Calling All CEOs and Founders: how valuable is your culture?

For start-ups and early-stage businesses, designing and establishing an effective culture can be one of the most important decisions a CEO can make. However, in a world filled with remote working, cultural diversity, and a growing trend towards prioritising work-life balance, determining what makes a culture effective can be a challenge in itself.

These difficulties have also resulted in a disconnect between academic outputs and the information that business leaders need. Academic research is often US-centric, focused on listed companies, outdated or lacking crucial context and input from established and future leaders. 

A new initiative in New Zealand aims to address this gap: a CEO survey designed by CEOs for CEOs. Its goal is to provide actionable insights that leaders can directly apply to enhance performance within their organisations. While the project targets various organisational types, startups are intentionally included as a priority, supported by an advisory board with substantial experience in that space.

Meet the Advisory Board

Conducted through Massey University and the Leadership and Governance Collective, this initiative is supported by an advisory board comprising prominent figures in the startup community. Brooke Roberts, co-Founder and co-CEO of Sharesies, has lived the startup journey and remains active in the sector by serving on the board of Icehouse Ventures. Kalyn Ponti, CEO of Humankind, has assisted hundreds of startups in enhancing their employee experience and, alongside Caffeine, played a key role in introducing the Best Place to Work Awards to New Zealand. Rhiannon McKinnon, founder of CEO 101 and CEO at Cassiobury, provides support, mentoring, and training across strategy, culture, leadership, and M&A to early-stage CEOs. Tahana Tippett-Tapsell, General Manager at Tūaropaki Trust, has long championed the sector, securing funding for Māori entities in his former role at NZTE and helping launch the first Māori VC Fund. 

Other advisory board members include James Lee, former CEO of Jarden, who now provides strategic advice to boards around the country; Sophia van Zijl, a strategic consultant to NZX and former Chief People Officer at JB Were; and Michael McCarthy, who holds multiple governance roles, including former CEO of Farmers Collective and former CFO of Wellington Hospital.

Insight from Industry Leaders

The initiative's goal is to produce academically robust outputs while ensuring that the research is practical and useful for leaders, governance professionals, and investors. With sufficient participation, the Collective will create dashboards segmented by organisation type, size, and sector, enabling businesses to compare practices and establish benchmarks for best practices. This framework will also allow rapidly growing or evolving companies to anticipate future needs.

Several key themes have already emerged in our pre-research conversations with founders and CEOs, helping shape the design of the survey.

One CEO and founder noted that the people in the room are incredibly important, highlighting the need to be selective. For co-founders, if you are not on the same page, or worse, if you have a negative or toxic person in your team, an organisation can be quickly derailed. You can have a B idea with an A team and still achieve success, but you are likely to fail with an A idea and a B team. 

Another CEO echoed this sentiment from the perspective of the broader team, stating that team fit is essential; if one individual does not work cohesively with the rest, especially in a small team, it can jeopardise a business before it leaves the start-up phase. 

The cost of hiring the wrong person is high. A founder and CEO noted that when you hire someone through a recruitment agency, you often pay 20% of their salary. Then, there is the task of integrating them into the team and getting them up to speed. If the employee stays less than a year, the financial impact on the business can be substantial. Even in a tech company, finding the right people is key; personality, fit, attitude, and potential to learn the required skills are often more important than being perfectly qualified.

Learning from Failure

Another theme highlighted by CEOs around the country was the critical relationship a business has with failure.

One founder noted that it is vital to provide a safe place for people to share and develop ideas. ‘’It is ok to hit hurdles or fail.’’ However, admitting and confronting mistakes is very important, and the immediate fix is often far less costly than if the mistake is found later. Another CEO noted that many organisations fail to look back and reflect on what did not work well, an essential step for learning. Those who learn quickly tend to succeed. However, retrospective analysis is often overlooked because it can be expensive, requires skilled facilitation, and involves addressing the emotional aspects of failure. Moreover, the organisational environment must support the idea that mistakes are part of the process and be accepted wholeheartedly. 

One CEO pointed to Sweden’s model, where startups that fail can access government funding again, provided they explain the lessons learned from their failure. He noted that there are valuable lessons in failure, and the biggest risk comes from experiencing a few successes with no failures, which can lead to arrogance and complacency. 

Embracing Risk

Corporate culture significantly influences a firm's approach to business risks and long-term strategy. An investor in startups noted that a company’s risk appetite is often dictated by one or two founders, which heavily impacts downstream strategic decision-making.

Employee share ownership plans, which are increasingly common in the startup sector, offer employees an ownership stake in the company and align their interests with overall performance. Some companies extend these plans beyond executives, fostering a stronger corporate culture and a closer alignment between individual employee risk-taking and company outputs.

However, as a company grows and issues more shares, existing shareholders face dilution, complicating equitable ownership distribution. Furthermore, sudden growth can make maintaining an effective culture challenging, as new people and new stakeholders enter a pre-existing cultural structure.

Understanding Employee Needs

Many cultures develop unintentionally, especially when there is no immediate focus on culture by the founders and employees are self-motivated with a strong sense of purpose. One CEO and founder noted that, as a company grows, it is vital to understand what truly matters to employees: whether it’s the work itself, growth opportunities, their title, flexibility, or social interactions like Friday drinks.

Employee culture is influenced by individual backgrounds, making it essential to create an environment where everyone feels empowered to share their thoughts. These cultural differences can be profound, with some backgrounds favouring direct – even blunt – communication styles, while employees from cultures with a high respect for authority may need to be invited to share their thoughts. Understanding these cultural differences can strengthen team dynamics and organisational culture. It also broadens the range of information and perspectives the team is working with, leading to more informed decision-making.

We need your help

We need CEOs and equivalent leaders to participate in the survey so we can provide comprehensive and meaningful results for the startup sector.

The strength of the research is that it is academically rigorous, commercially independent, and informed by an Advisory Board of CEOs and senior leaders deeply integrated into the startup community. This will ensure the research is relevant to the sector and that we communicate the findings effectively for time-poor leaders. This will help founders, leaders, and investors use these insights to enhance organisational cohesion, productivity and performance.

The research aims to provide valuable insights that can enhance the effectiveness and resilience of the startup community. With the involvement of founders, CEOs, and leaders and a focus on actionable results, this initiative is poised to make a significant impact.

The year's inaugural annual survey will take approximately 15 minutes and will cover organisational culture and its effects on firm value, mergers and acquisitions, ethics, risk-taking, long-term orientation, remote working, and AI adoption.

On the Massey side, the research is guided by Associate Professor Claire Matthews and Dr Jeffrey Stangl, PhD supervisors and senior staff members at Massey University’s Business School. Their industry profiles and external governance roles ensure that the research maintains rigorous academic standards and relevance to practice. 

Official partners include the New Zealand Institute of Economic Research, BusinessNZ, Creative HQ, New Zealand Growth Capital Partners, Ākina and Local Government New Zealand (LGNZ). Additionally, numerous industry groups and supporters will deliver the survey to their networks. Supporters will continue to be added until the release date on 22 October to maximise participation and the depth of information returned to founders and leaders.