The company had virtually no business outside the United States.
Though fewer companies today maintain such obvious “window watcher” roles, many still find quiet ways to park underperforming leaders in undemanding jobs where they can live out their corporate life undisturbed. It would be heartwarming to believe that this practice is a manifestation of an explicit social contract between company and employee (give us your most productive years and we won’t discard you when your effectiveness wanes), but I’ve found it’s usually about something more fundamental: a culture of underperformance.
A culture of underperformance is created by underperforming leaders.
As leaders, our job is to bind together people and resources to produce a desired result. Underperformance—whether tolerated, rationalized, and/or ignored—erodes the quality of your output and increases the burden on your best employees, who work to cover the shortfalls of the underperformers.
For decades, organizations could afford some mediocrity. That era is ending. As AI accelerates productivity and reduces the number of roles required to generate results, the people who remain must be strong performers. Every calorie of time, energy, and capital will need to yield a high return. We’re at the front edge of a wave of productivity that will sweep across our economy and our organizations. To compete, we must build cultures that expect, generate, and reward high performance.
I spend much of my time working alongside CEOs, executive teams and their direct reports. In private conversations about talent, I repeatedly hear the same rationalizations for why chronically underperforming leaders remain in role:
Some of these arguments occasionally have merit. But let’s not kid ourselves—underperformance is tolerated for a simpler reason: we dislike the emotional discomfort that surfaces when we hold people accountable. We don’t want to have the hard conversation. We don’t want to enter the emotional minefield. We don’t want to risk things getting worse before they get better. Conflict makes us feel bad.
So we rationalize, avoid candor and confrontation, and kick the can down the road.
And in doing so, we shift the cost of our inaction onto the rest of the organization. Our unwillingness to act means others must compensate. Our emotional discomfort becomes their operational burden. Our silence compromises quality and results. Our leadership is the failure point.
In the years ahead, the productivity pressure unleashed by AI will make this behavior on the part of leaders untenable. Organizations will measure output-per-employee in ways we’ve never experienced. If excellence is not a cultural priority, then it will be impossible to keep raising the performance bar.
If you intend to build a performance culture, you’ll need more than slogans and compensation tweaks. You’ll need to drive three fundamental shifts:
We can’t afford to confuse our organizations at a moment when volatility is the norm and shareholders are screaming for productivity increases (supercharged by the assumption of AI’s impact). The crossed wires and conflicting actions caused by ambiguity will pour sand in the gears of an enterprise. I’ve witnessed too many companies whose core strategic choices were so poorly defined that the executive team wasn’t clear among themselves about the top-priority initiatives or desired outcomes. The confusion one layer below them is always magnified, burning valuable time, attention, and resources.
It’s common to observe a leadership team spend six months defining strategies and then devote only an hour in a townhall to explaining their choices to their direct reports. The question I find myself asking CEOs far too often: Do you really think a strategy that required months of executive team dialogue to create can be understood by senior leadership after an hourlong PowerPoint presentation? It’s magical thinking.
Without investing adequate time to discuss the why and what of strategy, you’re guaranteeing confusion when you get to the how of implementation. Ambiguity feels harmless. It is not.
The same holds true for individual goals, priorities, decision rights, and accountabilities; they too must be sharpened. No team will perform near its best if its members have different understandings or interpretations of the rules of the game and expected outcomes.
Vacuums form when incomplete information is ineffectively communicated, and we create them at our own peril. When there is space for the people around you to craft their own narrative about realities, expectations, priorities, responsibilities, and accountabilities, a vacuum is going to form—and performance will suffer.
When multiple interpretations of important information exist in a system, people will start pouring their fears into these information vacuums, investing too much time talking about their assumptions and concerns, too much energy reading the political tea leaves. That is not a recipe for focus, productivity, or collaboration. If you find yourself arguing over different interpretations of performance at the end of the year with a direct report, take the L (as my kids would say). You failed.
High performance requires:
In a fast-changing marketplace where it’s increasingly difficult to predict where things will stand a year out, leaders must fill the void with clarity. I used to tell leadership teams their job was to “make the complex simple.” Steve Hoffman, a brilliant biotech executive, pulled me aside after he heard me share that and said: “Bob, that’s kind of a dumb statement. By definition, you cannot make the complex simple. You can, however, make it clear.”
If you give someone six metrics to track their performance without clearly stating which two matter most, don’t be surprised when they optimize the wrong ones. Every conversation you have about performance—from setting expectations, to reviewing progress, to assessing outcomes—needs to be explicit, specific, and two-way, ensuring a shared understanding between the two of you.
Without clarity, performance conversations are theater.
When performance expectations are not fully articulated, you’re creating the conditions for underperformance. When performance gaps aren’t confronted as they happen, you’re guaranteeing it.
Effective performance management systems gather data, compare it to expectations, create a structured forum for feedback, and then dole out consequences in the form of pay, promotion, and responsibilities. The mechanics of performance management are fairly straightforward, and the system itself is rarely to blame for the lack of a performance culture. Instead, breakdowns happen in conversations between people.
As leaders, we lose the moment we pull our punches.
We tell ourselves all kinds of stories when we fail at the most foundational aspect of our leadership role—talking to the people who we are responsible to develop about their performance. We rationalize that we’re protecting the relationship, that we don’t want to hurt or demotivate someone. But in truth, we are protecting ourselves from the emotional discomfort that the difficult conversation prompts within us.
It’s a vicious loop. “Unspoken expectations are premeditated resentment,” wrote journalist and author Neil Strauss. In the early years of my marriage, it’s amazing how often I found myself harboring resentments about my wife Michelle for things she wasn’t doing. Never mind that I had never explicitly expressed my needs. I felt justified in my anger, regardless of her having no clue about my needs or expectations.
The giver of feedback often fails before the receiver does. Our courage fails by not speaking the truth to the underperformer. Our curiosity fails by not seeking to understand the source of the underperformance. Our integrity fails by not being explicit with the individual about the gap between expectations and performance. Our leadership fails because we’re not ensuring the person we’re responsible for has the real-time information to make the necessary adjustments to deliver on their work.
Candor is not cruelty. It is respect. As leaders, it is our responsibility to have adult conversations with underperforming individuals and teams—ensuring their clarity and alignment with expectations, holding up the mirror, helping them to address the issues that are addressable, and holding them accountable for their results. We often avoid speaking plainly to the people we manage through some misplaced sense of loyalty to our relationship. I don’t want to make them feel bad.
Loyalty is not making people feel good; it’s telling them the truth. Jack Welch used to argue that there is nothing crueler than failing to tell someone they are not succeeding in a role—because that failure often results in a 50-year-old executive being laid off into a cold job market, blindsided by feedback they should have received years earlier. If you truly care about someone, be candid early and often. When they still have a variety of options. When they can find a good job in an enterprise that better matches their capability and capacity. Avoiding the truth is not compassion. It is self-protection masquerading as kindness.
It’s important to remember that feedback should also cover the good stuff—it isn’t only about what needs to improve. Empowerment is both about giving authority and responsibility, as well as signaling that you believe in someone’s ability to get the job done. But that belief must be heard to be felt. If someone never hears what they’re doing well, it becomes much harder for them to accept the confidence you’re placing in them.
Empowerment isn’t a one-way transaction. The other person must be able to receive what you’re offering. High performance cultures depend on robust feedback loops where positive reflections are shared openly and in the moment. Culture can be anchored by values and rituals, but it is shaped by daily interactions.
Speaking openly and honestly is not reserved for formal reviews; it must be the norm in every interaction.
Effective leaders distinguish between great, good, and poor performance—and act accordingly. Rewards reflect results. Development opportunities reflect potential. Role assignments reflect capability. You are responsible for ensuring that, within your span of control, consequences are clear and connected to outcomes.
Too many leaders fail to attach effects to causes, especially when those effects are viewed as “negative.” We don’t insist on consistency in the application of consequences.
Where consequences are inconsistent or absent, standards erode quickly. Your high performers notice first—and when they notice, they disengage. Dick Notebaert, a US telecom CEO, used to say that everyone knows who really carries the water on a team and who does not. If underperformance is obvious yet consequences are opaque, once again, it’s time to look in the mirror. Your inaction is undermining culture and performance.
I hear way more leaders talk tough than be tough when it comes to holding people accountable. And I’m as guilty as anyone in taking too long to impose negative consequences on underperformance. This is because:
The problem is: avoiding consequences and differentiation in the name of harmony or to keep yourself emotionally safe creates resentment among the people you can least afford to anger. High performers become demotivated when they’re treated equally with people who aren’t delivering on their responsibilities.
Authority erodes quickly when expectations aren’t backed by action. Without clear boundaries, consistent and measured consequences, even well-intentioned guidance turns into background noise.
If you fail to act, you communicate a powerful message: high performance is optional.
Creating a high-performance culture starts with you and the expansion of your emotional courage. Are you able to feel discomfort and lean into the moment anyway? While this may be easy to intellectualize, it’s difficult for many of us to manifest.
Many CEOs I work with are deeply uncomfortable with conflict. Some are scarred by childhood experiences with an abusive parent, making any type of conflict between people distressing. Others simply grew up in a culture that didn’t place a premium on candor and accountability. If an executive hasn’t done their emotional work or grappled with those early-in-life experiences, conflict in the workplace can trigger old wounds and familiar anxieties.
Yet executive leadership is responsible for creating the conditions where constructive conflict can occur. I’ve witnessed several talented CEOs fail in their job because they still carried the avoidance mechanisms that were formed to help them survive their childhood. The wrong person—their 10-year-old self—was driving the bus.
If a leader cannot hold space for tension and constructive conflict, teams drift into politeness and false harmony. Without leaning into difficult conversations, standards soften. Without accountability, performance declines.
Leadership requires the courage of conviction: the ability to speak plainly, hold steady, and trust that truth delivered with respect ultimately strengthens both the individual and the enterprise. If you’re signing up to lead, make sure you’re expanding your emotional capacity for discomfort. Emotional maturity and courage are foundational to effective leadership: if your wounded child is in the driver’s seat, it will be very difficult for you to create the conditions for a high-performance culture.
While it starts with you, your top team will set the pace: their behavior will accelerate or inhibit the development of a performance culture. An organization cannot outperform its leadership. In fact, an organization reflects its leadership; if your top team is incapable of healthy, constructive conflict, there is zero chance that the people around you can deliver clarity, candor, and consequences.
So, a performance culture must start within your team. Ask yourself:
If the top team demonstrates clarity, candor, and consequences, the rest of the enterprise will follow. If the top team does not, no performance management system in the world can compensate.
The new world we’re entering will require intellectual and emotional agility as old patterns are disrupted. The strategy you sweated over last year may have to change on a dime; the team you assembled and developed thoughtfully over time may no longer be up to the task. Letting go of what used to work and embracing a learn-and-apply-as-we-go approach to leadership will require that we intentionally manage our own emotions.
The last half dozen years have been my most profound as a leader, applying the lessons of my emotional expansion as a human being to my day job. My wife Michelle and I have navigated a challenging and meaningful life together and the journey has dramatically expanded our emotional capacity. For us, the work has been centered on three things:
1. Understanding our emotional biographies—how our parents, family systems, generational wounds, and experiences shaped us emotionally and how it shows up in my work and relationships today.
2. Expanding our comprehension of what is going on inside us and the natural action/reaction ping-pong match going on between us as we navigate life together.
3. Expressing and facing our fears to increase our emotional courage. We’re learning to resist the urge to escape emotional discomfort through projection, rationalization, and transference.
Shaping a high-performance culture starts with expanding your emotional courage and translating that courage into visible actions that send clear signals about your values and expected behaviors. This creates the conditions for the others around you to do the same. It’s hard to do this work alone, so having a partner, spouse, colleague, therapist, or coach who engages in this with you is hugely helpful.
My own commitment this year is to lean more directly into the conversations I’d rather postpone—to choose clarity over comfort, candor over evasion, and standards over sentiment. Because in the end, culture is not what we declare. It’s what we tolerate and demonstrate.
Bob Marcus is a senior member of Russell Reynolds Associates’ Leadership Advisory practice. He is based in New York.
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