Once an organization becomes successful, the good times should roll in. But that’s not always the case, as once-stable brands like Sears, Kodak and Blockbuster can attest.

Such success can also harden a company into stasis and conformity, to the point that they’ll be left behind, said John Nasr, managing director of The Miles Group, a global talent consulting firm. He previously spoke about this phenomenon with Miles Group CEO Stephen Miles on the C-Suite Intelligence podcast, and recently elaborated on it for HR Dive, describing how it specifically can affect human resources.

Editor’s note: This interview has been edited and condensed for clarity.

HR DIVE: When you talk about the “dark side of company culture,” what do you mean?

NASR: For us, culture is not something that you can readily point to or define. It’s the output of a set of behaviors and actions inside an organization. It’s tested and measured at the margins, when things get tough. When leaders have to make hard choices, that’s when culture is shaped or fortified. People define the culture for you, based on what leaders are willing to tolerate.

From that, you can have a high-performing company culture or one that drives high levels of conformity or stasis.

What’s the difference between a company reaching those two endpoints?

Culture is a Day 1 vs. a Day 2 mindset. In 1997, Jeff Bezos described Amazon as having a Day 1 mentality, and was trying to fortify a culture around this long-term, even ultra-long-term focus on innovation. In 2016, he was asked what a Day 2 mentality looks like. “Day 2 is stasis,” he said. “Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

The “dark side of company culture” is the move from a Day 1 mindset to a Day 2 mindset. A Day 1 organization is scrappy. It is resilient. It has to put points on the board. There is a very clear mandate and purpose, and resources tend to be limited. When you get into a Day 2 mindset, it’s because an organization that had high levels of success now has more resources and more layers, and it gets focused on reinforcing what we would call the business of today.

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