Leading Through Tension: The Strategic Sacrifices CPOs Must Make

Fifth Frame’s perspective on driving performance through people in investment-backed companies.

Despite today’s unpredictable economic and political landscape, progressive leaders are realising that hitting aggressive financial targets requires more than just squeezing value out of spreadsheets. This challenge is even sharper for investment-backed companies, including private equity, where longer ownership timelines mean that managing risk and making solid financial choices isn’t enough. Sustained growth relies heavily on people.

But, decision making in this environment is hard, and having more data hasn’t made it easier to manage competing priorities. If you reduce roles to save costs, how do you measure the lost expertise? If you simplify a process, how do you know if people are channelling the extra capacity into meaningful work? If you rely too heavily on AI without understanding daily workflows, how do you track the impact on employee well-being?

What We Hear From CPOs

Navigating these pressures at pace is demanding. In Fifth Frame’s work with CEOs and CPOs, the most common questions we hear are:

1. How do we balance short term cost cutting with long term growth?
   Headcount reduction can be a tempting way to increase margins rapidly. But if you’re not clear on critical capability, future needs and role design, removing positions can undermine productivity longer term. This challenge is amplified as organisations grapple with where and how to use AI (and we’ve seen this play out in the media – think CBA call centres).
2. How do we capture all the benefits of a deal?
   Similarly, acquisitions lift financial performance in the short term. Additional revenue and elimination of obvious duplication translates into instant growth. But genuine integration and sustainable efficiencies of scale take focussed effort – a single purpose, unique strategy, aligned culture, clear accountabilities and streamlined systems.
3. How do we keep our top talent?
   Investment-backed companies rightly focus on the top team – does the organisation have the leaders in place to deliver the expected results? But the CPOs we work with are looking much deeper into their organisations. To keep high performers, they fix operational messiness that disenfranchises talent at all levels, and explore ways to establish a performance culture without rewarding the wrong behaviours.
4. How can we connect investing in our people to tangible business outcomes?
   Whether data is sketchy or the CPO has robust metrics at their fingertips, our clients constantly struggle to use workforce measures to connect the Boardroom / Investors, Executive and the workforce. It’s not just about formal reporting. CPOs want to inject commerciality into every level of the People function. When TA fills a vacancy, do they blindly follow process or understand the impact of time-to-hire on team performance?    

Solving these challenges requires CPOs to embrace a tough reality: you can’t optimise everything at once. Success lies in making intentional, strategic sacrifices, and being transparent about what you’re giving up. When organisations fail to make these trade-offs, the consequences eventually show up in the data.

The Illusion Of Scale

We recently saw the cost of failing to make these intentional trade-offs with a PE-owned client preparing for sale. On paper, a rapid series of acquisitions had successfully lifted financial performance. In reality, they had optimised for short-term financial results while entirely overlooking people integration.

They asked us to work with their leaders to enable high performance. However, the quality of people’s day-to-day experience was deteriorating as (short term) financial performance improved. Individuals were increasingly frustrated as they tried to deliver aggressive targets using a patchwork of systems, values and ways of working, with no budget or time to fix them. Leaders did not understand the strategy, let alone agree with it. Without clear direction, each legacy business focussed on its own backyard. Potential efficiencies of scale had not been realised.

The solution was not “high performance”, it was pausing to align on strategy and get the operational basics right.

In summary: growth isn’t about doing everything at once. Sustainable performance is about having the courage to decide what to pause today, so you’re set up for success tomorrow.

Who we are

Fifth Frame is a specialist consultancy with the depth of big-firm experience and the care of a boutique team. We help leaders drive results by focusing on what matters most: people.

Our team brings deep expertise in psychology, coaching, behavioural science and human capital – combined with a practical, clear-eyed approach that helps leaders build momentum and make meaningful progress.

What we do

We work with CEOs, executives and people leaders across all industries and sectors. Our clients are ambitious and purpose-driven. They’re committed to building stronger organisations by investing in their people.

They trust us to help solve their most critical challenges – bringing clarity, care and deep expertise to every engagement. From defining purpose to designing operating models, we support every aspect of organisational performance with tailored solutions that create real, lasting impact.

Angela Harris, PARTNER

angela.harris@fifthframe.com.au

0431 932 199

Angela is an AICD graduate and people and performance strategist with over 20 years’ experience delivering strategic solutions that matter for organisations, shareholders, and communities. Angela’s philosophy of performance is grounded in her time working across consulting, industry and with high performing athletes and teams.  Her critical thinking, practical and empathetic style, enables her to partner with clients to drive purpose-led, authentic and sustainable change for their most important business problems.

Laura Applebee-Jones, PARTNER

laura.applebee-jones@fifthframe.com.au

+61 411 643 617

Laura is an AICD graduate and active board member with over 20 years of experience studying human behaviour, and empowering leaders to meet their potential. Laura applies her Masters of Coaching Psychology and behavioural science to solve complex leadership challenges. Laura is known for her warm and adaptable style, and her ability to cut through complexity to pinpoint the most critical points or opportunities for action.