Part 1: The Culture Debt No One Talks About
Key Takeaways
Culture debt is real. It accumulates when culture doesn’t evolve with growth.
Common causes include M&A missteps, leadership transitions, and poor internal communication.
If unaddressed, culture debt leads to disengagement, turnover, and loss of trust with clients and employees.
Growth is exhilarating. Whether it’s an acquisition, a surge in new clients, or a strategic expansion, the pace can be thrilling—and consuming. However, in that momentum, something critical is often left behind: culture.
In fast-growing firms, particularly those rapidly scaling through M&A, there’s a hidden cost few leaders account for. It’s called culture debt. It accrues silently, only to slow you down or cause failure later.
What is culture debt?
Culture debt occurs when the internal culture lags behind the operational or structural growth of the business. Leaders make decisions that outpace communication, integration, or employee experience design. The result? Misalignment, disengagement, confusion and eventually, turnover of team members and clients.
The term is gaining traction in the HR and organizational psychology world. Thought leaders like Brian Kropp, Chief of Research at Gartner, describe it as “the accumulation of decisions that compromise the long-term health of your company culture for short-term business gains” (Gartner, 2021).
In accounting and advisory firms, where people are the product, culture debt can quietly undermine everything from talent retention to client trust.
Common causes of culture debt
Growth without alignment
When firms grow through acquisitions or launch new service lines, it’s easy to overlook the culture clash that comes with it. Integration plans often prioritize systems and clients, not people. According to a PwC survey, mergers with successful cultural integration are 2X more likely to achieve deal objectives (PwC M&A Integration Survey, 2021).
Leadership turnover or bottlenecks
A change in senior leadership or mid-level burnout can stall culture continuity. If the firm lacks defined values, communication rhythms, or cultural rituals, the departure of a single influential leader can leave teams unmoored.
Outdated communication infrastructure
Internal comms often don’t keep up with new team configurations or digital transformation. If people don’t know what’s changing, why it matters, or how they fit in, they disengage. A recent Gallup study showed that only 23% of U.S. employees strongly agree that they get the information they need to do their work effectively (Gallup, 2023).
Misaligned recognition and reward systems
If firms say they value collaboration but only reward individual billables, people stop trusting the message. This erosion of credibility is a primary driver of culture debt.
Stay tuned for Part 2 – How to pay down your culture debt and rebuild alignment.
what’s inside counts