Quick – what are your company’s top 3 values? Now, if you actually remembered them, when was the last time you experienced those values come to life within your work or team?

That gap between stated values and lived experience points to a deeper problem- an engagement crisis. Right now, in the US, only 31% of employees feel engaged at their workplace – matching a decade-low last seen in 2014. Think about that for a moment. In a room of 100 people, 69 of them feel disconnected from their work, their teams, their purpose. Even more troubling? Seventeen percent are actively disengaged. They’ve gone beyond disconnection to disillusionment.

While this crisis affects all generations, it’s hitting younger workers particularly hard, with employees under 35 showing some of the steepest declines in engagement.

These statistics suggest our current approaches to organizational culture, including espoused vs enacted values, have not evolved with the needs of our people. We keep talking about ‘cultural fit’ as the independent variable – that magical quality that supposedly creates dream teams and healthy workplaces. The logic seems sound: find people who ‘fit,’ and engagement will follow. Yet somehow, we’re more disconnected than ever.

Fitting the Culture

While intended to create cohesive teams and strong workplace cultures, “cultural fit” has become a sophisticated mechanism that might actually be undermining engagement. When we focus on cultural fit, we’re often really looking for similarity rather than capability or potential. How well does a person’s values, skills, and work style align with a company’s culture, goals, and values.

Social Identity Theory reveals how humans naturally categorize themselves and others into groups, creating “in-groups” and “out-groups.” In the workplace, cultural fit assessments often become unconscious proxies for group belonging. The result? People who might bring unique perspectives and new energy feel pressure to conform rather than contribute. Inadvertently creating environments where true engagement becomes impossible because authenticity is sacrificed for acceptance.

When organizations prioritize cultural alignment over expertise and cognitive diversity, they miss opportunities for fresh viewpoints that could boost engagement. Companies with diverse perspectives and working styles are 45% more likely to report market share growth and 70% more likely to capture new markets. The key lies in evolving from “culture fit” to “culture add” – but this requires something more fundamental: respect.

Respect Above All

What if we’ve been focusing on the wrong variable? When we examine high-performing organizations, we find a different catalyst at work: respect. Unlike cultural fit, which organizations attempt to engineer through selection, respect emerges through consistent actions and veritable human connection.

When people feel respected at work, something fundamental shifts. They bring their whole selves to work, enriching the organization with distinct ways of thinking and novel approaches. Recent workplace studies show teams reporting high respect are 3x more likely to actively demonstrate company values in their work. In other words, respect isn’t just a nice-to-have – it’s the foundation that determines whether employees can truly engage with their work and their teams.

While only 37% of employees feel genuinely respected at work, the issue goes deeper than numbers. This manifests in daily choices: how meetings are run, whose voices are heard, which behaviors get rewarded. Consider a company that celebrates work-life balance while implicitly rewarding after-hours email responses, or one that champions diversity while promoting carbon copies of current leadership. These daily contradictions reveal the true state of respect in an organization.

In teams where respect burgeons, so does everything else – collaboration, innovation, talent retention. But in spaces where respect dwindles, even the most carefully crafted value statements wither.

Leaders are catching on. They’re moving away from treating values as corporate commandments and instead seeing them as living agreements that need constant care. Through regular dialogue, quick responses to feedback, and honest assessment of practices, they’re building workplaces where respect and values align.

Building Adaptive Organizations

The most effective companies have discovered that adaptability, not conformity, drives performance. Google’s Project Aristotle revealed psychological safety – itself a product of respect – as the critical input that enables teams to innovate and excel. When organizations shift their focus from controlling cultural fit to nurturing psychological safety, they create a highly motivated and dedicated workforce where engagement naturally flows.

What does this look like in practice? Smart organizations are focusing on three key areas that build their adaptive capability:

1. They’re closing the feedback loop. When employees see their input shape real changes, trust and respect grows. When they don’t, even the best programs fall flat.
2. They’re rethinking dialogue. Weekly conversations between managers and teams aren’t just check-ins – they’re the building blocks of trust. And it’s working: employees with managers who make time for real connection are 4x more likely to be engaged at work.
3. They’re embracing differences. Take work hours: some people thrive on quick responses at all hours (“blenders”), while others need clear boundaries (“splitters”). Instead of forcing one style, leading companies create space for both. They know that respect looks different to different people.

The Costco Way

Costco understood that genuine human connection isn’t an outcome you can mandate – it emerges from creating the right conditions. In 2024, they tackled a challenge that every major company faces: how do you maintain authentic engagement in a workforce of hundreds of thousands across different countries? Their answer wasn’t another employee survey or town hall meeting. Instead, they turned their entire company into a conversation.

“Costco Connects: Employees Talk. Leaders Listen” started with a bold premise – that meaningful dialogue can scale. The company gathered 144,000 employees in small groups of 10-15 people, creating intimate spaces where real talk happens. No scripts, no rigid agendas, just transparent discussion about what matters. What set this initiative apart wasn’t just its scale. Costco handed the reins to local leaders, giving them the tools and trust to guide these conversations in ways that made sense for their teams. Most importantly, they treated each conversation as a commitment – every session ended with clear actions, turning employee input into visible change.

These weren’t just listening sessions. They were proof that even the largest organizations can deepen employee engagement when they focus on the right inputs. Cultural evolution doesn’t have to sacrifice human connection for scale – it actually depends on it.

Cultural Ambidexterity Drives Progress

Adaptive cultures reveal their true power when organizations operate globally. What works in Silicon Valley – direct feedback, flat hierarchies, individual recognition – might miss the mark in places that value harmony and group achievement. This isn’t just about cultural sensitivity; it’s about organizational adaptability.

Companies that rigidly maintain singular cultural practices across global operations see turnover rates more than double compared to their adaptable peers. This often stems from inadvertently creating stark in-groups and out-groups, where those who don’t match the dominant culture feel neither respected nor safe enough to voice their thoughts and opinions. In contrast, organizations that embrace “cultural ambidexterity” – the ability to adapt and blend local and global cultural elements – report nearly twice the innovation outcomes and retention rates 31% above industry averages.

The business case becomes even clearer when we look at cognitive diversity. Companies in the top quartile for multiculturalism are 33% more likely to have industry-leading profitability. Why? Because adaptive cultures break down the in-group/out-group dynamics that stifle valuable contribution, creating the psychological safety needed for productive friction.

This is where engagement transforms into innovation. When people feel respected enough to challenge ideas (not each other), breakthrough thinking happens. The most successful organizations don’t just tolerate different perspectives – they actively create environments where diverse viewpoints can safely collide and combine. They understand that true adaptability comes from turning cognitive diversity into their competitive advantage.

Making It Real

Building an adaptive culture requires measuring different variables. Instead of tracking cultural fit through traditional engagement surveys, forward-thinking organizations monitor the actual drivers of organizational health:

• How frequently and freely do people contribute ideas across all levels of the organization?
• How quickly and effectively does the organization integrate new perspectives and approaches?
• Where are the bridges and barriers between different groups in the organization?
• How diverse is the organization’s problem-solving toolkit and thinking styles?

For employees looking to influence the gap between your organization’s stated and lived values, consider:

• How do decisions about promotions, projects, and recognition align with stated values?
• What happens when someone challenges “how things are done here”?
• Where do you have autonomy to make decisions that align with values?
• How often are you empowered to solve problems in ways that best serve your team?

Understanding these disconnects isn’t about finding fault – it’s about recognizing where you have agency to shape your organization’s evolution. Just as Costco found that empowering local leaders with decision-making authority created more responsive and agile workplaces, individual contributors at any level can influence their organization’s cultural trajectory. Success comes from identifying where you have autonomy and using it to demonstrate how adaptive cultures perform better.

Ever Evolving

Adaptive culture isn’t just about changing systems – it’s about evolving mindsets. It means moving beyond “cultural fit” to ask more intentional questions. It means making space for the courage to acknowledge where lived experience falls short of stated values, courage to have difficult conversations about barriers, and courage to make meaningful changes in response to assorted perspectives.

The organizations that get this right aren’t just creating better places to work – they’re building resilient, sustainable cultures capable of turning today’s challenges into tomorrow’s opportunities. They understand that in a world of constant change, the most engaged teams aren’t those that fit a mold, but those that feel respected enough to help shape what comes next. After all, in a world that never stops changing, culture that can’t evolve is culture that can’t survive.

References

1. Harter, J. (2025). U.S. Employee Engagement Sinks to 10-Year Low. Gallup.
2. Pendell, R. (2025). Respect at Work Returns to a Record Low. Gallup.
3. Soto, B. (2024). Costco’s Massive Employee Listening Initiative Offers Lessons for HR Executives. CHO Group.
4. Deloitte. (2021). Global Human Capital Trends.
5. Bruyaka, O., & Prange, C. (2020). International cultural ambidexterity: Balancing tensions of foreign market entry into distant and proximate cultures. Management International Review.
6. McKinsey & Company. (2018). Delivering Through Diversity.
7. Meyer, P. (2018). Costco’s Organizational Culture Characteristics. Business Strategy Insider.
8. Morgan, B. (2018). Simplifying Culture So Managers Can Actually Execute On It. Forbes.