How to discover your company’s DNA

The term “company DNA” is sometimes used as shorthand for an organization’s culture and strategy — a metaphor for what makes it unique. But there may be more to the comparison. Understanding your company’s DNA can help you know what you can do, and how to be agile in a changing world.

DNA contains the instructions that an organism needs to develop and function. Our understanding of it might lead to similar insights about organizations.

For example, DNA is formed at conception. Is that the case for companies too? Is a company’s uniqueness set by the founders’ vision and values? DNA also doesn’t change over the life of an organism. Is that true for a company? If so, does it limit the degree to which it can adapt and evolve? Finally, DNA expresses itself differently based on its environment. Might a company have the same DNA forever but be able to innovate by expressing that DNA through new business models, organizational designs and offerings?

Consider Pokémon Go, a viral sensation and the most popular smartphone game ever. The founder of Pokémon, Satoshi Tajiri, grew up outside Tokyo. His childhood hobby was collecting insects. As urban expansion paved over fields and forests, Tajiri’s insects disappeared. When Tajiri developed an interest in video games, he saw a way to recreate his childhood experience of catching elusive creatures. For years, this vision was played out on desktop computers. With Pokémon Go, Tajiri’s original vision came to life in the environment it was conceived in. You might say that Pokémon’s company DNA is “collecting creatures.”

Interestingly, Pokémon Go was produced by a company called Niantic, whose founder created the company that became Google Earth. The DNA of Niantic might be described as “mapping places.” Put “collecting creatures” and “mapping places” together, and you have Pokémon Go.

If we continue with the idea that DNA is set at a company’s conception, does it limit the ability to change? The next examples suggest that a company must stay true to its DNA, but has room to express that DNA in new ways.

Consider the paths of two competitors: IBM and HP. Both struggled in the 1990s, but one re-embraced its founder’s vision and values, while the other rejected them.

The leader who defined IBM was Thomas J. Watson. His mantra was “think,” and it was a way of doing business. Watson’s vision was to use thinking to create machines, and to use machines to enable thinking.

IBM had a near-death experience in the early 1990s because of a series of bad business decisions. But in the wake of that crisis, IBM returned to its DNA. IBM’s game-changing laptop was the ThinkPad. One of its most successful marketing campaigns was “Let’s Build a Smarter Planet.” And its current focus is on cognitive business, led by machine-learning technology called Watson.

IBM’s competitor, HP, was founded in 1939 by Bill Hewlett and Dave Packard. They advocated the “HP Way,” one of the first examples of empowering employees, decentralizing the organization and tying pay to performance.

Starting in the late 1990s, a series of CEOs saw the HP Way as a liability. They abandoned it and replaced decentralized entrepreneurship with centralized control. Only recently with CEO Meg Whitman has HP begun to re-embrace the HP Way, now re-expressed as “The HP Way Now.”

This suggests that there may be a limit on corporate malleability. Strategy must be aligned with the company’s DNA, as well as the marketplace.

At first glance, this seems to pose a problem. In today’s markets, it’s more important than ever to adapt and evolve. If companies are limited by their DNA, is it possible to stay competitive?

In biology, there is a difference between genotype and phenotype. The genotype is the underlying DNA for a physical trait, also called a phenotype. Sometimes the genotype determines the phenotype regardless of the environment, as with hair color. But sometimes there is a range of how the DNA can be expressed — what’s called “phenotypic plasticity.” For example, when newts sense the presence of predators as they grow, they develop bigger heads and tails to increase their chance of survival.

In business, some companies display this plasticity. Pokémon Go is an example of expressing the DNA of “collecting” in a new environment on the smartphone. Similarly, IBM has gone through multiple iterations of taking the DNA of “thinking machines” and expressing it across mainframes, PCs, the cloud and artificial intelligence.

How do you discover your company’s DNA? Dig through company archives, talk to early employees, and read the corporate history. Look to the original vision and the values of the founders. How did they see the world? What problem did they want to solve?

Once you’ve found the DNA, map it to the company’s past and current business. As you consider strategies, think about how you can express your DNA in new ways that create unique value and sustainable advantage.