Welcome to HR360 – where we discuss the most recent trends, challenges, and strategies shaping the HR agenda for SMEs. Whether you’re leading an expanding team, growing fast, or bracing for culture cracks beneath the surface, this is your space for honest insight and practical people strategies.

This week, we’re diving into a concept more founders should be paying attention to: culture debt. Like technical debt, it builds up quietly, and left unaddressed, it starts to shape your company in ways you didn’t intend.

The Hidden Cost of “Just Getting Things Done”

In the early stages of a startup, speed is everything. You make fast decisions, hire quickly, bypass formalities, and deliver. But that same speed tends to take a toll on your culture. Misaligned values, inconsistent management styles, ignored feedback, or tolerance for low performance, each one is a small withdrawal from your culture bank.

These withdrawals add up. Over time, this “culture debt” creates confusion, burnout, and internal resistance. The team grows, but trust doesn’t. The company scales, but dysfunction scales with it. And suddenly, things start to break—not because people don’t care, but because no one ever hit pause to fix the foundation.

How Culture Debt Accumulates

Culture debt doesn’t happen overnight—it builds up through inaction and neglect. Below are some usual contributors:

• Hiring for speed, not values alignment
• Skipping difficult conversations with underperformers
• Inconsistent feedback or unclear expectations
• Over-reliance on a handful of “heroes” to get the job done
• Allowing politics or hierarchy to run unchecked
• Founders being the sole ones keeping the culture alive

Most of these decisions are reasonable in the short term. But if they’re never reassessed, they become the default mode of working. That’s when debt becomes dysfunction.

The Interest on Culture Debt: What It Costs You Later

Here’s the real danger: culture debt doesn’t stay invisible forever.

It shows up when high performers start to disengage, or when new hires “don’t stick.” It shows up when middle managers struggle to lead because expectations were never clarified. It shows up when team members avoid accountability, or worse—when no one feels safe enough to speak up.

Unchecked culture debt impacts:

• Retention: Great people don’t stay where they can’t grow or feel heard
• Performance: Lack of clarity leads to confusion, inefficiency, and blame
• Reputation: Word gets out—especially in close-knit founder circles

And the longer you wait to fix it, the harder and more painful the cleanup becomes.

Paying It Off: Culture Clean-Up for Growing Startups

The good news? Culture debt is fixable. But like any debt, it requires awareness, commitment, and a bit of short-term discomfort for long-term gain.

Here’s where founders and people leaders can start-

Take an Honest Inventory:

What values do you claim vs. what actually shows up in day-to-day behavior? What unspoken rules have crept in? Where are people most frustrated? Do a cultural audit—even a simple internal survey or small group conversations can be eye-opening.

Document the “How”:

Start putting into words how your company works—how decisions are made, how feedback is given, how performance is managed. Culture is not just what you say on your website—it’s what happens when no one is watching.

Address the Pain Points:

If there’s an underperformer everyone is tiptoeing around, address it. If teams are working in silos, bring them together. Don’t let politeness get in the way of progress.

Set Leadership Expectations:

As your team grows, founders can’t be the only culture carriers. Equip your managers to lead with consistency. Train them on values-based decision-making, communication, and team development.

Prioritize Consistency Over:

Perfection You don’t need a flashy culture deck or a full-time HRBP to start cleaning up. You just need to be consistent. Walk your talk. Follow through. And most importantly—listen.

Final Thoughts

Culture debt is invisible until it’s not. It creeps in quietly and compounds as you grow. But with intention, clarity, and timely intervention, it’s completely manageable. The sooner you recognize it, the easier it is to pay off—before it starts costing you your best people or your company’s potential.

So here’s your quick check-in as a founder or leader:

Where have you been “defaulting” to speed over intentionality?

What’s one people issue you’ve avoided that needs attention now?