The survey indicated 41 percent of public listed companies ranked organisational culture as the single most important factor in determining firm value. Photo: RNZ
Corporate culture is rated as one of the three top drivers of growth, yet most organisations fail to make the most it.
A survey of 1188 chief executives commissioned by the Leadership and Governance Collective* indicates about nine-out-ten (87 percent - 92 percent) rate corporate culture as a key driver of organisational value, performance and resilience, yet only a small minority (10 percent -15 percent) say that culture is completely aligned with their strategy.
"This gap is driven not by lack of intent, but by structural constraints, insufficient leadership capability, misaligned policies and underinvestment," collective executive director Susanna Lee said.
"Organisations that close this gap, particularly small firms, B Corps, founder-led entities and those with strong stewardship models, demonstrate that cultural alignment is both achievable and economically beneficial.
"For larger, more complex organisations, the challenge is greater but not insurmountable."
Lee said failure to incorporate culture in the fabric of an organisation carried measurable economic costs when it came to high-stakes decisions, such as mergers and acquisitions (M&A).
"M&A transactions are among the few business activities where culture is implicitly assigned a monetary value," Lee said.
The survey asked chief executives whether they would proceed with buying a culturally misaligned firm or would require a discount.
"Responses were consistent across sectors," she said, with 44 percent to 59 percent of leaders indicating they would not buy a culturally misaligned organisation.
"Among those willing to proceed, most required a price discount ranging from over 30 percent to as low as 5 percent.
"Only 6 percent to 9 percent of respondents said they would make no price adjustment."
The survey also indicated 41 percent of public listed companies ranked organisational culture as the single most important factor in determining firm value.
Other indicators of cultural value included trust among employees, adaptability, a willingness to report unethical behaviour and comfort in offering critiques.
Lee said even small efforts to improve cultural leadership can benefit organisations.
*The Leadership and Governance Collective is a collaboration of academics, executives, directors and organisations committed to advancing organisational productivity and best practices based on independent, evidence-based research.
The survey was executed through Massey University as part of a PhD programme, under the supervision of Associate Professor Claire Matthews and Dr Jeff Strangl.
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