Growth isn't just about data or AI—Deloitte's Japneet Kaur explains what's missing

Workplace culture has long been treated as a soft concept—valuable, but secondary. But in today’s business environment, where AI is redefining workflows, disruptions are frequent, and workforce expectations are shifting rapidly, culture is proving to be anything but peripheral.

The India Culture Index 2024–25 by Deloitte India underscores this shift. Drawing on data from over 300 organisations across six core sectors—IT/ITeS, financial services, manufacturing, pharmaceuticals, retail, and infrastructure—the report positions culture not as a supporting element, but as a central driver of performance. Organisations with mature, well-defined cultures are seeing up to 1.7x higher profit margins and 1.6x better talent retention than their peers.

In an in-depth discussion with People Matters, Japneet Kaur, Partner at Deloitte India’s Human Capital Consulting practice and the lead architect of the Index, explores why culture needs to be treated as a strategic lever—one that shapes leadership decisions, organisational design, and long-term resilience.

“We still treat culture like it’s an extracurricular,” Kaur says bluntly. “It comes up during Diversity Days, offsite retreats, or when engagement scores dip. But it rarely shapes decisions around capital allocation, business strategy, or executive accountability. That has to change.”

According to the Index, high-culture maturity organisations are:

• 1.7x more likely to grow profit margins and free cash flow

• 2.1x more likely to report higher employee engagement

• 1.8x more likely to demonstrate long-term resilience during macroeconomic uncertainty

Despite this, only 34% of surveyed leaders said their organisations actively measure culture at the C-suite level.

“It’s time for a reframing,” says Kaur. “Culture is not just about 'how we work together.' It’s about how value gets created, how trust gets built, and how strategy gets executed. Culture belongs on the CEO’s dashboard, the CFO’s strategy deck, and the investor pitch.”

She advocates embedding cultural KPIs into leadership scorecards, linking bonuses to inclusive behaviors, and making values-driven leadership a performance criterion. “HR can be the guide, but the custodians of culture must sit at the top.”

One of the most urgent insights from the Index: just 23% of companies scored high on Agility and Innovation. That’s a major gap in a world where adaptability is a survival skill.

“Too many organisations still operate on legacy mindsets—‘Don’t mess up’ is prioritised over ‘Try something new.’ That fear-based environment is killing innovation,” says Kaur.

She breaks down what it takes to build an agile culture:

• Decentralised decision-making to empower frontline teams

• Cross-functional teaming to break down silos

• Safe-to-fail environments where risk-taking is encouraged

For example, leading IT companies in the Index demonstrated a higher correlation between agility and financial growth. These companies invested in product sprints, hackathons, and internal accelerators—creating mechanisms that reward speed and experimentation.

“Failure shouldn’t mean fallout. It should mean learning. Agility isn’t just a practice; it’s a mindset,” Kaur adds.

Inclusion vs performance: A false binary

Another paradox the Index uncovers is the persistent belief that focusing on inclusion can dilute high performance. In reality, the data shows the opposite.

“Inclusive environments enable performance,” says Kaur. “Psychological safety enhances collaboration. Equity improves decision-making. Fairness boosts retention. There is no trade-off—if anything, inclusion is a multiplier.”

However, only 41% of organisations report having bias-free appraisal systems and equitable career progression paths. This contributes to low morale, high attrition, and toxic silos.

Kaur recommends aligning inclusion metrics directly with performance management:

• Evaluate managers on how they elevate diverse voices

• Integrate inclusive leadership into promotion criteria

• Reward behaviours like sponsorship, coaching, and transparency

She cites a case where a BFSI firm redesigned its performance management system to include upward feedback, DEI metrics, and blind spot training for mid-level managers. The result: a 13% improvement in team engagement and a 7% uptick in quarterly productivity.

“Diversity is passive. Inclusion is active. And only inclusion drives results.”

The Index draws a stark contrast between transformational leaders—those who coach, co-create, and challenge the status quo—and transactional managers, who are focused only on task execution.

“Transactional leadership may keep you afloat. But transformational leadership makes you future-fit,” says Kaur.

What differentiates the two?

• Vision over execution

• Empathy over control

• Influence over instruction

Data from the Index suggests that transformational leaders are 2.4x more likely to retain top talent and 1.9x more likely to lead profitable teams.

Kaur urges companies to invest in leadership development programs that prioritise:

• Emotional intelligence

• Systems thinking

• Long-term value creation

“We need to stop promoting only the deliverers. Start promoting the culture builders.”

While 80% of companies have employee listening tools in place, only 27% use the data to drive meaningful change.

“Listening without action breeds disillusionment,” warns Kaur. “Real transformation comes from redesigning systems based on what you hear.”

She points to real-time culture dashboards, sentiment heatmaps, and quarterly culture reviews as emerging tools for proactive cultural stewardship.

This means embedding culture into:

• Hiring frameworks

• Onboarding journeys

• Recognition architecture

• Exit interviews

“Culture isn’t built in town halls. It’s built in decisions—who you promote, who you reward, what you tolerate.”

M&A and IPOs: Where culture must show up

Culture failure is a top reason why M&A deals fail—yet only 32% of leaders consider culture in due diligence.

“Financials are easy to align. Culture isn’t,” Kaur explains. “If you’re acquiring a startup with a flat, autonomous culture, and you’re a bureaucracy-heavy firm, the talent won’t stay.”

She urges boards and investors to treat culture as a strategic risk and an integration lever. Some PE firms have already begun demanding cultural audits as part of investment checks.

“Soon, culture will sit alongside ESG in IPO checklists.”

While 87% of companies report strong focus on skilling, only 39% have adopted personalised learning pathways.

“We’re still stuck in tenure-based promotions and static LMS modules,” Kaur says. “But employees today want choice, autonomy, and progress.”

She recommends investing in:

• Skills-based talent architecture

• Internal gig marketplaces

• AI-led, self-curated learning journeys

One tech firm in the Index implemented a skills wallet and saw a 22% increase in lateral movement and 28% drop in attrition.

“Think of careers not as ladders—but as lattices. The more flexible your pathways, the more resilient your workforce.”

Only 51% of organisations report a strong culture of ethics and integrity. For a modern workforce, that’s a red flag.

“This isn’t about policy documents,” says Kaur. “It’s about the lived experience—whether people feel pressured to cut corners or believe that leadership walks the talk.”

To strengthen ethics, she suggests:

• Linking ethics to leadership evaluations

• Consequences for misconduct regardless of role

• Training decision-makers on ethical dilemmas

“Ethics isn’t just a compliance checkbox—it’s a brand promise. And once broken, trust is hard to regain.”

As disruption becomes the default, organisations need more than technology. They need cultural resilience.

“Your product may change. Your market may shift. But your culture—if deeply embedded—can keep you trusted, relevant, and united,” Kaur notes.

Culture is no longer intangible. It’s trackable, measurable, and monetisable.

When asked what separates high-culture companies from the rest, Kaur replies: “Courage.”

“The courage to challenge legacy systems. To lead with empathy. To reward the right behaviours. And to take accountability—not just for what’s achieved, but how it’s achieved.”

In the end, culture isn’t a tagline. It’s a decision.

“The companies that choose culture—deliberately and systemically—will define the future of Indian business.”

Top Insights from the India Culture Index 2024–25

• Strong culture drives results: 1.7x boost in profit and 1.6x better retention

• Agility remains a weak spot; only 23% scored high

• Inclusion improves performance; it’s not a trade-off

• Ethical consistency is still lacking in nearly half of Indian firms

• Leadership behaviour is the single strongest predictor of cultural maturity

• Listening is widespread, but action is lagging

• Transformational leaders are 2.4x more effective in talent and growth outcomes

As the race for talent, trust, and transformation intensifies, culture is no longer a background variable. It is the currency of credibility, the operating system of excellence, and the core competitive advantage for companies that dare to lead differently.

Those that invest in culture today won’t just weather disruption. They’ll redefine leadership—and shape the future of Indian business.