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Core culture: the engine that powers iconic companies

Core culture is your company’s engine; it needs periodic tune-ups to perform well.

What does your company really believe?

What are your intrinsic, deep down, backs-against-the-wall, fundamentally-held values?

Core culture is made up of those; it’s the fuel that drives your company down the road to success and pushes it through rough terrain.

Understanding and making core culture work involves looking within. Just as you can look within as a person, you can do it as an organization too.

It might sound a little woo-woo, but it's actually a crucial way of understanding what drives your company. Making tactical surface-level decisions will keep you busy during everyday work, but if they're not aligned with your core culture, they won't help you achieve your goals.

So let's go deep underground, right down into the engine room of your organization, and figure out what your core culture really is.

What is core culture?

Core culture is essentially the soul of the company. The stuff right at the beating heart of the organization; the values and beliefs that really make it a unique entity.

It's one half of what you'd call 'organizational culture' - something broadly understood to mean the collective behavior of a group and the beliefs behind their actions.

The other half of this is 'observable culture'. Observable culture is that which faces outwards to the world; it's more of a communication channel that's made up of branding, visual design, product lines, mission statements and office design.

There can be some crossover; during a hiring interview, for example, you might talk about how your team behaves in accordance to your core cultural values . They're not a secret, but core culture is defined through behavior more than statements.

Core culture is an inward-facing concept, then, and it starts working for you under a bit of careful examination. 

How is core culture different to company culture?

There are some overlaps, but it's important to understand the distinction.

When we talk about 'company culture', it generally refers to what we defined as 'organizational culture' above - an all-encompassing idea involving vision, behavior, and outward communication.

Company culture can consist of more tangible assets - sure, it might manifest through open collaboration and honest discussion, but office beer fridges and ping-pong tables also contribute to it.

Core culture has deeper roots, being more strategic, ideological and intrinsic to the organization.

Company success starts with core culture

Ray Dalio, investor and author of Principles: Life & Work, built Bridgewater Associates into one of the world's most successful hedge funds. He believes strongly in the power of building culture by choosing the right people with the right values. The core culture of Bridgewater is distinct and understandable:

"Great cultures bring problems and disagreements to the surface and solve them well, and they love imagining and building great things that haven't been built before. Doing that sustains their evolution. In our case, we do that by having an idea meritocracy that strives for meaningful work and meaningful relationships through radical truth and radical transparency."

Dalio rates building Bridgewater's core culture as even more instrumental in its success than its skill in economics and investing. This has led to it managing over $150b in assets and becoming a case study in corporate culture around the world.

Core culture drives positive outcomes for companies in different ways, depending on what values it's made up of.

There's a good example in HBR's 'Leader's Guide to Corporate Culture'. A US retailer held stellar customer service as one of its core values. A single rule provided the framework for cultivating this value: 'do right by the customer'.

Employees were given a certain amount of autonomy in their decision-making, and were encouraged to understand the customer's perspective by engaging them and going beyond their expectations. The specifics of each interaction weren't important in most circumstances. But after utilizing this creed for a number of customer queries, it soon percolated into the subconscious of each employee. Customer delight was a core culture concept for the company.

The results: "a variety of positive outcomes for the company, including robust growth and international expansion, numerous customer service awards, and frequent appearances on lists of the best companies to work for."

While a good portion of core culture is conceptual, it shouldn't be ignored as something that comes around organically. It does need to be talked about to be of use. Let's have a look at how you can really identify the building blocks of your organization's core culture. That way, you can make sure you're headed in the right direction.

Identifying the values that make up your core culture

One of the most important parts of this process is avoiding lapsing into buzzwords. Or if a business buzzword is crucial to your business identity, you can't just lean on it. You have to explore it, understand it, and communicate why it's important.

Let's take 'creativity' as an example. It's a concept adjacent to 'innovation' - pretty much every company in every market needs to innovate and create stuff, because the world doesn't stand still. What works now won't work the same in five or ten years, no matter if you build iPhone apps or plumbing systems.

So you can't just say 'our company is creative' and hope every employee acts creatively. You have to dig deeper.

  • How are you creative?
  • Why are you creative?
  • What does creativity mean in your context? Is it designing new widgets every three years, or is it completely disrupting the way modern logistics chains operate?

Is your creativity based on visual design, industrial efficiency, organizational make-up, research methodology, multi-disciplinary experimentation, or marketing to inflate customer demand and brand strength?

There are so many ways to define creativity and innovation, you simply have to define what it means to you or you'll never have a strong enough foothold to become a truly creative organization.

Once you've identified answers to these, you're better equipped to make creativity a part of your corporate ethos. You'll be able to take these values and use them to build processes, train new hires, identify opportunities, and so on.

This applies to any value you aspire to hold as a company: customer-centric, disruptive, reliable, honest, simple, great value, acting with integrity. Each one needs a deep understanding by the owners, the board, the management, and the employees. Otherwise it's just another clichéd ad slogan.

Employees must understand core culture and how it applies to them

The people that execute your strategic instructions are the ones that move the needle. If they're acting with your core culture in mind, they're going to have a sense of direction and competence that makes them better at their jobs. So how do they get it in mind in the first place?

There are two ways that core culture makes its way into the heads of your team members. The first is direct: being informed of it. This comes through training, documentation and conversation. It keeps cultural practices top of mind and reminds them of how things should work in day-to-day working life.

The second is through observation. This means they see what's going on, understand it, and begin to mimic that behavior.

Observation, over time, creates operating frameworks within the subconscious of your employees, meaning they behave automatically in accordance with your core culture.

So if they see you standing up for someone who's being belittled in a meeting, that might remind them to act virtuously on someone else's behalf on another occasion. But seeing things like this happen again and again over time, from multiple different people, causes an exposure effect. It cements in their mind that acting altruistically in the face of injustice is the 'default' mode of operation in this organization.

Core culture itself is this 'subconscious' of the company; built through repeated actions over time that become automatic. Individual interventions have less impact on core culture than repeated behavior over time, so it's important to choose the right people and get them on board.

Core culture can be fun, too

It's tempting to think that most business concepts apply to established corporates. But core culture is something every business owner should understand; from tiny startups to disruptive pioneers, to worldwide conglomerates and mom-and-pop retail operations.

You don't need to make it an academic exercise. If you're a fun, informal company that prides itself on doing things differently - that's your core culture. Identify it, explore what it means to you and why it's important to your success, and make sure everyone in the company knows about it.

Embedding a sense of energy and vibrance to your organization (if that's what's important to you) needs to be done as early as possible by those at the top. The bigger you get, the harder it becomes to change course.

Core culture is made up of purpose - the reason why your company exists - and principles - the philosophies that guide you; or "how we do things round here". If those are hardwired into your company's subconscious, your company will know where it wants to go and how to get there. The people you hire and the work you do will start to reflect these values. And they can be as colorful and fun as you want them to be. 

Schedule a free demo to learn how you can measure, map and improve your company’s core culture with F4S.

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