Despite this, New Zealand CEOs say culture is not aligned with their strategy
The majority of chief executive officers across New Zealand consider culture as a top driver for value, saying it will boost company performance through productivity and growth.
A new research study from Te Kunenga ki Pūrehuroa Massey University and the Leadership and Governance Collective found that 95% of leaders believe culture will boost company performance.
In fact, 88% of for-profit CEOs and 87% of not-for-profit (NFP) CEOs rank culture as one of the top three drivers of value.
They even factor it greatly in mergers and acquisitions, with 44% of for-profit CEOs unwilling to buy a culturally misaligned firm, and 59% of NFP CEOs saying they would walk away from such arrangements altogether.
Susanna Lee, Massey Business School PhD candidate and Executive Director of the Collective, said the findings show that culture is a measurable asset that has real and commercial implications.
"These insights empower leaders to drive meaningful change and position culture as a core lever for strategy execution," Lee said in a statement.
Despite this high value placed on culture, 89% of CEOs said culture is not fully aligned with their strategy.
Only 61% of for-profit CEOs link discretionary pay to cultural behaviours, and only 28% of not-for-profit CEOs, according to the research.
The findings reflect the wider differences between for-profit and NFP CEOs, particularly when it comes to the reinforcement of culture.
According to the study, for-profit CEOs often use incentives to align behaviour. On the other hand, only 25% of NFP CEOs find them effective amid cost constraints and the challenge of being unable to invest in incentive schemes.
For NFPs, the more common measures to reinforce culture are flexible work arrangements and values alignment amid limited budgets.
