Get More From The Report

  • THE PROBLEM Corporate culture is waning.

  • WHY IT MATTERS Culture accounts for 30 percent of market value, according to executives.

  • THE SOLUTION Reengage staff around the firm's core characteristics.

See the latest issue of Briefings at newsstands or read the full magazine in digital format here.

Last year, Nicole Martins Ferreira landed her dream job as the product marketing manager at Huntr.co, an AI-powered résumé-creation company. Her boss welcomed her onto the company’s core team, setting a “super collaborative” tone, she says; she calls him the best boss she’s had in her 12-year career. They have two regularly scheduled meetings: a monthly one-on-one, and a daily 15-minute progress meeting with five colleagues.

All of which couldn’t be more normal, except that her boss and teammates are virtual strangers—she’s never met them in person. She’ll perhaps meet her boss soon at an upcoming off-site in Vancouver, Canada, where she wonders what it will be like to share a meal with him, and what he’s like when he’s not talking about work. “It’ll be really helpful to have more face time—to just have, like, social time,” says Martin.

For decades, most casual workplace banter was not about work. Colleagues talked about The Sopranos or planned the next basketball-league practice or swapped tales of woe about parenting in the age of flip phones. But there’s none of this at Ferreira’s workplace—and her experience is the new norm for millions of workers: 58 percent of the US workforce, or 92 million workers, report that they can work remotely sometimes, according to one study. Roughly one in six companies is entirely remote. Yes, workers like Ferreira are employed, with all the trappings of work—company laptops, deadlines, and performance reviews—but they’ve never met a colleague in person, and they’re not attending the company holiday party. No matter how dedicated they are, their overall engagement with their company and coworkers is, by definition, impersonal and fragmented. 

Yes, workers are employed, with all the trappings of work, but they’ve never met a colleague in person.

To be sure, shifts away from in-office work culture appeared long before the pandemic. Average two-way commutes rose to 56 minutes in 2019, according to census data, with nearly 10 percent commuting at least two hours each day. These numbers have bogged down diversity and inclusion efforts, because lower-income workers often endure even longer average commutes. Companies have mostly looked the other way; they’re still hosting Friday lunches and happy hours. 

Today, nearly everyone agrees that the strength of corporate culture is waning, month by month, and needs what many experts call a reboot. Sure, some companies, like Amazon, have returned workers to the office five days a week, and there’s talk that more big firms will follow. But the vast majority of companies are operating on hybrid or remote arrangements that seem to leave little room for culture. How, leaders ask, does an organization maintain a thriving culture among people who have never met—and whose only relationship consists of talking about work (and minimally at that)? Nicole’s team is “quiet on Slack,” meaning that some days, her only work discussions take place in that 15-minute midday meeting.

Four years after the pandemic began, executives are struggling to find answers to a problem that deeply affects them. They say culture accounts for 30 percent of a company’s market value, according to the World’s Most Admired Companies list—produced each year by Korn Ferry in partnership with Fortune—and 60 percent of leaders say they’ve given up on predominantly in-office culture. Workers increasingly see themselves as fungible, and jobs as nomadic. “Culture is being challenged,” says Mark Arian, CEO of Korn Ferry Consulting. “I’ve talked to a bunch of CEOs. I don’t think they’re prepared for this.”

*****

A century ago, chief executives believed that companies were essentially villages. The founders of the multinational corporations that came next applied that belief quite literally: They built company towns, like Lowell, Massachusetts (textiles), and Hershey, Pennsylvania (chocolate), and filled the social calendars of factory workers and managers alike with sports teams and social-club events. The logic was simple: “If the village isn’t talking to each other and building up relationships of trust, it’s not going to function very efficiently,” says Robin Dunbar, emeritus professor of evolutionary psychology at Oxford University, who studies the history of corporate culture. 

Company towns provided employees with ample shared experiences, interests, and values, which is relevant so many years later because that’s still a defining feature of corporate culture, says Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University. Ideally, a set of common assumptions and beliefs becomes ingrained. This is invaluable across an organization: An acculturated employee knows innately how to behave in a variety of situations, which in turn lessens the need for micromanaging and specific trainings. For example, imagine that a company’s mantra is to always make the customer smile. John the retail staffer might not have been trained specifically to handle angry customers, but if he knows the firm’s mission, he’ll be capable of coming up with a solution on his own—an accomplishment that will give him a sense of both autonomy and pride. 

When employees share the same assumptions, companies gain an advantage, says Rousseau. Managers have less work because they don’t need to train for every possible outcome; instead, they can “operate much more relationally and supportively,” she says. But maintaining company-wide culture sharing, especially across departments and silos, requires time and resources, all of which can disappear during a period of turnover or disruption. If John the retail staffer is working remotely, he might need to call his boss for help with an angry customer—creating a disjointed sales interaction. Now multiply that by millions of employees. “As soon as culture breaks down, behavior needs to be directed in much more explicit and effortful ways,” says Rousseau. 

Data and machines are further weakening culture, with employees not only remote but also being managed on platforms. More work is falling on fewer people, mostly due to staff and budget limitations, says Rousseau. Stressed-out workers have time only for immediate tasks, so they lack opportunities for cultural sharing; when better opportunities arise, they leave the firm. “It’s a killer of culture building,” says Rousseau. “Companies have brought this on themselves.” 

Allow these scenarios to continue unabated for a while, and the very relationships that the firm is trying to facilitate—the ones that spur profit—break down. “Every manager with a large team feels this every day,” says Shivaram Rajgopal, professor of accounting and auditing at Columbia Business School. “How a company does something can either be a competitive advantage or a noose around its neck.” 

In that light, the knitting clubs and dance nights of 19th-century corporate titans seem ahead of their time. Titans created the social capital that Harvard political scientist Robert Putnam wrote about in his famed 2000 book, Bowling Alone: The Collapse and Revival of American Community, which traces the loss of these connections throughout society. Companies are now experiencing the same fraying of social bonds—with enormous potential financial consequences. Bowling clubs may not be the solution to this disintegration of corporate culture, but the traditional ways of building and enlivening connections no longer exist. These days, when Rousseau spots a corporate rowing club on the river near her Pittsburgh home, she sees it as a signal of the strength of that company’s cultural ties. She doesn’t see many corporate rowing clubs.  

*****

The recent surge in remote work is not the first time employees have headed for the hills. In the 1990s, laptops and primitive forms of online video emerged just as commercial rents surged in European capitals. Companies sent their people to work wherever they liked. “I was involved in a lot of meetings over what was then known as ‘homeworking,’” says Dunbar, the Oxford professor. (It went over well everywhere, he says, except Moscow, where staffers strongly preferred the comparative luxury of their offices.) At one UK multinational, executives were thrilled to be able to drive their kids to school and play golf at midday. “Surprisingly to us, it was the youngsters who revolted,” says Dunbar. Work was the center of their social existence—it was where they saw their friends—and without it, they found themselves at sea in new cities, without families or well-established friendship circles. 

“How a company does something can either be a competitive advantage or a noose around its neck.”

This was a different era, when bulky technology and an undependable internet reigned, and after a couple of years, many workers drifted back to the office—a scenario that has not repeated in 2024. Remote-worker numbers have remained relatively stable in 2022, 2023, and 2024, according to the US Bureau of Labor Statistics. But the problem of weak cultures is disproportionately affecting some demographics. Remote workers utterly miss out on contacts (like the emails that fly among members of hybrid teams) with other parts of the organization, according to research on email patterns by Microsoft. Those interactions with other departments historically happened in person. Young people in particular are not getting assimilated into the culture, says Rajgopal, the Columbia professor. “We learn by observation, in a process of osmosis.”

Some companies have put a tiny portion of their savings from rental leases—estimated at $800 billion to $1 trillion globally since the pandemic—towards off-sites aimed at fostering spirit. “The retreats probably would’ve worked if everyone was midcareer and already indoctrinated into a particular way of thinking,” says Jill Grennan, assistant professor of economics at Emory University. “I don’t think they’re working right now.” 

Leaders are not stepping away from culture—if anything, they’ve doubled down on it, with 89 percent saying that even if the economy falters, they’ll continue to focus on it. Four out of five executives on the World’s Most Admired Companies list say that they’re increasing their emphasis on culture; three out of five are boosting investments in it. But many leaders are still puzzled about how best to reboot it.

*****

There is one factor working heavily in companies’ favor: the rise of collaborative work. Over the last 20 years, being assigned to a team has become the norm for most employees, and a driver of widespread colleague engagement. “It’s all everyone does now,” says Grennan. This can be a substantial source of potential cultural engagement, if companies know how to harness it. 

Big picture, firms have two potential choices: One is to return to the past, mimicking previous culture strategies. “That’s not going to work. That ship has sailed,” says Korn Ferry’s Arian. The other option is for firms to reidentify what makes them their innate, nimble selves. The key, he says, is to identify distinctive and unique characteristics, like out-of-the-box innovation, guerrilla attitude, and fiery intensity. How can employees profoundly engage around those characteristics? 

To boost day-to-day cultural flow, a number of Fortune 500 companies use Live Room, an engagement concept developed by Korn Ferry. “People are tired of generic campaigns and platitudes—there’s an appetite for something very concrete that’s focused on solving real business challenges,” says Alina Polonskaia, a global leader of the Diversity, Equity and Inclusion practice at Korn Ferry. A Live Room is a method and tech space, engaged through a series of workshops that spur team collaboration. The idea is to break traditional patterns of thinking while bringing new ideas to hybrid contexts. The concept was born out of diversity- and inclusion-driven efforts to introduce ideas from the margins—and adopted during the pandemic, when everyone embraced this approach.

Leaders realize that weakened cultural ties not only hurt profits, but also add to a worrisome epidemic: loneliness. Indeed, the 2023 Surgeon General’s report on the topic found that loneliness harms productivity and quite literally kills off employees, raising the risk of premature death by 26 percent—the equivalent of smoking 15 cigarettes a day. 

One of the employees sitting at home alone is Aaron Wertheimer, who last year joined Marketing Reel, a video- and content-marketing agency, as a content writer. He was hired partially because of his proximity to a colleague in Los Angeles, 40 minutes away, which makes in-person meetings possible, should they be necessary. They haven’t been. “It just hasn’t worked out,” laughs Wertheimer. He has found himself overseeing culture-building activities, such as a Thanksgiving gathering where the team left gratitude notes for each other on a digital whiteboard. He enjoys the job, though he describes the company’s sparse Slack chatter as “like messages that I imagine police send: arrived at X, no backup needed.”

Photo Credits: Siri Stafford/Getty Images; Siri Stafford/Getty Images; Lee Jingyi/JP Morgan Corporate