From the comments: "Nurturing mediocrity" is exactly what my old company was doing. In 2018 they announced there would be staff reductions but no layoffs. They would cut staff through natural turnover. As people leave, they just wouldn't backfill. On their management reports, all staff was equally good. But reality was the mediocre employees know they have a good thing going while the great ones see it's going to get bad and start looking around. Management said they wanted to avoid the hurt feelings of layoffs which can happen even among those who are kept. But they lost an opportunity to cut mediocre staff and created years of discontent among all employees. There is a certain class of manager (all too common) that will assume something does not exist if you can’t see it on a management report or a balance sheet. Innovative engineers in particular shun that type of thinking, and that’s why that line of thought drives them away. That type of manager will always nurture mediocrity as a result.
This happens when the principle guiding theory of the company is "don't rock the boat." If the goal of management is to do the minimum amount of managing, they will lean into policies where you do not act on something unless "not acting" carries more penalty in advance than "acting" does. In a stable organization, this is almost never true. More than that, "it's better to be wrong together than right alone" is a bureaucratic evergreen. If you draw attention to something that needs to be fixed, and it benefits someone with more power than you, even if you get it fixed you're perennially fucked. On the other hand, it's almost impossible to get fired for failing to notice something that everyone else is also studiously failing to notice. It's a Tragedy of the Commons issue. I have a friend who has a reputation for fixing things that are broken. You bring her into your organization because you have acknowledged that things need to get better. She rips through like a tornado and turns everything over and then you have a new structure and you promote her and now she's looking at the larger organization and pointing out things that are wrong that you don't want to deal with (yet, because of all of the above) so you decide she isn't your friend anymore and you passively-aggressively indicate that she needs to find a new job. She's been just-under C-suite at no less than a dozen companies in no less than a dozen years because once a problem is acknowledged? If you fix it you're the hero. But before everyone acknowledges the problem? If you draw attention to it you're a traitor. She was brought in to clean up some benefits administration problems at a cruise line about a year before COVID. The massive crises the cruise industry has sustained since have basically made her a direct report to the CEO. Should things ever stabilize, though, she'll be out the door.
Management is always right. Telling them they're wrong is a bigger sin than accepting the wrong answer. Even if they later themselves shift to the right answer, previously disagreeing with them remains a black mark.