Year two of a culture program tends to look like this: the survey scores have improved and the steering committee is reporting progress. The behaviour that prompted the program has barely shifted. Budget pressure, a deadline at risk, a manager choosing between stated values and the path of least resistance — the decision-making has not changed. Culture program accountability — the gap between what the program asks for and what the reward structures reward — is rarely where the diagnosis lands.
In Brief
- Three in four organisations globally run a culture program; most that stall have not changed their accountability, promotion or pay structures.
- A CEO or CPO in year two or three of a stalled program is dealing with a governance problem, not a program design problem.
- Aligning reward structures with stated values is the structural intervention the program refresh alone cannot deliver.
Most reviews at this stage land on the same diagnosis: the consultant framing was off, the values embedding did not go deep enough, senior sponsorship was inconsistent. That diagnosis produces a program refresh: new facilitators, revised values statements, another round of leadership workshops. What it rarely produces is an examination of the structures running alongside the culture program that have not changed. Pay, promotion and accountability still reward the behaviour the program is trying to change. While those structures remain in place, the culture program teaches people to say the right things and score well on the culture survey. The way work actually gets done stays the same.
What promotion rewards, people replicate
Three in four organisations globally are running some form of culture transformation program (McKinsey & Company, 2026). The same research identifies accountability structures, career progression criteria and incentive systems as the primary failure vectors when culture change stalls. People do what the organisation rewards, and the promotion decision teaches more about what the organisation actually values than any values statement does. A law firm that promotes on billing hours and asks for client service investment is running the same pattern.
A manager who delivers quarterly results by running decisions through informal networks rather than the agreed governance process gets promoted. The promotion decision records what was delivered. Informal networks outperform agreed processes when pressure is on. The culture program names one value; the promotion decision teaches another. In any contest between a stated value and a demonstrated consequence, the demonstrated consequence determines behaviour.
In most organisations, the people setting promotion criteria are applying frameworks established before the program began. The people designing incentive structures are optimising for the performance metrics they are measured against. The people processing performance reviews are applying the criteria they were given. Each decision is individually rational within the system it is embedded in. That system was not redesigned when the culture program started, and in most organisations it has not been redesigned in the two years since.
Improving survey scores and unchanged behaviour are both correct readings of the same organisation. The culture program runs successfully within its own frame: it changes language, improves sentiment and builds genuine commitment to the stated values at the level of belief. The reward structures run their own program in parallel. Promotion goes to the behaviour that delivers the result. Pay reflects the performance criterion that was set. Accountability is applied where it always was. The executive reviewing the survey results and the executive reviewing the promotion and compensation outcomes are reading two different programs running simultaneously in the same organisation.
Accountability sits outside the culture program
The CEO or CPO who sees this clearly understands that the culture program and the reward structures are in unresolved conflict; the conflict is structural rather than ideological. Senior leaders may fully believe in the transformation and model the stated values consistently. Their promotion decisions, performance assessments and incentive approvals, processed through the criteria frameworks they have inherited, may still be sending an incompatible signal. The program asks for one set of behaviours; the criteria reward another. Faced with those two signals, people make the rational choice.
Deloitte’s 2026 survey of more than 9,000 leaders across 89 countries consistently found that culture investment does not produce corresponding changes in measurable cultural outcomes (Deloitte, 2026). Each performance review cycle, each promotion decision, each incentive payment adds another year to the informal curriculum. All three run on unchanged criteria. By year three, the organisation has taught its people two things simultaneously: that the stated values are real and that the reward structures are realer. Executives who run culture programs to this point often describe the result as disengagement. The organisation has been teaching exactly what its governance framework specifies, and people have learned the lesson well.
In most organisations the culture program should continue: it shifts language, shared beliefs and stated priorities, and those shifts are real. The executive making structural changes to the reward structures needs the culture program running alongside. On its own, the program cannot change what the organisation rewards when a promotion decision is made or a performance review is processed. The question for the CEO or CPO is whether the accountability framework, the promotion criteria and the incentive structures have been examined for the signals they are sending. Those signals reach every person in the organisation who makes a career-relevant decision, every review cycle.
That examination tends to surface specific decisions within the executive’s authority to change. One: a promotion criterion that has not been updated to reflect the behaviour the program asks for. Another: a performance metric tied to an output the organisation has moved away from. A third: an accountability standard that applies to frontline staff but not to the senior leaders whose decisions are most observed.
Executives in year two or three of a stalled culture program are often told the program needs redesign. That assessment treats a governance problem as a communication problem. The program’s design may be sound. The accountability framework, the promotion criteria and the incentive payments running alongside it may be unchanged. Both can be true in the same organisation: the program design is sound, and the accountability framework has not been examined. A CEO or CPO who examines the reward structures through the same lens as the culture program’s results is asking the right question. It is a different question from the one the program refresh would have answered.
An organisation running a culture program alongside unchanged promotion, pay and accountability criteria teaches its people to speak one language and practise another. The executive who aligns the reward structures with the stated values changes what the organisation actually teaches.
Structural decisions only the executive makes
- A stalled culture program is not evidence of poor program design. It is evidence that the governance framework — accountability standards, promotion criteria and incentive structures — has not been reviewed for the signals it is sending.
- Promotion decisions, performance reviews and incentive payments are actively teaching the organisation what it rewards, every review cycle. When those signals contradict the stated values, people make the rational choice. By year three of a stalled program, the informal curriculum has run for three years alongside the formal one. The organisation has taught its people two things simultaneously: that the stated values are real and that the reward structures are realer. At that stage, executives often describe the result as disengagement.
- Examining the accountability framework, promotion criteria and incentive structures for signal alignment is a governance decision within the executive committee’s authority. It is the question a program refresh cannot answer.
An executive who wants that examination conducted independently — whether the accountability, promotion and pay structures are aligned with the culture program’s goals — is in the right position for a ZXM Diagnostic Engagement.
References
- Deloitte. (2026). Global human capital trends 2026. Deloitte Insights. https://www.deloitte.com/au/en/services/consulting/research/global-human-capital-trends.html
- McKinsey and Company. (2026). The state of organizations 2026. McKinsey and Company. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/the-state-of-organizations
