Company Culture: Are You Tolerating Toxicity?
No leader strives to create a toxic culture. It's ruthless, unethical, and stirs negative emotions. A recent study suggests it's the most potent driver behind the Great Resignation. Most employees and employers are trying to avoid it at all costs. But when present, there is no escaping, even if working remotely. A doctor – let's call him Strange – was a newly hired surgeon employed by a cash-strapped healthcare system. Dr. Strange was considered by executive leadership to be the best surgeon to lead a new, highly competitive, and lucrative service line. During surgery, Dr. Strange slapped a nurse's hand in the operating room out of frustration. Although not always as obvious, tolerating toxicity forces leaders to wrestle with the question, is it worth the damage? Leaders need to be concerned about toxic culture. Here are five signs of a toxic culture and two detoxing steps every leader can take.
Why Leaders Need to be Concerned About a Toxic Culture
Company culture is the one thing that influences every aspect of a business. It directly impacts organizational success, employees, customers, and communities. An organization's underlying cultural values affect employees' behaviors and decisions.
A recent study by MIT Sloan into the factors driving the great resignation identified that toxic company culture is a more reliable predictor of voluntary turnover than how employees assess their compensation. Surprised? Evidence from this study suggests that a toxic organizational culture is more than ten times stronger of an influence on employee attrition than what you are paying your employees.
There are negative consequences when employees are treated rudely or blamed for things over which they have no control. A survey of 800 leaders and employees across 17 industries revealed the following reactions to a lack of civil treatment in the workplace:
48% decreased effort
66% lower quality work performed
80% lost work time worrying about how they were treated
63% lost work time avoiding the offender
78% less organizational commitment
Sadly, the side effects of a toxic culture extend beyond the workplace. Evidence suggests that negative consequences create a harmful ripple effect. Employees working in a toxic workplace report experiencing decreased well-being and increased work-family conflict.
5 Toxic Culture Attributes
Company culture is a complex topic because it involves individuals, their interactions, teams, and the organization. Edgar Schein, who is considered to be one of the most influential contemporary thought leaders on organizational culture, described it as:
"a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems." Schein
A toxic culture is characterized by harassment, bullying, insulting leadership, threatening behaviors, and incivility directly linked to workplace stress.
It is easy to understand that a toxic culture is terrible. But it is much less clear how to distinguish between a characteristic of the culture that is just irritating and one that is so dreadful that it makes the culture toxic?
There are many different opinions on the attributes of a toxic culture. Analysis by MIT Sloan revealed that the five most pervasive characteristics of toxic cultures are:
A lack of consideration, courtesy, and dignity for others. Feeling disrespected has the most significant impact on an employee's overall rating of their corporate culture. Demonstrating respect includes encouraging others to contribute and listening to others before sharing your point of view.
A lack of inclusion. This cluster around companies that are not inclusive includes references of identity, including gender, race, and age, as well as nepotism and playing favorites.
Unethical and dishonest behavior. In addition to cheating, being shady, lying, and misleading, this cluster also includes regulatory compliance and safety standards that protect employees.
Ruthless and backstabbing behavior. These behaviors are the opposite of teamwork and collaboration and are not areas of modest friction but are described as intentional sabotage and throwing the other person under the bus.
Abusive, harassment, and bullying behavior. This is characterized by hostile behaviors, including yelling, physical and verbal abuse, and condescending toward others.
2 Culture Detoxing Steps for Leaders
First, be the change you want to see in the world. Often leadership bad habits trickle down and become acceptable ways of behaving. Model good behavior and ask for feedback from followers about what you do that bothers them. Evaluate the ethical consequences of your decisions and create an open-door policy allowing employees to provide input where their voices and concerns can be heard.
"Feedback is the breakfast of champions." Blanchard
Second, actively architect and manage the workplace culture. Hire and fire employees to create and reinforce the desired company culture. Teach leaders and employees through stories about how they should respond in different situations and the costs of tolerating toxicity. Reinforce and communicate the importance of trust and teamwork. Reward employees that live the desired culture. Measure company results and the preferred company culture.
We Can Help You Build A Great Company Culture
We can partner with you to assess whether you have the right culture for your strategy, develop attributes needed to support great company culture, and implement measures to track progress and sustain transformation. We use proven organizational culture and leadership solutions available virtually and in person.
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Priesmuth, M. & Schminke, M. (2017). Helping thy neighbor? Prosocial reactions to observed abusive supervision in the workplace. Journal of Management.
Schein, P. (2017). Organizational culture and leadership (5th ed). Wiley.
Sull, D., Sull, C., & Zweig, B. (2022). Toxic culture is driving the great resignation. MIT Sloan Management Review.
Sull, D., Sull, C., & Zweig, B. (2022). Why every leader needs to worry about toxic culture. MIT Sloan Management Review.
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