No leader strives to create a toxic culture. It's a liability. Just its mention can stir up negative emotions within those with experience. Evidence from an MIT Sloan study suggests workplace culture is the most potent driver behind the more than 50 million workers that quit their jobs recently. Employees and employers are trying to avoid toxic cultures at all costs. But when present, there is no escaping, even if working remotely. It is easy to understand that having 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. A doctor – let's call him Dr. Strange – was a newly hired surgeon employed by a cash-strapped healthcare system. Executive leadership considered Dr. Strange the best surgeon to lead a new, highly competitive, and lucrative service line. However, during surgery, Dr. Strange slapped a nurse's hand in the operating room out of frustration. Although not always as ruthless and obvious in the workplace, tolerating toxicity forces leaders to wrestle with the question, is it worth the damage? A positive company culture is a competitive advantage and force multiplier. 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
Culture is the one thing that influences everything in your business. It directly impacts your success, your employee's success, your customers, and the communities where you operate. Your organization's underlying cultural values influence employee 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 at influencing 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
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.
Does Your Company Culture Show Signs of a Toxic Culture?
Company culture is a complex topic because it involves individuals, their interactions, teams, and the organization. A toxic culture is characterized by harassment, bullying, insulting leadership, threatening behaviors, and incivility directly linked to workplace stress.
There are many different opinions on the attributes of a toxic culture. Analysis by MIT Sloan revealed that the five most pervasive characteristics of cultures that are toxic and not just irritating:
Toxic Culture Sign #1: Lack of Consideration, Courtesy, and Dignity
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.
Toxic Culture Sign #2: Lack of Inclusion
This sign refers to companies that are not inclusive and includes references to identity, including gender, race, and age, as well as nepotism and playing favorites. When there is an us and them mentality between employees, there is a lack of inclusion.
Toxic Culture Sign #3: Unethical and Dishonest Behavior
In addition to cheating, being shady, lying, and misleading, this sign includes regulatory compliance and safety standards that protect employees.
Toxic Culture Sign #4: Ruthlessness and Backstabbing
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.
Toxic Culture Sign #5: Harassing and Bullying
This sign is characterized by hostile behaviors, including yelling, physical and verbal abuse, and condescending comments and treatment toward others.
Culture Detox Step #1: Define Your Company Culture
Defining your company or team culture in measurable and actionable terms can feel overwhelming, but it is extremely helpful for creating and sustaining positive change. The concept of culture is often considered too abstract and is not well understood.
The Competing Values Framework is an actionable measure and framework you can use to define your company culture. The Competing Values Framework identifies four fundamentally different cultures.
Clan Culture creates a collaborative atmosphere like a family. This culture emphasizes the value of teamwork, participation, and a consensus decision-making style.
Adhocracy Culture creates an energetic and entrepreneurial atmosphere. This culture stresses the importance of research and continuous improvement.
Market Culture creates a competitive, fast-paced, results-oriented environment. This culture highlights coming in first.
Hierarchy Culture is a top-down formal rule-based atmosphere. This culture emphasizes efficient, reliable, and cost-effective performance.
Note: Adapted from Cameron and Quinn (2011).
The framework enhances cultural understanding by simplifying the cultural description to only two fundamental dimensions: flexibility or stability and internal or external focus. A culture survey aligned with the Competing Values Framework can define the alignment of the current culture with the preferred organizational culture.
"Feedback is the breakfast of champions." Blanchard
Culture Detox Step #2: Be the Change
Gandhi said, "Be the change you want to see in the world." Often accidental bad leadership habits trickle down and become acceptable ways of behaving.
Every leader can model good behavior and ask for feedback from followers.
Enhance your self-awareness of your leadership habits.
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.
Then, actively architect and manage the workplace culture. A recent study found that only 12% of companies claim to have a program in place to define and improve 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 alignment with the preferred company culture.
What is Your Company Culture Challenge?
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. Busy leaders and employees often lack access to high-quality training, proven tools, and over-the-shoulder guidance necessary to create positive culture change.
Our solutions accelerate positive culture change, create committed employees, and drive your business growth.
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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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