Excuse #3: We Can't Afford It

Leaders under financial pressure often say: “We can’t afford to invest in culture right now.”

It feels like pragmatism; budgets are tight, margins are thin, and every dollar has to count, but framing culture as a “cost” rather than an “investment” is one of the most expensive mistakes organizations make.

The Real Challenge

This excuse stems from the belief that culture is intangible and therefore dispensable. Yet culture underpins retention, performance, and adaptability, all of which have direct financial impact. 

The irony is that the very pressures leaders cite as reasons to avoid culture work are the ones culture is best positioned to address.

The Consequence

Avoiding culture work because it feels costly doesn’t reduce expenses, it compounds them. 

McKinsey’s 2025 report shows that just one hour of unproductive work per week costs midsize employers up to $5,900 annually per employee (McKinsey, Investing in the Manufacturing Workforce to Accelerate Productivity, 2025). Multiply that across a workforce, and the “savings” from avoiding culture investment quickly evaporate.

Employee disengagement is another silent drain. McKinsey’s HR Monitor 2025 found nearly 20% of employees across Europe report dissatisfaction with their employer, often tied to leadership and culture gaps (McKinsey, 2025). Disengagement drives absenteeism, presenteeism, turnover, and lost innovation, hidden costs that outweigh upfront leadership, development and culture spending.

Even in growth environments, underestimating culture hurts. Research from McKinsey shows companies with top-quartile cultures deliver three times higher total shareholder return compared to the bottom quartile (McKinsey, When Building New Businesses, Culture Matters, 2025). 

Culture is not a side project; it’s a financial driver.

The Reframe

Instead of saying, “We can’t afford it,” leaders can reframe to: “We can’t afford the cost of dysfunction, culture is an investment.”

Culture strengthens adaptability and retention, helping organizations weather uncertainty while keeping institutional knowledge intact. It reduces replacement costs, lowers burnout, and boosts performance outcomes.

A Practical Step

If budgets are tight, start small but intentional. Pilot one cultural initiative like manager coaching, mentoring programs, or recognition rituals and measure its effect on retention, engagement, or productivity. Tracking results turns culture from a “soft” cost into a visible ROI driver.

Culture isn’t something you spend on when it’s convenient. It’s a lever for organizational health that protects the bottom line. The question isn’t whether you can afford culture, it’s whether you can afford the consequences of ignoring it.