CEOs Are Getting Ruthless About Worker Performance

(Bloomberg) — The way Unilever Plc Chief Executive Officer Fernando Fernandez starts every meeting at the consumer products maker says a lot about the mindset of corporate bosses who fear their companies have lost their edge.

“Before saying hello, I say: ‘Volume growth, positive mix, consistent growth margin expansion for profit growth in hard currency,’” the CEO told an industry analyst in a recorded appearance last year.

Fernandez acknowledged it’s a strange way to greet people, but it’s how he ensures employees understand what’s important: He wants results and he’s holding people accountable for them.

While hardly a new mantra in the business world, the approach marks a contrast from the corporate ethos of the previous decade, when labor was in short supply and leaders tried putting empathy and warmth out front while quietly wishing employees worked harder. Now, as the looming threat of artificial intelligence gives employers more leverage in an already sluggish white-collar job market, a growing chorus of CEOs in every major sector is saying the quiet part out loud, and frequently underscoring the point with layoffs.

“We will be ruthless in assessing our talent, our people,” Nestlé SA’s Philipp Navratil pledged to investors and analysts soon after he became CEO last year. At Citigroup Inc., CEO Jane Fraser reminded staff that they’re judged on results, not effort. Meta Platforms Inc. CEO Mark Zuckerberg advised employees in 2025 to “buckle up” for an “intense” year. 3M Co. CEO Bill Brown routinely uses the word “relentless” when discussing his company’s culture. Leaders at companies including Novo Nordisk A/S and HSBC Holdings Plc have been similarly blunt.

The subtext in every sector: No more rewarding mediocrity with raises and promotions and kombucha on tap, especially at companies where market share, earnings or stockholder returns have been lagging rivals. The focus now is on building “performance cultures,” where expectations of workers are dialed up, B-players risk getting managed out and executives lose patience with the usual bureaucratic strangleholds on efficiency.

“We want to become a company that works faster, that is more agile, that is bolder in its decision making. And part of the performance culture is obviously making sure that the ones that perform are the ones we keep in the company,” Nestlé’s Navratil told investors in October.

Job cuts — 16,000 in Nestlé’s case and 9,000 at Novo — are often part of the mix, sending a warning to those who remain. Sometimes the message isn’t subtle. When Meta cut 600 jobs from the company’s AI division in October, one of Zuckerberg’s lieutenants said each remaining employee would become “more load-bearing.” There will be more loads to bear at Meta, which last month announced it’s laying off 10% of its workers and leaving 6,000 open positions unfilled.

Along with axing jobs and promising to hold slackers to account, executives often seize the moment to set more ambitious financial targets. At Unilever, Fernandez established new sales goals and reworked bonus plans for managers to make them more dependent on results for specific business lines and less susceptible to swings in local currencies, eliminating a potential excuse for poor performance.

Across companies in the S&P 500 Index, executives used the phrase “performance culture” 633 times last year on earnings calls and in corporate documents, up from about 460, on average, across the previous four years. It’s become shorthand for business leaders to communicate to the market, and to employees, that they’re serious about improving results.

The culture shift is often ushered in by new CEOs. Frequently they’re company insiders, like HSBC’s Georges Elhedery, who have seen the company’s foibles in action and have a good sense of where potential can be found and who they count on to help them unlock it. “Having been in the bank 20 years, operating in a number of geographies and businesses and functions myself, I’ve built a lot of experience and a very large network of colleagues who have also been feeding their input and their concerns and their ideas,” Elhedery told Bloomberg in a December interview. “I was definitely ruthless about killing the complexity.”

A performance culture might be precipitated by competitive pressures or a flagging stock price. In some cases, though, the CEO just wants to raise the bar at a company that’s cruising along fine. With Banco Popular parent company Popular Inc. far outpacing benchmark stock indexes over the past five years, CEO Javier Ferrer, who joined the Puerto Rico-based bank in 2014 and became CEO in July, said his push for a performance culture is sometimes met with surprise by employees.

“People say, ‘Oh, we’re doing very well, so why change if we’re doing well?’” Ferrer said in a March interview. “Okay, so that’s a way of looking at the world. But I’d rather say, ‘We’re doing well, but wouldn’t it be great if we could do better?’”

Nespresso-izing Nestlé

At Nestlé, the world’s largest food maker, Navratil inherited bloated costs, slowing sales, years of share price declines and a staff reeling from the ouster of the previous CEO over an office romance. The Swiss company had long maintained a cushy culture where market share losses were accepted and workers were “rewarded for mediocre performance,” Navratil said in a video released by the company in October.

Navratil and other veterans of the Nespresso business always believed that they worked differently than the rest of Nestlé — faster, more creative, entrepreneurial — which allowed Nespresso to upend the coffee industry by offering barista-style beverages at home. Under Navratil’s leadership, Nespresso tripled investment in the US and succeeded in attracting younger customers.

Navratil now aims to inject the more intense, innovative culture of the coffee-pod business across the vast operations now under his control, which include 271,000 employees and 335 factories that make products including KitKat chocolate, Purina kibble and Maggi noodles.

“Nespresso is a metaphor for all the things we need to do for the overall company, and need to do faster,” he said in the video.

As the new boss tries to give the rest of Nestlé a jolt of Nespresso-style innovation, he is taking on a system where employees who didn’t meet individual targets were rarely dinged for it and full or nearly full bonus payouts were the norm. The old way relied on qualitative criteria and could be skewed by external factors, leaving many employees in the dark about how their performance was assessed, while those who performed poorly could easily find excuses, according to current and former Nestlé executives.

Now, those assigned the lowest ranking of “unsatisfactory” at review time stand to receive half of their potential bonus at best, and possibly zilch. Meanwhile, star employees will be eligible for a payout of as much as 150% of their bonus target, up from a previous limit of 130%. Widening the pay gap between haves and have-nots is a common tactic for performance-obsessed CEOs.

And how those targets get met won’t matter as much as it used to, Nestlé insiders say. Previously, conduct and comportment were considered as important as what the employee achieved, according to a person familiar with the changes. The message is clear, the person said: Just get the job done, and don’t worry as much about playing nice.

“I’m a bit competitive,” Navratil said in the video. “Nestlé needs to get some of that competitiveness back.”

While some Nestlé observers are pleased with the changes — after spending the day with Navratil, one analyst who spoke to Bloomberg concluded, “He’s a f—ing leader” — others see a tough road ahead. So far, Nestlé’s shares have underperformed the main Swiss Exchange index.

Navratil “is proposing to ‘Nespressoize’ Nestlé, and I am not sure the entire company is ready for that,” said Frédéric Fréry, a management professor at the Paris campus of ESCP Business School and an expert on the relationship between corporate culture and strategy. “To implement such a change, he may need to create a sense of urgency, something that is not very common in Nestlé’s mindset.”

But telling people to work faster or harder usually isn’t enough. Performance cultures can’t move from an ideal to reality without specific guidance on what to do, Fréry said.

“I’m always surprised when I hear a CEO say, ‘I’m going to change the culture,’” said Fréry. “It’s one of the hardest things a CEO can do.”

Mike Doustdar thinks he can do it at Novo Nordisk, where he’s trying to transform the Danish maker of Ozempic and Wegovy into a flatter, faster organization. The drugmaker had first-mover advantage in the $40 billion obesity drug market, but fierce competition from American rival Eli Lilly & Co., along with cheaper copycat versions of its drugs, has sent its shares down by more than a third over the past year.

Last August, the foundation that controls Novo Nordisk ousted the CEO and installed Doustdar, a 33-year company veteran and its first non-Dane leader, to regain lost ground. He quickly diagnosed the culture as sclerotic: “Why do we have to have five meetings? Why do we have to have three committees to make the decision?” he said at a November investor conference. In February, he told Bloomberg that staffers will be measured by “impact on patients, not by the number of slides in a meeting.”

The Iranian-born Doustdar has spent much of his career running international units far from Novo’s cozy Copenhagen headquarters, where employees often take most of the month of July off and regularly leave work by 4 p.m., according to people who have worked there. To those who joined from other companies, the culture often seemed bloated and stifling, according to a former executive. Decisions were traditionally reached via consensus, and disagreements were best kept to oneself, a trait some derisively called “Novo Nice.”

That’s now changing. “I can make a decision knowing that it could be wrong, but I make a decision,” Doustdar said in a recent interview. “I don’t need unanimous opinion.”

‘Like Elon Musk’

To speed things up, Doustdar has brought research and development back into a unified department after they were separated under his predecessor. The move tore down silos and resulted in less downtime between phases of a drug’s journey from the lab to market, Doustdar said. He also halved the ranks of senior vice presidents and called workers back to the office five days a week.

At a company where remote work had been embraced, the new mandate was jarring.

When some employees during a companywide meeting questioned the rationale of the return-to-office plan, Doustdar cited similar five-day policies at Amazon.com Inc. and Tesla Inc., according to two people who listened to the call and have since left the company. Another former employee said Doustdar is “trying to sound like Elon Musk.”

Doustdar has said he sees himself as a “warrior” who’s “playing to win,” and his battle plan includes recruiting non-Danes like American Jamey Millar and Hong Chow, a Chinese-born German national, into senior leadership positions. (Cleaning house is a common move for CEOs trying to instill performance cultures. “It’s easier to change the heads than to change what’s inside those heads,” Fréry said.)

As proof that his overhaul is working, Doustdar cited the company’s rapid launch of the Wegovy pill in the US, which beat Lilly to market by several months.

But it’s mostly been baptism by fire for Doustdar. Novo saw disappointing results from a next-generation weight-loss drug and warned sales this year will drop. Now the company faces mounting calls to diversify beyond diabetes and obesity — franchises that have defined it for three decades. Novo’s share price, which topped 400 kroner in January, has since retreated to 287.5 kroner and is now little changed from when Doustdar took over. The MSCI World Health Care Index, meanwhile, is up 10%.

The rank and file in Copenhagen, meanwhile, keep their heads down, wary of Doustdar’s repeated warnings to not talk to the media, according to a former staffer who heard such warnings before departing. A LinkedIn group for laid-off Novo employees has grown to nearly 4,000 members, who share job leads, advice and social support. One recently departed employee said she doesn’t recognize the company anymore — which might be just what Doustdar wants.

Getting Employee Buy-in

The long-term effects of performance cultures spreading across the corporate landscape aren’t yet known, but might be jarring. Employee mental health, which finally garnered attention from business leaders during the pandemic, could once again get short shrift. Those seeking to balance life and work will likely get squeezed out of career opportunities in favor of workers willing to give more and more.

“The real question,” said Ben Bryant, a professor of leadership and organization at Switzerland’s IMD Business School, “is what will be sacrificed in the interests of performance?”

At Popular, Ferrer tries to make the case with employees that the extra effort is worth it, he said. “But first you have to tell people: I expect more from you. I’m going to challenge you. I’m also here to support you. I believe in you, I believe in you. You can do it, but if you can’t get it done, there will be consequences.”

Ferrer, who took on his role in July, said some employees have embraced the urgency and others feel they were working hard enough already. But employees can be more receptive than one might think, he said. After changes in one key division caused an initial wave of anxiety, scores from the group on an employee-engagement survey went up. Ferrer’s read: The team was aware of its shortcomings and wanted to be held to a higher standard.

“There are instances where the employees are begging for changes,” Ferrer said. “They may say: ‘Finally, somebody listened to me, and heard me.’”

–With assistance from Fabienne Kinzelmann, Sanne Wass and Sonja Wind.

©2026 Bloomberg L.P.