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A Conversation That Got Under My Skin

I was in a consulting session recently with a VP-level leader at a large technology company. Someone in the room asked him a deceptively simple question: What would you change about the culture if you could do anything?

He didn’t hesitate. The culture was deteriorating, he said. And his fix? Stop hiring externally for any role at the director level and above. His logic: outsiders don’t get the culture, and putting them in positions of influence accelerates the erosion.

I’ve been turning this over in my head since. Not because I think he’s wrong to be concerned. He’s not. Cultural deterioration in high-growth technology organizations is real, and it’s painful for the people living inside it. But his proposed solution bothers me. It has that dangerous quality of sounding exactly right while being fundamentally incomplete. And I think if organizations actually followed this advice, they’d make the problem worse.

So here’s my attempt to pull this apart. Not to score points against a leader who was being honest about a real problem, but because the question underneath his answer is one that matters to every organization trying to grow without losing its soul.

We Need to Talk About What Culture Actually Is

Before we can argue about whether external hires damage culture, we have to agree on what culture is. And most people, including senior leaders, are working with a folk definition that doesn’t hold up under scrutiny.

Schein’s (2010) three-level model is still the best starting point. He separates culture into artifacts (what you can see: the office layout, the all-hands cadence, the Slack norms), espoused values (what people say matters), and basic underlying assumptions (what actually drives behavior, often unconsciously). That third level is where culture lives. It’s the stuff nobody writes down because everybody just knows it. Until somebody doesn’t.

When the VP said external hires “don’t understand the culture,” he was pointing at that third level. And he’s right that you can’t transmit underlying assumptions through an onboarding checklist. You absorb them over time by watching what actually gets rewarded, what gets punished, what gets ignored.

But here’s where I part ways with him. He’s treating culture like a fixed thing. Something you have that outsiders might break. Schein himself would push back on this framing. Hatch (1993) extended the model to show culture as a continuous process of production and reproduction. It’s not a possession. It’s a practice. It’s something the organization does every day, and it changes whether you want it to or not.

Collins and Porras (1994) landed on something similar in their research on companies that lasted. The long-lived ones weren’t the companies that froze their culture in place. They were the ones disciplined enough to identify a core ideology, a small set of truly non-negotiable values, and then relentlessly willing to change everything else. A blanket ban on external senior hiring gets this exactly backwards. It treats the whole cultural system as sacred, which means nothing is allowed to evolve. Including the parts that might be broken.

The People Who Built the Problem Can’t Always See the Problem

Here’s the part of this argument that nobody wants to say out loud. If the culture is deteriorating (and this leader was adamant that it is), then who’s been running the place while it deteriorated? Internal leaders. People who grew up in the system.

I’m not blaming them. This is a structural issue, not a moral one. Janis (1972) documented decades ago how groups with shared backgrounds and high cohesion develop blind spots. They stop challenging each other’s assumptions. They converge on comfortable narratives. They develop a shared certainty about how things work that is, in fact, a shared inability to see how things have changed.

Apply that to culture and you get what I’ve started calling the Insider Fallacy: the belief that being inside a system for a long time means you accurately understand it. But tenure gives you familiarity, not clarity. You can spend fifteen years inside a culture that’s slowly going sideways and never notice, because the drift happened at a pace your perception adapted to. It’s the organizational equivalent of not noticing your kids growing until you see a photo from two years ago.

External hires, when they get a real integration plan rather than an orientation week, bring something internal leaders structurally cannot provide: perceptual contrast. They see what’s weird. They notice the things that everyone else has stopped noticing. That first 90-day window, before a new senior leader gets acculturated and starts filtering observations through the local norms, is some of the most valuable diagnostic time an organization has.

And most organizations waste it completely. They treat a new leader’s confusion as a problem to be solved rather than as intelligence to be harvested. Then they wonder why external hires “don’t get it.”

The Legitimate Concern, Yes, Context Matters

I don’t want to be dismissive of what’s real in the VP’s argument. There is genuine research supporting the idea that leader effectiveness is context-dependent. What Khanna (2014) calls “contextual intelligence” is a real factor. A leader who thrived in a command-and-control environment will stumble in a consensus-driven one, and not because they’re bad at their job. Their instincts are calibrated for different physics.

And the failure data is real. Externally hired senior leaders do have higher early-tenure failure rates than internal promotions (Bower, 2007; Charan, 2005). They misread power dynamics. They import playbooks from their last company that don’t work in the new one. They make big moves before they’ve earned enough relational capital to absorb the blowback.

All of this is true. None of it is an argument for exclusion. All of it is an argument for better integration.

Watkins (2003) laid out what structured executive transition support looks like, and it’s not complicated. Pair the new leader with someone who can decode unwritten rules. Create protected time for observation before action. Have explicit conversations about which cultural elements are genuinely non-negotiable and which are the new leader’s to shape. Build feedback loops so the organization captures what the new leader sees while they can still see it.

Most organizations do almost none of this. Then they point at the external hire who struggled and say, “See? Outsiders don’t work.” That’s like handing someone a broken map and then blaming them for getting lost. The problem isn’t the external hire. The problem is the absence of organizational infrastructure to support the transition. Fix the infrastructure and you fix the failure rate. Block external hiring and you fix nothing.

Your Pipeline Isn’t as Deep as You Think

There’s a practical angle here that the cultural argument tends to obscure. An internal-only policy above director level assumes that every capability the organization will need at senior levels can be developed from within. In a slow-moving industry, maybe. In technology? That’s a bet I wouldn’t take.

This is the Peter Principle (Peter & Hull, 1969) at organizational scale. When the only candidates for senior roles are people who’ve grown up in one system, you get leaders who are excellent at navigating internal machinery but may be missing strategic capabilities the organization desperately needs. Somebody who has lived through healthcare regulation, built an AI governance framework from scratch, or led a platform transition while the old business model was still paying the bills isn’t produced by one company’s internal ladder. These aren’t things you develop by spending ten years climbing the internal rungs. They require leaders who’ve been shaped by different contexts.

The healthy approach is a portfolio strategy. Some roles need the institutional knowledge and relational capital of an internal promotion. Other roles need the fresh perspective, specialized expertise, or cross-pollination that only an external hire can provide. The ratio depends on how stable your industry is, how deep your internal bench actually runs, and which specific capabilities you need at a given time. But the principle is simple: don’t make the decision permanent by policy. A policy that eliminates one side entirely is organizational malpractice dressed up as cultural stewardship.

You’re Blaming the Wrong Thing

This is the part that frustrates me the most about the VP’s proposal. It misidentifies the cause. Cultures in high-growth organizations don’t deteriorate because of where senior leaders came from. They deteriorate for systemic reasons that are harder to talk about and harder to fix.

1/ Growth outpaces cultural transmission… When you double the headcount, the ratio of people who carry the culture to people who are still learning it shifts dramatically. If you don’t have mechanisms to transmit culture at scale beyond osmosis and hallway conversations, dilution is inevitable no matter who you’re hiring.

2/ Promotion criteria drift… Under pressure, organizations start promoting people who hit their numbers regardless of how they hit them. Over a few cycles, you end up with a leadership bench selected for execution, not cultural stewardship. These leaders are often entirely homegrown. They still erode the culture.

3/ Middle management gets crushed… The leaders most responsible for day-to-day cultural transmission, senior managers and directors, are also the ones most overloaded with operational demands. When they don’t have time to develop people, model values, or have the conversations that keep culture alive, it atrophies. Not because of external hires. Because of overwork.

4/ Strategic ambiguity creates fragmentation… When the organization’s direction is unclear or keeps shifting, different teams develop different subcultures to cope. Leadership experiences this as “the culture is deteriorating.” But the real problem is that nobody has been clear about where the company is going, and culture can’t cohere around a strategy that doesn’t exist.

Every one of these root causes requires a different intervention. None of them are addressed by restricting external hiring. The VP’s proposal is treating a fever by removing the thermometer.

So What Does Actually Work?

If we take cultural health seriously as a strategic priority (and we should), what does the evidence point to?

First, build cultural infrastructure that scales. Stop relying on proximity and tenure to transmit culture. Build explicit programs, rituals, and leadership development that reinforce what matters. Schein (2010) argued that culture gets embedded primarily through what leaders pay attention to, what they measure, and what they control. If you’re not measuring cultural health with the same rigor as revenue, you’re telling the organization it doesn’t actually matter.

Second, invest in executive assimilation. Every external senior hire should have a structured integration plan. Not an orientation week. A real, multi-month program that accelerates cultural learning while capturing the new leader’s observations. This is infrastructure, not a perk.

Third, define what’s actually core. Most organizations have never done the disciplined work of separating their true core ideology from their accumulated habits. Without that clarity, every change feels like an attack and every newcomer feels like a threat. Do the work. Name the five things that are truly non-negotiable. Let everything else be open for evolution.

Finally, create feedback loops that include outside perspectives. External hires, new employees at all levels, departing employees, customers, partners: they all have cultural intelligence the organization needs. A culture that can only be understood by people who’ve been in it for a decade is not a healthy culture. It’s an insular one.

When a VP identifies cultural deterioration and responds by wanting to close the organizational boundary, that is itself a cultural signal. It suggests a leadership orientation toward protection rather than adaptation. It implies a mental model where culture is something that happens to the organization from the outside, rather than something the organization produces through its own choices and behaviors.

Argyris (1990) would call this a defensive routine. It’s a pattern that protects leaders from the discomfort of harder questions. Questions like: “How have we, as the existing leadership, contributed to this decline?” The discomfort gets redirected toward an external cause instead. Defensive routines are among the hardest barriers to organizational learning to break, partly because they feel so reasonable from the inside.

The more honest question is What are we investing in, or failing to invest in, that determines whether our culture strengthens or weakens regardless of where our leaders come from?

That’s a much harder question. And the willingness to sit with it, rather than reaching for a cleaner answer, might be the most telling signal a leadership team sends.

References

• Argyris, C. (1990). Overcoming Organizational Defenses: Facilitating Organizational Learning. Allyn & Bacon.
• Bower, J. L. (2007). The CEO Within: Why Inside Outsiders Are the Key to Succession. Harvard Business School Press.
• Charan, R. (2005). Ending the CEO Succession Crisis. Harvard Business Review, 83(2), 72–81.
• Collins, J. C., & Porras, J. I. (1994). Built to Last: Successful Habits of Visionary Companies. Harper Business.
• Deal, T. E., & Kennedy, A. A. (1982). Corporate Cultures: The Rites and Rituals of Corporate Life. Addison-Wesley.
• Hatch, M. J. (1993). The Dynamics of Organizational Culture. Academy of Management Review, 18(4), 657–693.
• Janis, I. L. (1972). Victims of Groupthink. Houghton Mifflin.
• Khanna, T. (2014). Contextual Intelligence. Harvard Business Review, 92(9), 58–68.
• Peter, L. J., & Hull, R. (1969). The Peter Principle. William Morrow and Company.
• Schein, E. H. (2010). Organizational Culture and Leadership (4th ed.). Jossey-Bass.
• Watkins, M. (2003). The First 90 Days: Critical Success Strategies for New Leaders at All Levels. Harvard Business School Press.

Daron Yondem advises senior technology leaders on AI-driven organizational transformation. Learn more →