How one CEO stopped the “Growth Tax” by defending the culture

As a CEO, are you frustrated by high-performing leaders who hit their numbers but leave a trail of cultural damage behind them?

In my previous article, “Is your executive team driving a healthy culture?”, I discussed how culture isn’t "soft" or "fluffy", it’s a disciplined system. When that system breaks down, your company pays a “Growth Tax” in the form of slow decision-making, high turnover, and unproductive conflict.

I recently worked with a national Canadian seed retailer that was paying a heavy Growth Tax. While the business was established, the culture was being held hostage by a single leader. This is the story of how that CEO stopped paying the tax and started building an A-Player team that was both high performing and lived the culture.

The Challenge: The High-Performing Low-Culture-Fit Leader

When I first met the CEO, he was dealing with a significant bottleneck. One of his most experienced leaders, someone with decades of technical know-how, had a pattern of angry outbursts. When employees made mistakes or were simply learning the ropes, this leader would erupt.

The result? A massive Growth Tax. Employees were hesitant to take initiative, turnover was high, and leadership team meetings were stifled. This leader would get defensive, shutting down any real dialogue or debate.

The CEO tried coaching him for more than a year, but the behavior always reverted. Most concerningly, this leader was actively sabotaging his own successor, refusing to download his knowledge to protect his own ego. The CEO realized that as long as this leader remained, the company would remain dependent on one person, and talented people would keep walking out the door.

The Solution: Implementing a Cultural System

To fix this, we didn't just "talk" about culture; we implemented the four proven practices to drive a healthy environment.

1. Defining Core Values with Specific Behaviors 

After the toxic leader was removed, the team revisited their core values. They paid special attention to the value of Learning. They realized they needed to move away from knowledge hoarding. They defined Learning not as formal training, but as a daily verb: being curious, self-reflection, being coachable, and, critically, educating those around them. This reset the expectations for everyone in the company.

2. Sharing Core Value Stories

To make these values stick, we introduced a ritual. At every monthly and quarterly meeting I facilitated, I asked the leaders to share one great thing an employee had done that month and identify which core value it represented. While it felt awkward at first, it soon sparked a new energy. It made it crystal clear what right behaviour looked like and created a healthy peer pressure to lead by example.

3. Coaching for Cultural Alignment
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Even before the team fully implemented Job Scorecards, the defined values became the "North Star" for coaching. The CEO was finally able to move away from subjective "feelings" and clearly articulate: "This is the behavior we expect here, and your current actions are not aligned with that." Having a shared language for behavior allowed the CEO to address issues with objectivity and firmness.

4. Using Topgrading for Hiring 

The CEO didn't wait for a crisis to find a replacement. When he hired a successor, he used the Topgrading process, including a Virtual Bench approach, where he stayed in touch with A-Players he had admired throughout his career. He also did a Full Career Walkthrough with the candidate, to ensure this person wasn't just technically gifted, but a total cultural fit. This ensured the new leader would model the Learning value from day one.

The Result: From Dread to Joy

The transformation was almost immediate. Once the low culture-fit leader was gone and the A-Player successor was able to fully take the reins, the Growth Tax disappeared.
The mood in the company shifted from dread to levity. Leadership meetings became spaces of honest, courageous, and authentic dialogue. Because the team was finally cohesive, their commitment to plans increased significantly.

The hard results followed:

• Turnover stopped: The company stopped losing talented people due to a toxic environment.
• Middle Management Growth: Solid middle managers were hired and, under the new successor’s mentorship, they grew significantly in their roles.
• CEO Freedom: Just as importantly, the CEO was freed from "firefighting." He no longer had to act as a referee for his own leaders. He could finally delegate with much greater trust, allowing him to spend much more of his time working ON the business rather than being stuck in the daily friction of the operations.

So, where do you begin to get your leaders driving a healthy culture? Start with defining the company’s core values with specific behaviors. We’ll cover that in detail in the next 5 Minute Growth Tip.

Watch / Listen to the Video

If you are a prairie CEO who wants to grow a thriving company, team and life more quickly, more easily and with less stress and headache, please contact me here.