Culture eats strategy for breakfast, or so the saying goes.

It’s mostly true, I’ve come to learn. When Cisco employees, for example, believed in a mission, they could break through walls and take over adjacent markets. But when they doubted management’s ambitions, like they did when the company cooked up a plan to compete with Skype with high-priced devices and services, they didn’t even break a sweat.

All companies go through periods of disillusionment or flights of fancy. Bad ones, however, get stuck in these phases. If you work in a toxic culture, say one in which the truth is fungible, undefined or, worse, inconvenient, then I have some bad news: you’re screwed.

After 30 years of covering tech companies, I’ve never seen one prevail with a culture built upon lies. Now and then one captures the industry’s imagination or jumps to the head of a market. (Think Theranos, Zenefits, Yahoo, Groupon and more.) But they are always undone by their adherence to  alternative facts.

Boy, what false thinking can lead a company to do. Over the years, I’ve heard of everything from the hard drive maker that shipped bricks in boxes to keep up appearances that it was fulfilling orders to the social media company that promised your photos would disappear to the auto company that cheated on its government emissions tests.

Institutional lying is as old as civilization. But how it takes root and spreads is fascinating. Here are some of the ways I’ve seen it destroy organizational culture.

  • This is just a short-term thing: Ever hear that old saw? It takes on many forms, including, “We only need to act this way to 1) win this account 2) meet our quota 3) show the world who we are…” Trouble is when an organization contorts itself long enough to satisfy a short-term objective, it often loses the flexibility or will to revert back to its natural state. Bottom line: be wary anytime someone insists on adopting a new stance to impress someone else.
  • The new boss has a vision: According to studies, CEOs now remain at the helm of organizations for 7.4 years. But at some companies, management changes with the seasons. In these environments, decisions are invariably made by HIPPOs, or the "highest paid person's opinion." Forbes writes that “HiPPOs are leaders who are so self-assured that they need neither other's ideas nor data to affirm the correctness of their instinctual beliefs.” Be careful around such beasts; they tend to consume a lot and trample everything.
  • People are counting on us: Ah the excuse of middle-managers everywhere. In environments where this sentiment prevails, failure isn’t an option. But maybe it should be. Doing the wrong thing for all the right reasons is never smart. And sometimes lessons learned from setbacks are the most instructive. If you’ve ever asked “why are we doing this this way?” and been told “it’s because people are counting on us,” you know you’re working in an alternative universe. Be forewarned: what follows is often a harsh reality check.
  • It’s always worked for us before: As we all know, technology constantly changes, markets transform and business needs evolve. Throw in the occasional social shift and you begin to recognize how impossible it is for any business to stay the same year-in, year-out. And yet millions try. To thrive, you have to change. This includes reevaluating your people, processes and culture, too.
  • We’re simply the best: When Alan Mulally took over as Ford CEO more than a decade ago, he insisted that his top lieutenants drive competitors’ cars. He wanted them to know exactly what made Ford cars better—and in many cases—what made them worse. It was just one simple way the former Boeing exec created a culture of truth sharing at Ford. In organizations where arrogance abounds, reality checks are a rare thing. Ideas and platitudes are promulgated and then institutionalized. When they are, truths are buried for good.

There are many reasons why organizations get lost. But the surest one I’ve seen is when they lose their institutional moral compass. An honest culture helps companies follow their True North and pursue their dreams.