The Hidden Cost of Niceness
If Labor Day is about honoring work, then the real way to honor it is by refusing to let harmony masquerade as culture.
Happy Labor Day, everyone!
Labor Day has interesting origins. The first parade was held in New York City in 1882, organized by labor unions to spotlight the grueling conditions workers faced: 12-hour days, seven-day weeks, child labor, and unsafe factories. By 1894, after the violent Pullman Strike shut down rail traffic and left dozens dead, Congress rushed to make it a federal holiday. It was less a celebration than a concession, a recognition that standards at work could no longer be ignored.
This is why, to me, Labor Day is a strange holiday. On paper, it’s meant to honor work and workers, a pause to reflect on the value of labor. In practice, though, it’s become a long weekend of barbecues, back-to-school sales, and the unofficial end of summer.
But maybe that’s fitting. Work is easy to take for granted until you stop and think about what really drives it. It isn’t perks, ping-pong tables, or slogans painted on the wall. It’s people who show up, do the hard things, and speak the truth even when it’s uncomfortable.
Which is why a data point I came across recently hit me so hard: the average organization loses $7,500 per employee every year because people don’t speak up about problems.
It’s not an expense you’ll ever see labeled on a financial statement, but the costs are everywhere:
In SG&A as bloated overhead when errors aren’t surfaced and corrected.
In COGS when inefficiencies go unchallenged and quietly multiply.
In revenue when bad client decisions slip through because no one wanted to disagree in the meeting.
And in turnover costs when your best people leave after watching mediocrity get a free pass.
That’s the hidden price of silence. And silence often masquerades as something we celebrate: niceness.
Niceness feels like a virtue. Teams that “get along,” that avoid conflict, that smile through meetings — these are often celebrated as examples of good culture.
But here’s the uncomfortable truth: niceness destroys cultures.
The Theory
The idea isn’t new. In 1972, Irving Janis introduced the concept of groupthink. He studied policy disasters like the Bay of Pigs and Vietnam escalation, concluding that highly cohesive groups drift toward shallow consensus. The pressure to maintain harmony overrides the obligation to test ideas. Niceness, in other words, suppresses truth.
Amy Edmondson’s work on psychological safety is often misinterpreted in the same way. Leaders think it means “make everyone feel comfortable.” In fact, Edmondson showed the opposite: the highest-performing hospital teams reported more errors, not fewer, because they spoke up. True safety isn’t comfort. It’s candor under pressure. The confidence to challenge, because the group is committed to standards, not to feelings.
Nice cultures conflate the two. They confuse politeness with respect. They assume friction is toxic, when in fact friction is the mechanism that raises standards.
The Data
Groupthink is costly. A meta-analysis of 72 studies (Esser, 1998) found that cohesive groups are systematically more prone to defective decision-making.
Candor improves performance. Edmondson’s 1999 hospital study showed that “error-reporting” teams had 35% better patient outcomes, precisely because problems were surfaced and corrected.
Conflict predicts performance. Eisenhardt et al. (1997) found that cognitive conflict (debating ideas) was positively correlated with performance, while affective conflict (personal friction) was destructive.
Silence drains millions. VitalSmarts (2005) estimated the average organization loses $7,500 per employee annually because people don’t speak up.
Niceness feels cheap in the moment. Over time, it compounds into massive hidden costs.
The Economics of Niceness
Culture is a coordination game. High standards act like a Schelling point — a focal point everyone can align to. Niceness undermines that point. Once “don’t rock the boat” becomes the rule, everyone converges on silence, consensus, and lowered expectations. Mediocrity becomes the equilibrium.
In economic terms, niceness functions like a negative externality. Each act of staying “nice” may lower tension for the individual, but it imposes a cost on the group, and standards slip for everyone.
Markets teach the same lesson. Intel spent years avoiding candor about its manufacturing delays, soothing investors with reassurances that things were “on track.” The politeness bought time but cost them a decade of leadership. Nvidia, by contrast, bet candidly and boldly on GPUs and is now one of the most valuable companies in the world.
Microsoft under Steve Ballmer was another case study in niceness: meetings were cordial, but nobody challenged blind spots. Satya Nadella began his tenure not with harmony but with confrontation — shutting down projects, admitting failure, and raising standards. Today, Microsoft is worth over $3 trillion. Amazon institutionalized the same approach with its “disagree and commit” ethos, while Sears smiled its way into irrelevance.
In each case, niceness was not free. It was fatal. Candor, however uncomfortable, was the variable that compounded.
Labor Day was born out of conflict in service of standards. The parades and speeches of the 1880s were not about harmony, they were about setting a higher bar for what work could mean. The irony is that a holiday forged in confrontation is now celebrated by companies that quietly let niceness eat away at their own standards.
The Pullman Strike of 1894 is the clearest reminder. The Pullman Company built what looked like a model town for its workers: neat houses, manicured lawns, a library, even a church. It was marketed as progressive, humane, and, above all, nice. But when wages were cut during a downturn and rents in the company town stayed high, niceness gave way to reality. Workers lived in debt, silenced by a culture that valued appearances over truth.
The strike that followed brought the nation’s railroads to a halt. Federal troops were sent in. Dozens of workers were killed. And only then, as a political concession, did Congress pass legislation making Labor Day a federal holiday.
The lesson from Pullman is the same lesson organizations keep forgetting: facades don’t hold. Niceness may preserve harmony in the short term, but it collapses under pressure. Only candor and standards endure.
Excellence is never “nice.” It is respectful, it is demanding, it is professional — but it is not nice.
So as we pause this weekend to reflect on the meaning of work, the question is worth asking:
Does your culture want to be liked — or does it want to win?
What a weird and wonderful world,
Quick PSA
On a different note, I wanted to share something personal with you all. This year, I’m running the Chicago Marathon on behalf of the American Cancer Society. Cancer has impacted so many lives, including my own, and I’m honored to be running in support of research, treatment, and patient care.
If you’ve enjoyed this newsletter and want to support a great cause, I would truly appreciate any donation toward my fundraising goal. Every contribution, big or small, makes a difference.
Thank you for your support—it means the world to me!