Simon Cavendish:
Organisations often talk about ‘fixing’ their culture, as if it’s something that drifted off course on its own. But culture rarely behaves that way. It is largely shaped by what leaders consistently reward, tolerate, ignore, and challenge – not what gets written on posters.
Your culture is, to a significant degree, the outcome of your incentive system. As Charlie Munger, legendary American investor, businessman, and philanthropist, famously put it:
“Show me the incentive and I’ll show you the outcome.”
The myth of the ‘broken culture’
When leaders say they want to change their culture, what they often mean is: people aren’t behaving the way we want them to.
But in many cases, people are responding rationally to the environment they’re in.
If speed is consistently rewarded over quality, corners will get cut. If visibility is rewarded over impact, people will prioritise being seen. If loyalty is rewarded over challenge, silence becomes the safer option.
These outcomes aren’t random. They’re the predictable result of how the system is set up.
That doesn’t mean leaders intend these consequences. But intent matters less than what gets reinforced over time.
Values don’t shape culture on their own – trade-offs make them real
Most organisations have clearly defined values. Far fewer consistently make decisions that uphold them when it’s inconvenient.
A value like integrity carries little weight if rule-bending is overlooked in high performers. Collaboration struggles to take hold if promotions favour individual visibility over collective outcomes. Wellbeing becomes difficult to take seriously if burnout is quietly equated with commitment.
Values can shape culture – but only when they are reflected in decisions, trade-offs, and consequences.
Employees don’t just listen to what’s said. They pay attention to what happens.
The leadership blind spot
Culture is sometimes treated as something employees create, with leadership acting as a guiding influence. In reality, leadership behaviour – and the systems it creates – has a disproportionate impact.
Culture is also not entirely designed. It is shaped by informal norms, peer dynamics, and external pressures. But even within those constraints, leaders set the tone for what is prioritised, protected, and progressed.
Employees aren’t the problem. They’re often the clearest signal of how the system is working.
Why culture programmes struggle
Many culture initiatives focus on changing behaviours through workshops, campaigns, or refreshed values. These efforts can be useful – but they rarely stick if the underlying incentives remain unchanged.
If people are asked to behave differently but rewarded the same way, the system will win.
The real work
Shifting culture is less about articulation and more about alignment.
If leaders want a different culture, the most effective place to start is with what gets rewarded, recognised, and repeated:
- Who gets promoted
- What performance is measured against
- Which behaviours are tolerated in top performers
- Where trade-offs are made under pressure
Culture shifts when these signals change consistently over time.
Everything else can help – but on its own, it’s unlikely to be enough.
Your culture is not just what you say you value. It’s what your organisation consistently reinforces. If you want to understand it, look at who gets promoted, who gets paid, and what gets protected.
That’s the culture people believe.
