You Don't Build Culture by Writing Values

When I started my first company in 2007, immediately after college, I knew very little about how businesses were actually built. It was a recruitment company, and I still remember sitting down one day to prepare a business profile that I could send to companies while pitching our recruitment services. I had never created a company profile before, so like most people would do, I went on the internet and started looking at profiles of other companies.

As I went through them, I noticed that almost every company profile had three things in common: mission, vision and values. At that time, I thought these must be very important. If every serious company had them, then obviously my company also needed them. So I started picking ideas from the profiles I liked and created my own version of mission, vision and values.

When it came to values, there were some words that appeared almost everywhere. Integrity, excellence, customer first, ownership, innovation and a few more. They all sounded good, so naturally I picked some of the best ones and put them into our company profile. At that time, I genuinely thought I had done the right thing. I had a professional-looking company profile and all the words that a good company was supposed to have.

Today, almost twenty years later, I realise that I had absolutely no connection with most of those words. I had picked someone else's mission, someone else's vision and, probably the biggest mistake, someone else's values. I had no real understanding of what those values meant in the way I wanted to run my company. They were simply good words that I had seen successful companies using.

I don't think I was unusual in doing this. A lot of first-time founders probably go through something similar. When you are starting a company, there are so many things you don't understand yet. You look at other businesses and try to learn from them. Somewhere during that process, mission, vision and values become things you feel you are supposed to have, so you create them before you have actually understood what they mean.

My understanding of culture changed much later. Between 2007 and 2022, I had the opportunity to work in some very good companies and experience different cultures as an employee. During my Executive MBA, I also got a better academic lens to understand some of these things. But I feel the real learning started when I was again running my own company in 2022 and had to think about what kind of organisation I actually wanted to build.

This time, I was able to think much more clearly about the purpose of the company and the values that should come from that purpose. But even then, defining them on paper was the easy part. The difficult part was seeing whether the company actually behaved according to those values when real situations came up.

That is where my understanding of culture changed.

Earlier, I thought culture was something you defined and then communicated to employees. Today, I see it very differently. Culture is created through the way people inside the organisation behave every day, especially in situations where there is no clear rule telling them exactly what to do. It comes from the decisions founders make, the behaviour managers encourage, what employees see happening around them and, very importantly, what the company chooses to tolerate.

This is why simply writing values like integrity, ownership or customer first does very little on its own. Almost every company can write those words. The more important question is what happens after those words have been written.

Suppose one of your managers is an excellent performer. He brings a lot of business to the company, consistently achieves his targets and is considered important because of the revenue he generates. One day, in front of everyone, he abuses or badly misbehaves with someone in his team.

Now the values on your office wall don't matter much. What the leader does next matters.

If the founder or senior leadership ignores the incident because this manager brings a lot of business, everyone around him learns something. Nobody needs to announce it in a meeting. The message is already clear: if you are a strong enough performer, certain behaviour will be tolerated.

A founder may think he has made a practical business decision. He may tell himself that the manager is important for revenue and that the issue can be handled quietly later. But people inside the company are watching the same situation from a completely different angle. They are trying to understand what is acceptable in this organisation.

You may have "Respect" written as one of your values, but if somebody who delivers numbers is allowed to disrespect people, then employees will believe the behaviour they saw, not the word they read during induction.

This is why I feel culture is created as much by what leaders tolerate as by what they encourage.

There is another, much smaller example from my own experience which helped me understand this.

In my office, I always treated the office boy with dignity. I never conducted a training session telling everyone how an office boy should be treated. There was never a slide in induction saying that you must speak respectfully to him. I simply treated him the way I felt any person doing his job should be treated.

If I needed something, I would ask him normally. His job may have been to bring something or take care of certain office work, just like a software developer's job is to write code or somebody in finance has a different responsibility. The nature of the work was different, but I never felt that the person doing it deserved less dignity because of his job title.

Over time, I noticed that others in the office behaved in a similar way. Nobody had been instructed to do it. They had simply seen how people were treated around them and that became normal behaviour inside the office.

This did not mean performance was ignored. I have replaced office boys because of performance issues when the work was not being done properly. But even those exits could happen with dignity. Respecting someone does not mean you cannot hold that person accountable for his job. These are two different things.

For me, this small example explains culture better than a lot of presentations on values. People observe how things are done around them and slowly start behaving in a similar way. They notice how the founder speaks to people. They notice what happens when someone makes a mistake. They notice whether a senior employee can behave badly without consequences. They notice who gets promoted, who gets rewarded and what kind of behaviour helps someone grow inside the company.

All of this keeps teaching people what the company really values.

We often expect induction programmes to do a job they were never capable of doing. A new employee joins and we take him through presentations about the company, its mission, purpose, values and culture. We explain everything properly and somewhere we expect that the person should now understand our culture and start behaving accordingly.

I don't think human beings work like that.

You are not installing software into a machine where you configure something once and it starts operating exactly according to those settings. People understand an organisation by experiencing it. They watch what happens around them and keep adjusting their own behaviour based on those experiences.

You can tell a new employee during induction that the company encourages people to speak openly. But if, in his first month, he sees someone being shut down for disagreeing with a senior person, he will understand the real rule very quickly. You can tell him that the company believes in ownership, but if every small independent decision is questioned by the manager, he will soon start asking for approval before doing anything.

This is why culture cannot really be created in a presentation. The presentation can explain what the organisation wants to become, but whether that becomes culture depends on what happens after the presentation is over.

I also don't think free meals, Friday celebrations, team outings or weekend activities are culture. These things can make the workplace enjoyable and there is nothing wrong with them. Employees may genuinely appreciate them. But they don't tell you how the organisation behaves when there is pressure, conflict or a difficult decision.

For me, culture is much closer to the DNA of the organisation. It is present in hundreds of small decisions being taken every day, many of which the founder will never even know about.

This is also where I see the connection between purpose, values and culture.

If the founder has clarity about why the business exists, the values should come from that purpose. Those values then start influencing decisions. When founders and managers repeatedly take decisions in line with them, people inside the organisation start seeing a pattern. Over time, employees themselves begin behaving in similar ways because that is how they have understood the company works.

The culture is not being created because somebody keeps repeating the values. It is being created because people keep seeing those values in action.

This is also why copying values from another company rarely works. Integrity may be important for almost every organisation, but what does integrity actually mean in your company? What decision will you take differently because integrity is one of your values? What will you refuse to tolerate? What will you reward? What happens when following that value costs you money?

Until you can answer questions like these, the word itself does not tell employees very much.

The same applies to ownership. Almost every company wants employees to take ownership, but what happens when an employee takes a decision on his own and it goes wrong? Does the manager help him understand the mistake, or does the organisation punish him so badly that he never takes an independent decision again? The answer to that question is probably doing more to create a culture of ownership than any training programme on ownership.

This is why I have started looking at culture through very practical questions. Who gets promoted in the organisation? What behaviour gets rewarded? What behaviour is tolerated because the person delivers good numbers? What happens when someone makes an honest mistake? How does a manager treat the most junior employee in the team? How does the founder behave when the company is under pressure?

The answers to these questions tell you what the culture is already becoming.

I made the mistake in 2007 of thinking that I needed values because every good company profile had values. It took me many years of working in companies, studying businesses and again becoming a founder to understand that writing the words was probably the least important part.

The real work starts after you have written them.

If the purpose of the company is clear and the values genuinely come from that purpose, then the founder has to start living them. Managers have to carry the same thinking into their teams, and employees have to repeatedly see that the organisation takes those values seriously even when it is inconvenient.

If that keeps happening over time, you may not need to keep telling people what the culture is. They will already know because they experience it every day.