Fixing the foundations: the 3 shifts in thinking that organisations must master

In one form or another, most organisations today place a greater emphasis on performance and high performance culture. “Change being the only constant” is a tired trope. However, global trends continue to reshape the world economy towards greater competition. At the same time, employment, energy and raw material costs have structurally increased. Demand has also weakened and become less predictable. In addition, global supply chains have fragmented. The pace of development in technology, particularly AI, is also disrupting established business models.

Higher interest rates have also sucked cash out of the economy. Together, these factors create an unwelcome cocktail for many organisations. If you lead an organisation today, generating profit seems harder than ever. Future predictability has also all but evaporated.

As a result, businesses now need to act decisively. However, they must do so with more constraints, fewer resources and lower confidence than they are used to. What is clear is that most organisations have shifted their focus and tone towards results, performance, efficiency and cost control.

Most organisations now frame this shift as a move towards a “High-Performance Culture”. A focus on performance itself is not new. After all, large organisations often drift towards an internal focus, bureaucracy and maintaining the status quo. However, current realities and a rapidly changing world have created greater urgency around these efforts. For examples of this, see recent announcements by Unilever, VW and Microsoft, amongst many others.

Announcing a push for greater performance orientation is one thing. Accompanying this with improvements in decision-making, adoption of new technologies and manager accountability is also important. However, making it a reality is something else entirely. Many organisations still struggle to make this shift. Therefore, in this two-part series of articles, I will lay out what is involved in creating a shift towards greater performance orientation and high performance culture. I will also provide leadership and people teams with a guide to focus, sequencing and prioritisation.

This first article focuses on the shifts in mindsets and belief systems within an organisation. These hidden philosophies make organisations tick and silently guide decision-making. In order to enable a greater focus on performance, these shifts in thinking need to happen first. If organisations fail to master these shifts, no amount of communication or initiative-focus will move the needle. Therefore, organisations must start by looking in the mirror.

There are three.

1. Firstly, organisations need to shift from believing they cannot measure culture to recognising that they can, and must, measure it.

The old adage, “what gets measured gets managed”, captures the power of metrics in driving action and accountability. This applies to culture as much as any other area, arguably even more so. However, organisations have traditionally seen culture as “fluffy”, which has allowed it to avoid the focus of traditional management. For a long time, many leaders believed they could not measure culture. As a result, organisations failed to incorporate culture fully into management toolkits or set expectations and targets around it.

“You can’t measure culture, you just feel it” is both unhelpful and untrue. It is unhelpful because this belief encourages subjective and intuitive interpretations of culture. Consequently, local manager preferences and habits often define employee experience and behavioural expectations. The result is a localised and variable culture. This is a common starting point when we first baseline an organisation’s culture. Organisations with locally-driven sub-cultures often struggle to cooperate across geographies and teams. This happens because they lack a common pattern of behaviours and expectations around how work gets done. As a result, friction and dislocation increase.

Organisations that want to improve performance through better cross-functional collaboration need to start by accepting the need to measure culture. They must then act on the variations they uncover.

2. The second shift is perhaps the most obvious. However, it is also the most prevalent challenge.

Organisations need to shift the framing for culture away from how people feel and towards how people behave.

Over the past 10–15 years, engagement platforms have become ubiquitous. These platforms allow organisations to regularly survey how employees feel. As a result, many organisations now bake engagement metrics into both individual and organisation-level KPIs. At the same time, organisations increasingly recognise culture as critically important to success and failure. Consequently, efforts to measure sentiment have become intertwined with culture. Many organisations now assume the two are the same thing.

“If I regularly survey my employees about what they think and feel, surely I am managing culture, right?”

Actually, no.

This sort of sloppy thinking leads organisations to describe culture as either “good” or “bad”. In many cases, this simply means employees are either happy or unhappy. Of course, pursuing happiness is deeply human. Everyone also deserves to work in an environment that does not intentionally make them unhappy. However, whether a workforce feels happy tells leaders very little about how work actually gets done.

In fact, pursuing organisational popularity can actively prevent deliberate culture design. Employees begin to self-determine their own level of satisfaction. Consequently, behaviours become shaped by personal preference. Ironically, our experience shows that this decreases employee engagement and morale over the long term. It also increases workforce attrition and weakens bonds between colleagues. This happens because organisations fail to create common expectations around behaviour. As a result, people no longer know where they stand.

In order to actively manage culture, organisations need to shift the conversation. Rather than placing employee happiness at the centre, leaders should describe culture in terms of how work gets done. Culture exists in individual actions and collective behaviours. This includes how people make decisions, interact with one another and share information.

This creates three important consequences in interpretation and understanding.

Firstly, culture stops becoming a question of “good” or “bad”. Instead, organisations begin asking: “Do we have the culture we need to succeed?” This creates a more intentional and strategy-driven lens. It also allows organisations to deliberately design culture.

Secondly, organisations realise that employee engagement is an outcome of culture, not the primary goal. Happy and engaged teams emerge when organisations align lived behaviours with what leaders espouse and apply them consistently.

Thirdly, culture becomes measurable because collective behaviours are observable. As a result, organisations can include culture within key performance indicators and management frameworks.

High-performing teams develop when organisations create clear behavioural expectations. Leaders must then reinforce these behaviours rigorously and repeatedly through recruitment, performance management, coaching and feedback.

3. Implicit within the first two points is the need to treat culture as a core element of an organisation’s strategic narrative.

Culture is not solely an HR topic. Instead, it describes how an organisation operates. As such, culture plays a critical role in executing strategy successfully. Therefore, leadership teams and managers must collectively own it.

Managers should clearly and consistently communicate the desired culture. They should also explain how the right behaviours connect to strategy and successful outcomes. The more leaders position culture as both a management topic and an ongoing focus, the more deeply they embed it into how people think and behave. Otherwise, employees may dismiss it as another temporary initiative or HR responsibility.

The first two mindset shifts in this article often expose capability gaps in leadership teams. Many managers feel unfamiliar or uncomfortable discussing behaviours and mindsets. Others only partially understand the strategy itself. In order to create an organisation that understands not only what must be done, but also how it must be done, leaders need to bridge these gaps. They can do this through greater focus on these topics, improved storytelling skills and stronger behavioural modelling from senior leaders.

A performance-based culture depends on effective leadership. Effective leaders provide four essential ingredients:

• Context for the work — the “why”
• Focus and prioritisation, so people can concentrate on critical work and confidently say no to distractions
• Clear behavioural expectations
• Ongoing coaching that remains both supportive and uncompromising

As a result, many organisations now develop leadership capability alongside performance orientation and high performance culture. In reality, these are two sides of the same coin. Leaders shape culture, and culture directly reflects leadership.

The shift in collective mindsets outlined in this article should act as food for thought, a high-level framework and a set of foundational ideas. Organisations can use these ideas as they build more performance-orientated cultures. Taken together, these shifts can be summarised through one central imperative: “Putting culture at the heart of business performance”.

In order to create a performance-orientated culture, organisations must treat culture management as a core management responsibility. This should sit alongside strategy-led thinking, clear expectations, meaningful metrics and ongoing focus.

The second article in this series will focus on the practical behaviours that build sustained performance orientation. It will also discuss the implications and trade-offs involved.