WCM realized its intensely caring culture risked becoming too soft, potentially enabling underperformance. They consciously implemented a practice of 'truth-telling'—having direct, difficult conversations about performance—as a necessary counterbalance to maintain high standards and ensure accountability.

Identifying a company's stated values is insufficient. WCM's research evolved to analyze the social mechanisms that reinforce desired behaviors, turning values into a "cult." They found that many companies espouse the same behaviors, but only the best have the rituals and systems to make them stick.

WCM assesses both its own culture and that of potential investments by looking for an 'absence of fear,' a concept from Whole Foods founder John Mackey. This intangible quality indicates a high level of trust and psychological safety, which they believe is a prerequisite for high performance and innovation.

Culture isn't about values on a wall; it's about daily habits enforced by memorable rules. Ben Horowitz argues that rules need "shock value," like A16z's policy of fining partners $10 per minute for being late to a founder meeting. This makes the underlying principle—respect—unforgettable and non-negotiable.

Focusing on "bad to great" is more effective than "good to great" when scaling. Bad behaviors and destructive norms are so corrosive that they make it impossible for excellence to take root. A leader's first job in a turnaround or scaling effort is to eliminate the bad—like dirty bathrooms or incompetent employees—before trying to implement the good.

Instead of aiming for vague outcomes like "empowerment," start by defining the specific, observable behaviors you want to see. For example, what does "being data-driven" actually look like day-to-day? This focus allows you to diagnose and remove concrete barriers related to competency, accessibility, or social reinforcement.

Unlike startups, institutions like CPPIB that must endure for 75+ years need to be the "exact opposite of a founder culture." The focus is on institutionalizing processes so the organization operates independently of any single individual, ensuring stability and succession over many generations of leadership.

WCM learned from other firms' failures that hiring a dedicated HR head can be a cultural red flag. It often leads to leaders outsourcing critical responsibilities like difficult conversations, creating bureaucracy and a harmful distance between leadership and employees.

To truly build a people-first culture, give the head of HR (rebranded as 'Chief Heart Officer' to change perception) more political clout and decision-making power than the Chief Financial Officer. This organizational structure ensures that employee retention and happiness are prioritized over pure financial metrics, leading to long-term stability and success.