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Listen to this week’s podcast episode, Ep.244: The Top 10 Indicators of a Broken Workplace Culture & How to Avoid What Creates Them, with Natalie Holder, click here to listen!

What is it about a workplace that makes you feel like you truly belong?

For most people, the answer comes down to trust and stability. Human beings crave predictability, we want to know when the next paycheck is coming, what we’re expected to do tomorrow and what to expect from our environment so we know how to engage with it.

Yet in so many organisations, walking through the doors every morning feels like stepping into a completely different dynamic. Recording this week’s episode with Natalie Holder, an employment lawyer, workplace investigator, executive coach and author of Exclusion; this question of what a trusting, stable culture looks like and how to create it (or how not to) was a definite theme of our conversation.

Natalie’s career has taken a circuitous path; raised in a family of healthcare providers, she stepped into employment law, recognizing that a person's job is a fundamental social determinant of health. Your employment dictates your access to healthcare, your financial security and your daily psychological safety. Throughout her years investigating corporate misconduct and conducting mandatory trainings following major federal lawsuits (including high-profile cases at media giants like Fox News) Natalie has seen the exact mechanics of corporate dysfunction.

Our discussion this week explores why bad management isn't technically illegal (some say it should be…. no comment…), how informal cliques quietly destroy trust and what it actually takes to repair a culture after a major crisis.

Early in her career working for a municipal agency in New York City, Natalie routinely met with workers who felt deeply mistreated by their employers. They came forward with stories of unfair treatment, assuming they had a clear legal claim, but time and again, Natalie had to deliver a frustrating reality. Under employment law (at least in the US), to file a legal claim for discrimination or harassment, an employee must demonstrate that they were treated differently because of a protected status like age, gender, race, religion, or sexual orientation.

If a manager treats a worker poorly simply because that manager is incompetent, abrasive, corrupt or hostile to everyone, it isn't unlawful… it’s just bad management. You can't litigate poor leadership in a courtroom, but its organisational toll is devastating (we can definitely litigate it in a podcast, though, so… is that good news? Unclear).

Natalie shared an anecdotal example of a colleague who stopped doing business with a vendor she had used for years. When asked why, she explained that every time she called, she dealt with a new representative who didn't understand her account. The constant employee turnover forced her to seek out a more stable competitor. There’s a direct line between employee attrition and customer loss, when leaders fail to retain good people, customers notice the instability and take their business elsewhere.

Much of this poor behavior stems from the classic corporate mistake of promoting subject matter experts into management without leadership training; the accidental manager problem that you’ve heard me speak about before. An exceptional engineer or brilliant attorney is assumed to be capable of managing people on the strength of their exceptional solo contributions, when in reality the skillset is completely different and what the ‘bosses’ are really expecting them to do is create clones of their excellent-performing-selves.

Compounding this, many managers carry unaddressed personal baggage from their own former bosses. Natalie recalled an early job where a senior leader publicly humiliated her boss in front of colleagues over his attire. Because that supervisor was routinely demeaned by his superior, he passed that exact hostility straight down to his team. Unhandled insecurity and poor management habits replicate across an organisation unless someone makes a conscious choice to break the cycle.

We often hear the phrase "relationships matter" tossed around as an absolute good in corporate life. In industries like hospitality, nothing gets done without interpersonal networks but, as Natalie observed, unchecked relationships can quietly poison an organisation by creating clear insider and outsider dynamics.

When workplace relationships mimic high school cafeteria cliques, they dictate who gets access to informal mentoring, who receives grace after a mistake and who gets assigned the high-visibility projects. If you're on the inside, the culture feels collaborative and supportive while if you're an outsider, that same structure feels exclusionary and hostile.

In her research for Exclusion, Natalie identified the lack of informal mentoring as one of the top indicators of a broken workplace culture. When senior leaders only mentor people who look, think or act like them, they create a secondary tier of employees who are denied the unwritten rules of corporate engagement.

During her time conducting workplace investigations into severe executive misconduct, Natalie repeatedly saw how internal networks were used to protect favored individuals or undermine complainants.

On the surface, much of this may feel like the ‘normal’ course of human social interactions, but as leaders we have a responsibility to interrogate the relationships within our teams and do what we can to balance the scales when we can. You can't force employees to be friends, but you must ensure that mentorship, feedback and career opportunities are distributed equitably rather than hoarded within informal circles.

Another critical indicator of a failing culture is an environment where employees cannot recover from a mistake. In healthy organisations, a mistake is treated as a learning moment. In a broken culture, a single error permanently marks an employee as incompetent, cutting them off from future advancement.

This problem is often exacerbated by a lack of honest feedback. Many managers confuse kindness with a complete lack of honesty, out of fear of awkwardness or raising legal concerns across demographic lines, leaders frequently withhold the sharp, constructive critiques that workers sometimes need to course-correct.

Natalie shared a personal memory from early in her legal career when a senior partner bluntly called her out for having zero respect for deadlines. The feedback was coarse and uncomfortable to hear, but it fundamentally altered how she approached her work. Twenty years later, she remains hyper-conscious of punctuality.

Soft, vague praise might feel comforting in the moment, but honest, actionable feedback is what allows professionals to grow. At the same time, delivering honest feedback requires empathy and it doesn’t mean kindness has no place; if an employee is suddenly slipping on performance, an empathetic leader doesn't immediately default to aggression. They lead with questions first, asking what is happening in a worker's life or what might be behind the performance drop, before issuing a reprimand separates constructive management from workplace bullying. And it just might surface a personal issue or workplace challenge that you weren’t aware of, providing an opportunity for grace and support instead of conflict.

When an organisation experiences a severe crisis, whether it's a public harassment scandal or a lost contract, failed investment round or an operational safety failure, the default corporate response is to issue a brief apology, run a basic compliance session or review and then attempt to move on.

But rushing past organisational pain only plants the seeds for the next crisis; Natalie shared a striking example from her time at a major research laboratory where an arc flash accident involving thousands of volts of electricity severely injured a contractor on New Year's Eve. The immediate operational response was necessary, but the broader culture required deep repair because the incident created immense psychological distress for the workers who witnessed it and raised immediate doubts about workplace safety.

Rather than treating the issue as closed once the formal investigation finished, the leadership spent over a year actively engaging in culture repair. They brought operations and human resources teams together to maintain continuous dialogues around safety, creating an environment where workers felt genuinely protected. Years later, staff climate surveys overwhelmingly showed that employees felt safe; a direct result of leadership choosing to sit with the discomfort rather than sweeping it under the rug.

Similarly, in workplace discrimination or harassment cases, a superficial apology from an executive does not restore trust. Genuine repair requires leadership to sit with the affected team, acknowledge the structural failure and its impact, and systematically address the unwritten rules that allowed the behavior to occur in the first place. As we’ve seen time and again in our conversations around leadership and culture, the follow up and the follow through are crucial; it’s no good hearing people out if that’s all you ever do.

When I asked Natalie to name her leadership hero, she pointed to Harriet Tubman, as ever the “and why?” part of the question is the more enlightening bit for me, and Natalie’s answer is no exception, pointing to the extraordinary courage, physical tenacity and selflessness displayed by her hero. Tubman didn't just escape captivity herself, she repeatedly risked her life to return and guide others to safety; that commitment to others is the essence of real leadership.

True management isn't about protecting your ego, defending short-term profits or hiding behind corporate policy. What it really means is taking responsibility for the health, stability, success and growth of the human beings you lead, while still giving them the space and the grace to be human. When you build a culture grounded in clear accountability, equitable mentorship and genuine empathy, retention takes care of itself.

As you evaluate your own operations this week, take a close look at where your workplace needs clearer boundaries or deeper repair.

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If you’d like to listen/watch the full chat with Natalie, here are the links (or you can find it on your preferred podcasting platform): https://smartlink.ausha.co/leading-with-integrity/ep-244-the-top-10-indicators-of-a-broken-workplace-culture-how-to-avoid-what-creates-them-with-natalie-holder

And if you prefer video then you’ll find it on YouTube too: https://youtu.be/Cj1Phj1bbRI

Next week we’ll be hearing the remarkable story of Eric Robinson, how he went from 12-years as a Baptist Pastor to a 24-year veteran of the FBI, including time as a SWAT operator; his journey from Preacher to Breacher has some surprising and meaningful leadership lessons, among other things!

Hope you’ll be back again then, and in the meantime: THANK YOU for reading, listening, supporting Leading with Integrity. There’s no show or newsletter, no future of leadership without each and every one of you.

Be a Leader Not a Boss,

- David

In case you don’t know me that well, I’m David Hatch and I’m here to help you lead more like a Jedi and less like a Sith.

If you’re a new manager or first-time leader in a tech, expertise or specialist driven workplace and you’re feeling lonely, stuck, overwhelmed, or simply ready for your next chapter in leadership, the Integrity Leaders Community offers conversations, courses, resources and support to help you grow one step at a time. If you have a healthy love of sci-fi and want to learn more about leadership, then this is the community for you! Solopreneurs also welcome. 😉