a compelling set of values in seconds. It can benchmark you against competitors and generate a 12-month culture-transformation plan within minutes. But none of that creates a compelling culture.

Apply cultural intelligence to your organizational culture with questions like this:

• Ask team members how they would describe your culture to a new job candidate. What’s it like to work here? Compare responses across functions and levels.

• Where do we confuse values with behavior? Use a tool like PRISM to create language and awareness around different approaches to communication, decision-making, risk, power, and speed.

• Use culture survey data alongside direct conversations with people who experience the organization differently from senior leadership. Leverage the survey data to create permission to share transparent feedback from employees. (e.g., “We scored low on X. Why do you think that is?”).

Organizations are asking employees to trust leadership, even while telling them to do more with less. Today’s workplace needs a culture that provides consistency with agility. Culture transformation requires the same level of attention as sales and rising costs because it’s directly tied to those realities. Cultural intelligence is a proven way for leaders and companies to develop a competitive advantage that cannot simply be copied or AI-generated. That makes the work of developing a healthy, adaptive culture more important than ever. And it’s a priority that has my attention as I lead the next wave of CQ leadership.