Performance culture is designed. Not declared.

Reading Time: 3 minutes

Reading time: 3 minutes

Most organizations try to change culture by changing what people are told to value. That is rarely enough. Culture becomes consequential when the organization makes certain behaviours easier, more rewarding, and more sustainable than others. For senior leaders, the more useful question is not:

What culture do we want?

It is:

Does the way we have designed this organization make the behaviours our strategy requires more likely?

That is where high-performance culture begins.

Strategy becomes culture through behaviour.

Strategy defines where the organization wants to go. Culture becomes visible when people have to decide how to get there. A transformation may require greater ownership. A new market may require more speed. A customer opportunity may conflict with operational discipline. These moments reveal what the organization actually reinforces.

In a quantitative analysis of CEO perceptions across 764 organizations, Denison and Mishra (1995) found that involvement and adaptability were more strongly associated with growth, while consistency and mission were more closely related to profitability. Relationships with objective measures were strongest among larger organizations.

The implication is more specific than “culture drives performance.” A strong culture is not necessarily a performance culture. Culture creates strategic value when the behaviours it reinforces support the choices the organization is trying to make.

Leaders reveal culture. Systems reinforce it.

Values can describe the culture an organization wants. Leadership behaviour reveals the culture it actually has.

What receives attention?

What gets rewarded?

Who gets promoted?

What behaviour is tolerated when performance is under pressure?

Schein and Schein describe culture as being embedded through recurring leadership choices — including the allocation of attention and resources, responses to critical events, and decisions about rewards and advancement (Schein & Schein, 2017). But leadership signals alone are not enough. An organization may ask people to take ownership while requiring approval for every important decision. It may encourage experimentation while penalizing every failure. It may promote collaboration while rewarding only individual results. The message says one thing. The system makes another behaviour rational.

This is why organizational structure, incentives, decision rights, and governance matter. A 2026 Heidrick & Struggles perspective similarly argues that lasting performance culture requires alignment between strategy, leadership behaviour, culture, and organizational structure (Earle et al., 2026). What looks like a culture problem may therefore be a design problem in disguise.

High-performance culture also requires learning.

There is another tension. A performance culture cannot simply reinforce yesterday’s successful behaviour. It must also allow the organization to recognize when that behaviour no longer works.

In a study of 51 teams within one manufacturing company, Edmondson (1999) found that psychological safety was associated with learning behaviour. Learning behaviour, in turn, was associated with independently assessed team performance.The point is not that performance standards should become softer. It is that high standards require people to surface problems early enough to address them. Consistency without learning creates rigidity. Learning without clear performance expectations creates drift. Performance requires both.

The executive test.

Instead of asking:

Do we have a strong culture?

ask:

Which behaviours does our organization enable, constrain, reward, or penalize?

Then examine the gap between strategy and behaviour:

What behaviours does our strategy actually require?

Do leaders model and reward them?

Do incentives and decision rights reinforce them?

Can people act with sufficient autonomy?

Can they challenge established practices when circumstances change?

If the answers point in different directions, the problem may not be the culture. It may be the system around it.

Closing reflection.

You do not build a performance culture by telling people how you want them to behave.

You build it by designing an organization in which the behaviours your strategy requires can actually succeed.

Culture is not only what leaders say.

It is what the organization makes possible, rewards, and repeats.

by Anastasia Rettig I FLŌ

References

Denison, D. R., & Mishra, A. K. (1995). Toward a theory of organizational culture and effectiveness. Organization Science, 6(2), 204–223. https://doi.org/10.1287/orsc.6.2.204

Edmondson, A. C. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383. https://doi.org/10.2307/2666999

Earle, S., McLeod, H., & Sheikh, A. (2026, June 22). What it takes to build a lasting performance culture. Heidrick & Struggles. https://www.heidrick.com/en/insights/organizational-culture/build-lasting-performance-culture

Schein, E. H., & Schein, P. A. (2017). Organizational culture and leadership (5th ed.). Wiley.

Comments

November 22, 2021

Senna Smith

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  Tom Wood
  
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