The Culture You Tolerate Is the Culture You Build

By Carole Lawson, Co-Founder & Chief Data Officer, MarketStorm

I had to let someone go recently. No matter how many years you’ve led organizations, those conversations never become easy.

Sometimes it feels like it would have been simpler to look the other way. There were clients to serve, deadlines to meet, and countless other decisions demanding my attention. Like most leaders, I’ve learned that confronting behavior is almost always harder than ignoring it.

When you first notice something isn’t right, it’s easy to rationalize it away. You tell yourself it’s an isolated incident. Maybe they’re having a difficult week. Maybe you’re overreacting. Maybe you’ll deal with it after this project is finished. You roll your eyes, shake your head, and think, “Are you kidding me?” Then you move on to the next thing. It is only after it is over that the absurdity of the behavior comes into full view.

We are each responsible for our own microenvironment

Leadership is busy, and defending culture rarely feels as urgent or as attractive as the work sitting in your inbox. Over the years I’ve come to believe that this is exactly how organizations begin to lose themselves. It’s not all at once, it’s little by little. One tolerated behavior at a time.

I’ve spent much of the last twenty years studying how technology changes human behavior. That may sound like an odd place to begin an essay about leadership, but I’ve discovered something surprising. The same principles that explain why new technologies reshape markets also explain why some organizations flourish while others slowly lose their way.

Behavior follows the environment. Change the environment, and behavior eventually changes with it. Organizations are no different.

Every leader creates a microenvironment within the broader organization. Whether intentionally or unintentionally, we teach people what matters through our daily actions. We communicate what excellence looks like, what behaviors are celebrated, what standards are expected, and perhaps most importantly, what behaviors we are willing to overlook.

Long before I encountered the research, I had seen this principle play out in real life.

The Rosenthal Effect

In the 1960s, psychologist Robert Rosenthal conducted a fascinating experiment. Teachers were told that certain students in their classrooms were likely to experience extraordinary intellectual growth during the coming year. The remarkable part was that those students had been chosen at random.

Yet many of them did, in fact, outperform their classmates.

The teachers weren’t consciously giving them better grades or easier assignments. Instead, their expectations subtly changed the way they interacted with those students. They became a little more patient. They offered a little more encouragement. They provided more opportunities to grow. Over time, thousands of seemingly insignificant interactions accumulated until the students began performing at a higher level. The expectation became the reality.

Most people think of the Rosenthal Effect as an educational concept. I think it’s one of the most profound leadership lessons ever discovered. It changed the way I think about my own role as a leader.

For decades, leadership has often been defined by command and control. Set goals. Measure performance. Correct mistakes. Hold people accountable. Those things certainly matter, but I’ve come to believe they aren’t the heart of leadership.

The real responsibility of leadership is creating an environment where people can become more than they believed they were capable of becoming. That is a very different way of thinking.

Protect and project what you value

At MarketStorm, our first company value isn’t innovation. It isn’t performance, it isn’t profitability. It’s kindness. Not being polite, not avoiding difficult conversations because you might hurt someone’s feelings, genuine kindness.

To be clear, I am not talking about kindness because it makes people feel good, but because we’ve come to believe it is a competitive advantage. When most people hear the word kindness, they imagine avoiding conflict or lowering standards. That isn’t what I mean. Real kindness assumes the best in people while expecting the best from them.

True kindness celebrates growth. It offers encouragement without becoming dishonest. It gives people the confidence to take risks while holding them accountable for learning from them. It also removes people from bad situations or more importantly in a leadership role, removes the bad situation from your team. There is nothing more unkind than letting people suffer through a bad situation because dealing with it makes you feel uncomfortable.

We all have our own extraordinary

Every day we celebrate accomplishments. We openly cheer one another on. We intentionally recognize progress, sometimes in very small ways. We talk constantly about playing to one another’s strengths while protecting one another’s weaknesses. Rather than trying to make everyone good at everything, we help people become exceptional where they naturally excel while surrounding them with teammates whose strengths complement their own.

One phrase we use often is, “Find your own voice.”

What we mean is simple; we don’t expect anyone to become a copy of someone else. We want each individual to discover the part of their work that genuinely resonates with who they are.

Some people discover they love solving technical problems. Others become remarkable communicators. Some find joy in helping clients navigate difficult decisions. Others discover talents they didn’t know they possessed because someone finally believed they were capable of more. Someone finally saw what is uniquely extraordinary about them.

I’ve never believed that people come to work wanting to do a poor job; most people want to contribute. People want to grow, they want to be seen, they want to matter. Leadership isn’t about extracting more effort from people. It’s about removing the barriers that keep them from becoming who they’re capable of becoming.

Inputs become outputs

One of the unexpected outcomes of this philosophy has been the work ethic it produces. We often hear business leaders grousing about younger employees simply don’t want to work anymore. Our experience has been almost the exact opposite.

In fact, we sometimes have to remind people to go home, to take vacations, and to spend time with their families. They aren’t driven by fear or unrealistic expectations. They work hard because they genuinely enjoy contributing to something meaningful and because they know their teammates are counting on them.

I don’t believe that’s a generational phenomenon. I think it’s a human one. When people feel trusted, respected, challenged, and supported, most of them naturally want to contribute. The question isn’t whether people want to do meaningful work. The question is whether we’ve created an environment that allows them to.

Protecting what you build

But building a healthy culture is only half the responsibility. Protecting it is where leadership becomes difficult.

Every leader eventually encounters behavior that doesn’t align with the environment they’re trying to create. Rarely is it one dramatic event. More often, it’s a pattern. A dismissive comment. A lack of ownership. An unwillingness to support a teammate. A quiet erosion of trust.

Those moments almost never arrive when it’s convenient. There is always another deadline, another client call, another meeting, another reason to postpone the difficult conversation.

Every leader knows the temptation to convince themselves that it will get better on its own. Sometimes it does, more often than not it doesn’t. It is easy to hope that the team will take care of it. They won’t because they can’t. It is up to you.

What I’ve learned is that every time a leader ignores behavior that contradicts the values they publicly celebrate, they teach the organization something. The strongest organizational lessons are not through speeches; they come through silence.

People don’t ultimately believe what leaders say; they believe in what leaders do. Not what you do once but what you consistently do. Culture is not built by what leaders celebrate once a quarter. It is built by what they reinforce every day and what they refuse to tolerate. Eventually, if the gap between words and actions becomes too large, people stop believing the values altogether. They begin to assume those values exist for recruiting brochures or company websites rather than for real life.

In that moment, trust quietly disappears. Sometimes protecting a culture means making one of the hardest decisions a leader will ever make. No one enjoys telling someone they are no longer part of the team. I certainly don’t.

But I have come to believe that protecting a healthy culture is often one of the greatest acts of kindness you can show the people who remain. Every person who consistently lives your values deserves to know those values are real. They are not platitudes, they are not optional.

It is up to you

Certainly, Leadership is about setting goals and driving toward outcomes. The work has to get done, we all have to deliver. As leaders, we have to understand it is also about having the courage to protect the environment that allows everyone to grow.

The Rosenthal Effect teaches us that people often rise or fall to the expectations placed upon them. Leadership is choosing those expectations carefully. Culture is reinforcing them every day. Character is having the courage to protect them when it would be easier not to.

It is not just companywide. Every leader has an individual responsibility to drive and protect what we say we care about. In the end, every leader builds a microculture within their own team. The real question for each of us is whether we build it intentionally or is it built by what we choose to tolerate.

By Carole Lawson
Co-Founder & Chief Data Officer, MarketStorm