Culture Is What Happens When Nobody is Watching

Culture is one of those words that gets used constantly in business, but is often misunderstood.

Most organisations have a set of values. They are usually developed with good intentions, communicated to employees, included in induction programs and displayed prominently around the workplace. There may be statements about integrity, accountability, teamwork, customer focus, innovation or excellence.

All of those things can be important, but they are not culture by themselves.

Culture is what happens when nobody is watching. It is how people behave when the CEO is not in the room, when a customer has a difficult problem, when a deadline is under pressure, when something goes wrong or when there is a choice between doing what is easy and doing what is right.

Most importantly, culture is shaped by what leaders reward, what they recognise and what they are prepared to tolerate.

Over more than 20 years in senior executive and CEO roles, I have seen this play out in organisations of very different sizes and across very different industries. One of the consistent lessons for me has been that sustainable performance improvement rarely comes from strategy alone. It comes when you create an environment where people understand what the organisation is trying to achieve, understand their role in achieving it and feel a genuine sense of ownership over the outcome.

That is when culture starts to become a competitive advantage rather than simply another management initiative.

An organisation can say that it values accountability, but if missed commitments are repeatedly accepted without consequence, people quickly learn that accountability is not actually the standard. An organisation can say that it wants innovation, but if people are criticised whenever something does not work, they will naturally become more cautious. An organisation can say that customers are its priority, but if internal processes and targets consistently take precedence over customer outcomes, employees will work out very quickly what the organisation really values.

People pay much more attention to what leaders do than what they say.

They notice who gets promoted, who gets rewarded, which behaviours are recognised and which behaviours are overlooked. They notice whether poor performance is addressed or continually explained away. They notice whether leaders take responsibility when things go wrong or look for someone else to blame. They notice whether the standards applied to employees are also applied to the leadership team.

Over time, these observations become the unwritten rules of the organisation.

Those unwritten rules are culture.

This is one of the reasons I have always seen culture and performance as closely connected. When I have been brought into organisations or business units that needed to improve performance, the answer has rarely been to simply tell people to work harder or to introduce another set of targets. The more important question has been what is preventing good people from performing at their best and what needs to change in the way the organisation operates.

Sometimes that means greater commercial discipline. Sometimes it means clearer accountability. Sometimes it means changing systems and processes, improving leadership capability or removing unnecessary layers of decision-making. Often it involves several of these things at the same time.

But underneath all of them is behaviour.

People need to understand what matters, what they are accountable for and how their decisions contribute to the performance of the organisation. They also need to know that leadership will support them when they take ownership and will address behaviour that works against the interests of the organisation.

There is a significant difference between compliance and ownership.

Compliance is doing what you have been told to do.

Ownership is understanding the outcome that needs to be achieved and taking responsibility for helping make it happen.

That distinction has been important throughout my career. In many of the transformation and performance improvement situations I have led, one of the objectives has been to move people away from simply managing their individual responsibilities towards understanding how their work contributes to the broader commercial and organisational result.

When that happens, the conversation changes.

Instead of people asking what they have been instructed to do, they start thinking about what needs to happen for the customer, the team and the organisation to succeed. They begin identifying problems earlier, looking for solutions rather than excuses and taking greater responsibility for the result.

That is not something you can create simply by writing a new value statement.

It comes from leadership behaviour and consistency.

At the Housing Industry Association, I was responsible for company-wide commercial operations across a large national organisation, with more than 300 people and operations across more than 20 locations. The performance challenges were not solved by changing a single strategy or introducing a new target. They required a broader transformation across membership, training, events, retail, customer service and other parts of the organisation, with people understanding the connection between the work they were doing, the value being delivered to members and the commercial performance of the organisation.

When people understand that connection, accountability becomes much more meaningful because they can see why their contribution matters.

I experienced a similar dynamic at Zonda, where I led an operational and commercial transformation that moved the business from losses to a 34% gross profit position within nine months. The financial result was important, but it was not achieved through financial management alone. It required changes in commercial discipline, operational performance, accountability and the way the organisation focused on creating value.

This is why I am cautious when I hear culture described as a responsibility of HR or People & Culture.

There is an important role for those functions in supporting culture, but culture ultimately belongs to leadership.

Every decision made by a leadership team reinforces or weakens the culture it is trying to create.

A CEO who allows an executive to consistently underperform without addressing it is making a cultural decision. A leader who rewards someone for achieving a commercial result while ignoring the way they treated customers or colleagues is making a cultural decision. A leadership team that says it wants collaboration while allowing executives to protect their own functions and compete for resources is making a cultural decision.

The same applies to positive behaviour.

When leaders recognise someone who has taken responsibility for a difficult problem, supported a colleague or made a decision that protects the long-term interests of the organisation, they are reinforcing the behaviours they want to see repeated.

This becomes particularly important when an organisation is going through growth, transformation or turnaround.

Pressure tends to expose culture.

When things are going well, almost any organisation can look cohesive. When performance comes under pressure, you quickly discover whether people genuinely take ownership or whether they retreat into functional silos, protect themselves and look for someone else to blame.

You also discover whether people feel safe enough to raise problems early, whether managers are prepared to make decisions and whether the organisation is focused on solving the problem or explaining why it exists.

For me, this is where culture connects directly to one of the biggest challenges facing CEOs.

Most organisations do not fail because they lack a strategy. They struggle because leaders cannot align people, capital, culture and execution around what actually creates value.

A strategy can be completely logical on paper and still fail because the organisation's behaviours are working against it.

If the strategy requires speed but every decision requires multiple levels of approval, the culture will slow it down. If the strategy requires customer intimacy but teams are measured primarily on internal efficiency, the culture will pull people in another direction. If the strategy requires accountability but leaders continually intervene and make every important decision themselves, people will naturally wait for the next instruction rather than taking ownership.

This is why I believe one of the CEO's most important responsibilities is creating the conditions in which people can succeed.

That does not mean making everyone comfortable or avoiding difficult conversations. In fact, strong cultures require leaders who are prepared to challenge poor performance, confront difficult issues and make decisions that may not always be popular.

The objective is not comfort.

The objective is alignment.

People need to understand where the organisation is going, what creates value, what good performance looks like and what behaviours are expected along the way. They need the authority, information, systems and support to do their jobs properly, while also being held accountable for the outcomes they are responsible for delivering.

When those things come together, something powerful happens.

People start to feel that the success of the organisation is also their success.

That creates a much stronger foundation for performance because people are no longer simply completing tasks or meeting targets. They are taking ownership of an outcome that matters to them, their colleagues, their customers and the organisation as a whole.

For me, that is the real opportunity with culture.

It is not about creating a workplace where everyone agrees with everything or where difficult conversations are avoided in the name of being positive. It is about creating an organisation where people know what matters, trust the leadership, understand what is expected and feel responsible for helping the organisation succeed.

The best cultures I have experienced have not been created by posters on walls or carefully worded values statements. They have been created through consistent leadership behaviour, clear expectations, accountability and a genuine connection between individual contribution and organisational outcomes.

Culture is therefore not something that sits alongside strategy and performance.

It is one of the things that determines whether strategy and performance are possible in the first place.

Every time a leader rewards a behaviour, they reinforce it. Every time they tolerate a behaviour, they send another message. Over time, those decisions become the standards people operate by, whether they are written down or not.

That is why culture is what happens when nobody is watching.

Because when the CEO leaves the room, the leadership team stops talking and the policies are put aside, what people actually do is the clearest reflection of what the organisation really values.

And ultimately, that is what determines whether people simply work in an organisation or whether they genuinely take ownership of making it succeed.

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