Yarak: culture in the age of AI

As with any investment, your capital is at risk.

In falconry, a bird in yarak is in its prime condition. Its feathers are tight, and its eyes blaze. It’s hungry but not starving. It’s alert to every twitch of the landscape.

In short, it is in a fragile state of perfect readiness. The falconer cannot command it, only create the conditions for it to appear.

That is what great company cultures feel like. At its best, it holds an organisation in a posture of readiness – taut, alive, able to move decisively when opportunity presents itself.

So what happens in the age of artificial intelligence? If knowledge can be compressed and decisions pushed toward algorithms, does culture still matter? Or worse, does it become irrelevant – a luxury in a world of automated execution?

The answer is the opposite. AI does not negate the importance of culture. It intensifies it. Models expand the set of viable options, but they don’t tell you which to pursue. They multiply choice, but they cannot anchor purpose. The scarce resource becomes the ability to decide and execute at speed without losing the plot.

Think of the business environment as a shifting landscape. Firms can aim for the illusion of a fixed peak: a dominant product, a proven model, the safety of scale. But the terrain underneath their feet is constantly shifting.

Company fitness is relative, dynamic, shaped by what others in the field are doing. A company that looks well-positioned in isolation can suddenly look fragile when the timeframe widens. Adaptability, not stability, is the true foundation of resilience.

Scaffolding: connecting belief to behaviour

How do great companies practise adaptability? One way to see it is through the metaphor of jumps:

Most companies default to short jumps because they feel safer. The exceptional ones deliberately rehearse all three so that leaping remains a lived capability, not a corporate slogan.

Shopify, the ecommerce platform, illustrates this well. Its ‘merchant-first’ ethos allowed it to move from storefront software into payments, logistics and AI-powered tools. Each leap was different in size, but all were consistent with the same cultural foundation: empowering entrepreneurs. The combination of adaptability and fidelity to purpose is what cultural readiness looks like.

But adaptability alone is not enough. Without coherence, it becomes chaos.

This is where scaffolding comes in. By scaffolding, I mean the structures, norms and incentives that connect a company’s deepest beliefs with its everyday behaviour. 

Because it changes slowly, scaffolding is also a profound constraint. It defines both what a company can and cannot do. Leaders cannot dictate precisely how a culture manifests, but they can shape the scaffolding: building, maintaining and, when necessary, dismantling the architecture that enables adaptation.

AI may put this scaffolding under strain. By lowering the cost of experimentation, it multiplies viable choices. The company can test more products and explore more customer groups. The bottleneck shifts from invention to disciplined delivery.

Cultures that thrive under these conditions are the ones that can compare, iterate and shut down weak ideas quickly – without organisational trauma. They are places where trust flows across teams, where decision-making is pushed to the edges, where central control is light, but context is strong.

Increased speed means that AI can act like a truth serum. It can expose the gap between slogans and systems. A company can claim to be ‘customer-first’ or ‘long-term’, but the reality shows up in its plumbing: where decisions actually sit, how incentives are structured, the firm’s retirement of obsolete processes that no longer serve its mission.

Again, Shopify offers an example. At a lesser company, its rallying cry – ‘arming the rebels’ – could have amounted to little more than marketing. But Shopify’s capital allocation has demonstrated its willingness to sacrifice near-term margins to improve the ‘rebel’ experience. That discipline reveals substance. The speed at which AI is forcing change within organisations makes such authenticity more visible.

Humans in the loop

The emergence of AI reframes human interactions, too. As AI handles more repeatable work, judgment moves centre stage. Data will proliferate, but taste still matters. The best teams will use data to inform, not replace, product judgement – protecting originality in a world where imitation is cheap and metrics are easily gamed.

Trust becomes a speed multiplier. Clear scaffolding enables unusually frank feedback and context-rich communication, accelerating progress rather than creating friction. And it will become increasingly critical that managers deliberately cultivate a sense of belonging.

Artificial intelligence is likely to lead to greater atomisation of work – in other words, tasks will be broken down into smaller and smaller pieces, with some performed by humans and others by AI. As a result, it will become more important how companies stitch these parts together. Shared language, rituals and a sense of purpose must provide the social glue that AI will struggle to simulate.

That is why we place effective culture at the heart of our investment philosophy. We believe that culture – and our analysis of it – is a critical factor in navigating change and delivering long-term returns.

Culture is not a cosmetic layer. It is the deep architecture that determines how organisations respond when the environment shifts. It is slow to build but excels when able to act decisively in moments of change. As an independent private partnership, Baillie Gifford doesn’t have outside shareholders or external financial obligations. That frees us from short-term distractions, helping us retain our edge in recognising cultural strength and backing it for the long term.

Our effectiveness test is simple:

Aligned motivation × Scale of ambition × Ability to execute

To expand on this, using our portfolio companies as examples:

• Aligned motivation: the use of incentives that encourge management and employees to live up to the firm’s stated values. 
  Eg sleep apnoea specialist Inspire Medical Systems lets staff buy stock in the company at a discount via payroll deductions to encourage them to share in its long-term interests.
  
• Scale of ambition: when the company intends to make ‘long jumps’ – radical, transformative moves that disrupt the status quo – in addition to smaller ones. Eg SpaceX’s Starship programme, which aims to lower the cost of putting satellites into orbit by developing the largest and most powerful reusable rocket transport system.
  
• Ability to execute: companies with the ‘scaffolding’ to deliver on their ambitions. Eg Amazon’s sophisticated use of data, including detailed analytics on customer habits and feedback, sharpens the firm’s competitive edge across logistics, ecommerce and cloud computing.

AI stress-tests all three. It reveals misalignment when firms optimise dashboards instead of solving problems. It exposes undersized ambition when firms plug processes into yesterday’s models. And it punishes weak execution because latency between decision and action now compounds even faster.

AI lowers the cost of thinking and trying but raises the premium on deciding and doing. The cultural architects who balance the ‘what could be’ with the ‘what is’ – and who maintain scaffolding with care – will out-adapt as the landscape dances.

Conclusion

In the end, the companies we seek are those that can hold yarak: alive to the moment, sharp without being frantic, hungry but not reckless.

Just as the falcon in yarak is ready to strike the instant it sees prey, these organisations stay taut, alert and primed for decisive movement. That fragile readiness is what defines cultural greatness in the age of AI, and it is what we seek out on behalf of our clients.

Risk factors 

The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in December 2025 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

Potential for Profit and Loss 

All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.

This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.

All information is sourced from Baillie Gifford & Co and is current unless otherwise stated. 

The images used in this communication are for illustrative purposes only.

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