What does an entrepreneur CEO or a publicly traded company CEO really own? Usually their ownership is represented in the form of company stock.  So what does that stock really represent?  Is it the value of a product, process, real estate, patents, or even talent?  The right answer will vary from company to company, but unfortunately the frequently forgotten yet major component of a company’s value is its culture.

So, why is culture a crucial component of a company’s valuation? Because in reality, the culture is one of the few things a company can actually own or keep.  Technology, formulas, and processes can be copied.  Patents expire and generics abound.  Real estate can be sold and a company can go totally virtual.

But, but what about the funds that copy the Warren Buffett Way, consultants that copy Bain, startups that copy Google, and the phone companies that try and copy the iPhone from Apple?!  Yes, there are plenty of copycats out there, but they have a copycat culture of their own.  Even if a young entrepreneur is a genuine admirer of Google and emulates that company in every way, she will still have her own unique startup-band society.

Culture cannot be copied. But it’s not just about emulation or the competition.  It’s about the consumer’s desire to belong to a specific tribe.  While tribes can overlap and exist within a larger society, they are still distinct.  Being a Harley owner is different from being a Kawasaki owner.  The iPhone owner is different from the Samsung Memoir owner, perhaps it’s Mac fans vs feature fans.

Finally, there are two questions left: what does a CEO do to create or repair a cultural identity? And, how in the world do you valuate culture?  The answer is…good questions, go figure it out!  As for myself, I say mimicry will only help you survive, not thrive.  If copying is the right strategy for some folks, accept the fact that you’ll never be exactly the same as your competition.  Accentuate what makes you unique. As for performing a culture valuation, hiring IDEO, or getting or becoming a Chief Culture Officer are good ideas.  Just as a life is priceless so is a culture, make sure you know how to read and adapt to the vital signs!

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