Performance at the crossroads: Restructure or Reset?

28 June 2023
Errol Amerasekera

At some point in time, life will throw us a curveball. It is one of the inevitable aspects of our human existence that none of us have guaranteed immunity from periods of turmoil and upheaval.

In business, in sport, and in the business of sport, one of these curveballs is when we have to lead through extended periods of underperformance – where the gap between expectations and our actual performance shifts from a minor crevice to a gaping chasm. Whilst success can be a potent panacea for all kinds of tribulations, the accumulation of weeks, months or even years of underperformance eventually reaches a threshold of unacceptability which brings organisations and teams to the crossroads of performance. At these crossroads the critical question is: Do we Restructure or do we Reset?

There is no right or wrong strategy at these crossroads. And I have radically oversimplified this process by giving the impression we have a binary decision, when in reality, a bit of a “Column A” and a bit of “Column B” may well provide the optimal strategy. But what is essential is that organisations, in their fervour to address flailing performance, are not repeating, and therefore reinforcing, the same patterns of thinking and behaving that contributed to that underperformance in the first place.

I fully understand the urge to do an immediate and radical restructure, particularly once that threshold of unacceptability is reached. When the pain of underperformance becomes so unbearable, it is human nature to seek relief from this discomfort by making wholesale changes. We sack the CEO or the coach, we restructure the senior management team or the Board, or we totally revamp the organisational strategy – these changes, we hope, will provide us with the “circuit breaker” we are in such urgent need of.

On the other hand, a reset involves stripping ourselves back to the barebones. Going back to a time when we felt connected, confident, and successful, and then recalibrating this as the new cultural “line in the sand”. But also simultaneously, deeply evaluating when and how we diverged so drastically from this approach to our performance. So, a reset is less about changing the structural, and more about a re-evaluation of the cultural.

Moving-on certain key personnel as part of a restructure may be warranted. But it is also the direction that is usually the costliest; the most likely to create reputational damage; and it also runs the risk of rupturing relationships with people who have been wonderful stewards of the organisation.

Despite these risks and the associated pain, rather than a cultural reset, organisations frequently defer to restructure as the solution to their performance challenges. This is because as part of a reset, we will usually come up against what feel like insurmountable “developmental sticking points”, or simply, we don’t know what we don’t know in terms of what is happening under the “cultural hood”. So, the unknowns of a cultural reset, both in terms of how to do it, as well as what we are potentially going to discover, sometimes feel far more daunting than the familiarity of the well-trodden path of the restructure – better the devil you know, if you will.

However, a cultural reset can provide a different kind of “circuit breaker”. Sometimes organisations and teams need something to jolt them out of the stupor of underperformance; to transform the stagnant energy within the organisation; and to reconnect them to an outcome that is deeper, perhaps even more compelling, than the revenue from the last quarter or the score from last week’s game. If this is what is indicated, then a cultural reset may well provide the best option at these crossroads.

Cultural reset programs can look like many things, but given there are so many unknowns about the process, here are three “ingredients” we consider essential to a successful reset program.

A watershed moment acknowledging the pain of underperformance

Underperforming is painful, excruciating even! Especially when individuals and teams have become accustomed to a certain degree of success, when we are confronted by these periods, it rocks the very foundations of our identity. We thought we had sufficient knowledge and skills. We thought we had the right personnel or playing list. We thought we had the best fit in terms of a CEO or a coach. We thought our strategy or our gameplan was solid. We thought we had prepared well and/or done enough in the preseason. And yet, in what feels like both a split second, and an eternity, all this is called into question.

As a result, underperforming forces us to confront our own inadequacies, our own failures, and even our own “ordinariness”. And out of this questioning will often emerge a narrative suggesting that we were perhaps deluded in the fervent belief of our exceptionalism. This is challenging for all of us, but particularly for senior executives and elite athletes whose identities have been constructed, almost by necessity, on a foundation of confidence and being exceptional, perhaps even “extraordinary”.

So it is natural, normal in fact, to have an emotional reaction to this. But the irony of the situation is that the accumulation of emotions in reaction to extended periods of underperformance, can create a vicious cycle which in turn perpetuates the underperformance itself.

Emotions have energy. Emotions have a certain “weight”. And emotions have a life of their own. And when, as coaches, executives or athletes, we are carrying them around, they can’t help but undermine confidence, slow down reaction times, diminish executive functioning, affect decision-making, and impair the resilience and self-belief needed for teams and organisations to self-correct out of these periods of underperformance. Whether we decide to do a restructure or a reset, it is the weight of these emotions, that we are seeking relief from, sometimes without even being fully conscious of this need. The urgent need to change something, to change anything, to find some kind of circuit breaker, is also on some level, the need to find relief from these weighty emotions.

Expressing the frustration, the anger, and the disappointment, and having them validated and witnessed is the first step – after all, these are all reasonable emotional responses to underperformance. But in terms of our emotions, these are also the more acceptable, more familiar responses. Frequently lying just beyond the borders of frustration and anger and disappointment, and slightly more taboo to acknowledge, let alone express, are also despondency, grief and utter despair.

To begin to process and therefore resolve these emotions, we can’t skirt around them, we have to go through them. And I don’t just mean dip our toe into them, but rather, dive into them headfirst. Resisting the agony, only prolongs the process.

When this can happen, especially at a collective level, there is a watershed moment. There is a sense of relief that what we have all been carrying around, potentially without even being fully aware of, can now finally be jettisoned. But in addition, there is an awareness of how these emotions have been both a contributing factor, as well as an outcome of our underperformance.

Conduct a ruthless cultural inventory

An essential part of a reset is understanding the cultural dynamics that have resulted in our underperformance. We cannot resolve a problem until we really, and I mean really, understand how we came to be here!

While many will agree success involves a degree of luck, I also think when it comes to extended periods of optimal performance, or conversely, underperformance, luck has very little to do with it. Evaluating our performance using the laws of “cause-and-effect” is a far more productive approach than an exploration conducted through the perspective of “luck” or factors that are beyond our control.

So in order for us to really understand the underlying and causative factors of our underperformance requires a ruthless cultural inventory. And the key word here is “ruthless”. A superficial cultural inventory will not cut it, particularly if we are aiming to correct a long-term trajectory of underperformance. Such an analysis, therefore, cannot skirt over the surface. And it absolutely cannot default to a set of habitual responses that have been constructed from a place of defensiveness and denial, rather than a genuine and deep curiosity to better understand what is happening.

A ruthless cultural inventory asks why, and then keeps asking why, and then asks why once again, until we get to the underlying, root causes of the problem. What are the underlying attitudes, or belief systems or narratives that have created and then perpetuated our underperformance? Where did they come from? And what, up till now, has prevented us from proactively, and vigorously addressing them?

Part of this inventory also acknowledges that sometimes unresolved aspects of an organisation’s history, continue to play out in the present, and in ways that are not supportive of optimal performance. For example, there may be undercurrents of expectation, or of entitlement, that have never been fully acknowledged, and therefore processed. The ruthlessness does not tolerate any deflection from the truth, until the true “nub” of the problem has been fully uncovered.

Apart from being an effective diagnostic process to better understand the causes of our underperformance, a cultural inventory is also a powerful cultural change initiative in and of itself. This is because such a process will start to model the behaviours and the cultural elements that up till now, may have been absent. Done ruthlessly, a cultural inventory requires us to ask the hard questions, and to keep asking them; to have the difficult conversations; and to make the difficult decisions. All of these elements, if not previously “baked in” to the culture as a set of norms, will have been significant contributing factors to our underperformance.

Think systemically and then upgrade “cultural operating systems”

All too often, during these times, teams and organisations look to their leaders. And yes, of course, leaders have to carry the weight and the responsibility of these challenging times, that is an essential aspect of their role. But if we get so consumed by the individuals, that it distracts us from a more systemic analysis of our organisation or team, it will make a more complete solution even more elusive.

The moment we place the burden of responsibility (more or less) solely on the shoulders of the Board, the CEO, or the Coach, we are minimising the impact of the environment – an environment that everybody has a hand in co-creating. Great organisations and teams have a deeply entrenched belief that the “cultural buck” stops at everyone. But the moment we see underperformance as solely the responsibility of individuals, even those in senior roles, we take a giant step away from cultivating a culture where the environment is everyone’s responsibility. We cannot have it both ways – where we work towards cultivating a culture of shared accountability, but then when things do not go as planned, we immediately look to see which individual is going to take the fall?

So often, these periods of underperformance come at a time where cultures reach “developmental sticking points”. This is because the cultural “operating system” we are using is becoming, or has already become, redundant. Imagine still using Windows 7, when the current version is Windows 11- some programs will still work, others might be a bit “clunky”, while others will be totally incompatible. Obviously, what is needed in this situation is for the operating system to be upgraded to a version that enables the programs we are utilising to perform optimally. We can think about culture in a very similar manner.

The cultural challenges and performance issues we encounter at these developmental sticking points shine a light, albeit painfully, on the areas where the existing cultural operating system requires upgrading. Upgrading cultural operating systems involves new ways of thinking about performance, and the behaviours and attitudes which need to be embedded in order to optimise it. Part of this process may also require supporting watershed moments acknowledging the pain of underperformance and doing a ruthless cultural inventory as per the previous two “ingredients”.

Psychological safety is the “meta” ingredient required for the other ingredients

All of the previous three ingredients for a reset program require a “cultural container” robust enough to safely contain such conversations and hold strong emotions. This requires a certain degree of psychological safety. The term psychological safety was coined by Harvard Business School Professor Amy Edmondson. She defines psychological safety as: A shared belief that the environment is conducive to personal risks. In the absence of a baseline level of psychological safety, these aspects of a reset program are unlikely to occur, or if they do occur, there is a risk they will produce further tears in the fabric of the culture.

Therefore, as part of the decision-making process at the crossroads of underperformance, needs to be an evaluation of psychological safety. If we believe that a strategy of restructure is genuinely the best option to address our challenges with underperformance, then absolutely, we should pursue that direction. However, defaulting to the restructure option, because we do not have the psychological safety required, or perhaps more importantly, the desire to “do the work” required to create sufficient levels of psychological safety, will most likely leave us destined to remain in the excruciating cycle of underperformance.