New research shows culture is the main engine for innovation and growth

Supplied image

According to the research, organizational success hinges on four core cultural competencies:

• High-performance habits: Driving consistent results.
  
• Productive relationships: Fostering collaboration.
  
• Healthy communication: Ensuring transparency and clarity.
  
• Influential leadership: Guiding the organisation’s future.

Together, these pillars determine how effectively a business can deliver immediate results while remaining agile enough to build for the future.

Crucially, the impact of culture is even more pronounced when it comes to innovation. The study found that these combined competencies account for 53% of an organisation’s ability to innovate, compared to 38% of its ability to execute, reinforcing the idea that culture plays a defining role in how organisations adapt and evolve.

Connection between culture and performance

While each competency contributes to performance, with high-performance habits explaining 38% of performance outcomes; productive relationships 34%, influential leadership 32%, and healthy communication 8%, the research makes it clear that their real influence lies in how they work together.

“Culture is often treated as a soft issue, while performance is seen as a hard one,” says Heléne Vermaak, director at The Human Edge. “This research shows they are deeply connected. The behaviours people practise every day have measurable consequences for both execution and innovation.”

That connection becomes even clearer when comparing high-and low-performing organisations. Those with strong capability across all four areas reported 47% higher overall performance, alongside 48% stronger execution and 45% greater innovation outcomes, a gap that points to culture as a meaningful competitive advantage rather than a secondary consideration.

At a behavioural level, the study highlights a consistent pattern: performance is driven less by grand strategy and more by what people do, repeatedly and reliably, in their day-to-day work. Five behaviours emerged as the strongest predictors of performance:

• Building trust and a shared sense of purpose
  
• Keeping commitments, or renegotiating them early
  
• Modelling the behaviours leaders expect from others
  
• Working effectively across differences
  
• Giving others the benefit of the doubt

Vermaak says, “Together, these behaviours signal a shift away from traditional, hierarchical leadership towards a more trust-based and behaviour-led approach to performance.”

Importance of how vs where

The findings also challenge one of the most persistent debates in the modern workplace. Despite ongoing focus on hybrid versus in-office models, the data suggests that where people work is far less important than how they work together.

Respondents working in hybrid and in-person environments reported broadly similar performance levels, with leadership behaviour, and not location, emerging as the more significant differentiator.

“Performance is not primarily a location issue. It is a leadership and culture issue,” adds Vermaak. “Organisations don’t become high-performing because people share a building, but rather because leaders create the right conditions for execution and innovation.”

Ultimately, the research points to a shift in how organisations should think about culture, not as a set of values or aspirations, but as a practical operating system that shapes behaviour, accountability and results.

In an environment where adaptability is critical, the takeaway is clear: Culture is not separate from performance; it is one of its strongest predictors.