A toxic culture can precipitate a wide range of deleterious effects on an organization and individual members. The toxicity of an organization becomes obvious when overt behaviors demonstrate blatant disregard for social and professional norms. These organizations often become fodder for nightly “news” broadcasts as they are subject to boycotts, civil litigation, and criminal prosecution.
An organization’s toxicity can also manifest much less explicitly. Subtle behaviors and surreptitious actions are more difficult to detect or to evince intent. It is this uncertainty that allows toxic cultures to persist, to refine and more-effectively disguise maladaptive behaviors.
To combat organizational toxicity, leaders must appreciate the importance of a healthy culture, recognize the ingredients of toxic culture, and understand how to implement effective countermeasures.
What It Is and Why It Matters
“Culture,” in general, and “corporate culture,” specifically, can be defined in myriad ways. For simplicity and convenience, we will rely on our constant companion, dictionary.com, for ours: “the values, typical practices, and goals of a business or other organization, especially a large corporation” (def. 7). Each of the components of this definition – values, practices, and goals – contribute extensively to the culture created within an organization.
An organization’s values are the ideals pursued, as matters of course, during normal operations or, perhaps more accurately, those espoused by the organization’s leadership. These often include things like diversity, community involvement, environmental protection, innovation, personal development, cultural sensitivity, and a host of other genuine interests and platitudes.
An organization’s goals should be derived directly from its values. Financial goals are obvious requisites, but environmental, personnel development, and community project goals may also be established. Some goals may be publicly announced, while others are only discussed internally.
The practices in which an organization engages – or tolerates – demonstrate the extent to which its values are honored while pursuing its goals. Practices that are not aligned with stated values, whether organizational or individual in nature, are sources of toxicity.
“Toxicity” is a generalized term used to describe any aberrant behavior, environmental condition, or negative affect that undermines team cohesiveness, effective decision-making, individual performance, or well-being. A “toxic workplace culture” is one in which toxicity is encountered with regularity by one or more individual or group. An important and far too-prevalent example of toxic culture is discussed in “Managerial Schizophrenia and Workplace Cancel Culture” (9Mar2022).
The individual members of an organization are like the cells of a living organism. Poor functioning or loss of one cell may be easily overcome; however, as the number of poisoned cells increases, functioning of the entire organism degrades. Likewise, as toxic culture spreads within an organization, its success and survival are jeopardized.
Deleterious effects of toxic culture exhibit a compounding nature. It progresses from individuals to those around them and then to larger and larger groups. Without effective intervention, the spread of toxic culture and its consequences to the entire organization is inevitable. It may be tempting to call it a domino effect, but it is much more complex than that. The spread of toxic culture is not as linear or predictable as falling dominoes.
This progression is now discussed in brief; a thorough exploration of all possible paths and consequences of toxic culture development is beyond the scope of this presentation. It should suffice, however, to convince readers that workplace culture is worthy of rigorous scrutiny and course correction.
The first recognizable symptom of a toxic workplace culture is often an individual’s increasing stress level. This does not include the stress induced by a challenging project or looming deadline (assuming these were appropriately assigned); these are often considered forms of “good stress” that motivate and inspire people to do their best work. Instead, this refers to “bad stress” – that which is unnecessary and undeserved. Stress and dissatisfaction tend to increase, causing additional problems for the individual, such as self-doubt, burnout, and other mental health concerns. Left unchecked, stress can also lead to physical illness as serious as heart disease or other chronic disorder.
The effects on an individual impact coworkers in two key ways. First, relationships may be strained, as individuals’ responses to elevated stress are often unhealthy interpersonally. Second, the coworkers’ workload often increases as a result of the individual’s reduced productivity and increasing absenteeism. Any project team, department, or committee of which the individual is a member is, thus, less effective. This can create a spiral where one team member “drops out,” raising the stress levels of others, who eventually succumb to its ill effects.
Weakening financial performance is a common downstream effect of toxicity. However, the influence of an organization’s culture on its financial performance is often recognized only post mortem; that is, after a business has collapsed or is in crisis. In most cases, there are plenty of signs – big, flashing, neon signs – that are simply ignored until irreparable damage has been done.
Reduced productivity, engagement, and innovation are clear signals that trouble is brewing. Rising healthcare costs, absenteeism, and attrition also provide reliable warnings. Difficulty recruiting new employees can also be a sign that those outside the organization recognize a problem, even if those inside it are in denial.
As “good” people depart, those left behind are stressed by an increasing concentration of toxicity, accelerating the organization’s demise. This can be brought about through financial collapse or accelerated by noncompliance and corruption. Once civil litigation and criminal prosecution of officers begins, survival of the organization is uncertain at best.
An organization’s culture generates various cycles of behavior. These can be virtuous cycles that reinforce positive behaviors and support long-term goals or vicious cycles that drive away ethical, high-performing team players. Every behavior is endorsed, either explicitly or implicitly, or interrupted; the choice is made by leaders throughout an organization during every cycle. Defeating vicious cycles requires consistent interruption with demonstrations of proper behavior that begin new virtuous cycles.
Characteristics of Toxic Culture
Researchers at CultureX have identified five characteristics of “corporate” culture that push an organization beyond annoying or frustrating to truly toxic. The “Toxic Five” are: disrespectful, noninclusive, unethical, cutthroat, and abusive.
A disrespectful environment exerts a strong negative influence on employee ratings of their workplace. A somewhat generic term, disrespect includes any type of persistent incivility and may overlap other characteristics of toxic culture. Being dismissive of one’s ideas or inputs without proper consideration is a common form of disrespect experienced in toxic cultures.
Noninclusive workplaces are those in which employees are differentially valued according to traits unrelated to any measure of merit. Demographic factors relevant to noninclusive cultures include race, gender, sexual orientation, age, and disability. Any type of discrimination or harassment based on these traits is evidence of a noninclusive culture.
Pervasive cronyism, where “connections” afford special privileges, is also indicative of a noninclusive culture. “General noninclusive culture” refers to sociological in-group and out-group behavior; at its extreme, one or more colleagues may be ostracized by a larger or more-entrenched group. Cliques are not just for high school anymore!
Unethical behavior can also take many forms; it may be directed at peers, subordinates, superiors, customers, suppliers, or any stakeholder that could be named. It could involve the use or disclosure of employees’ personal information, falsifying regulatory, financial, or other documentation, misleading or intentionally misdirecting subordinates or managers, or myriad other inappropriate actions or omissions. Ethics is a broad topic, a proper exploration of which is beyond the scope of this presentation.
A cutthroat environment is one in which coworkers actively compete amongst themselves. This type of culture discourages cooperation and collaboration; instead, employees are incentivized to undermine one another. In extreme cases, sabotage, by physical or reputational means, may be committed to maintain a favorable position relative to a coworker. Workplace Cancel Culture thrives in cutthroat environments.
An abusive culture refers, specifically, to the behavior of supervisors and managers. Supervisors may be physically or verbally aggressive, but abusive behavior is often more subtle. Publicly shaming an employee for a mistake, absence, or other “offense,” as well as individually or collectively disparaging team members are clear signs of abusive management that are often ignored. Abusive behavior must be differentiated from appropriate reprimands, respectfully and professionally delivered, and other disciplinary actions required of effective management.
The Toxic Five provide a framework for understanding the conditions in which toxic cultures develop and persist. What is now needed is an effective method of culture-building that prevents toxicity from spreading and provides an antidote for isolated cases that develop.
Models of Culture Development
Various cultural frameworks have been developed; some by prominent academics or intellectuals, others by famous managers, and still others in relative obscurity. The best model for any organization may be a hybrid of existing frameworks or a new approach that exploits its unique character. A small sample of existing models is presented here for inspiration.
The Three-Legged Stool. A rather simple model, the three-legged stool approach suggests that cultural development relies on resources, training, and accountability. Each leg is fundamental to a healthy culture and easy to understand.
Without the required resources, employees are unable to perform as expected, causing stress and dissatisfaction. This begins the progression of deleterious effects discussed previously. Unwillingness to provide necessary resources indicates an environment that is disrespectful to team members and may also be related to unethical or abusive behavior.
Training provides the know-how that employees need to succeed. It should consist of more than the technical aspects of a job, including appropriate responses to exposure to toxicity. Team members must understand the behaviors required of virtuous cycles to effectively interrupt and replace vicious cycles.
Every member of an organization must be held accountable for his/her actions and influence on workplace culture. All individual contributors, managers, and executives must be held to the same standard for a healthy culture to endure.
Four Enabling Conditions. The four enabling conditions were originally published as keys to effective teamwork. Teamwork and culture are so intricately interwoven that considering these conditions as enablers of healthy culture is also valid. They are: compelling direction, strong structure, supportive context, and shared mindset.
To be effective, an organization requires a “compelling direction.” This can usually be discerned from stated values and goals that define where the organization intends to go and what paths to that destination are and are not acceptable.
A “strong structure” enables the highest performance of which an organization is capable. In this context, structure refers to membership in a group and the apportionment of responsibility within it. Diverse backgrounds and competencies create a versatile team. Careful consideration of workflows and assignment of responsibility supports efficient achievement of objectives. A versatile, efficient organization can be said to have a strong structure.
The “supportive context” needed to maintain a healthy culture is closely related to the resources of the Three-Legged Stool model. It also incorporates an incentive structure that encourages cooperation and collaborative pursuit of objectives.
It is particularly important – and difficult – to establish a “shared mindset” within a geographically dispersed organization. Consistently “lived” values are critical to maintaining a shared mindset; all members must receive the same messages, treatment, and resources for it to survive.
The four enabling conditions are prerequisites to a healthy culture, but they do not guarantee it. One must never forget that teams are comprised of humans, with all the idiosyncrasies and perplexities that render team dynamics as much art as science. For this reason, maintaining a healthy culture requires vigilance and dedication.
Three Critical Drivers. In addition to the Toxic Five, the team at CultureX have identified the three “most powerful predictors of toxic behavior in the workplace.” Slight modification of the terminology and viewpoint yields the “critical drivers” of culture: leadership, social norms, and work design. Implicit in the term is that these drivers can lead to healthy culture, if well-executed, or toxicity, if poorly executed.
It is likely no surprise that leadership is consistently found to be the strongest driver of culture, be it in a positive or negative direction. Leaders set expectations, whether consciously or inadvertently; team members mirror leaders’ behaviors, as they are understood to be “the standard.”
Leaders throughout an organization provide examples of behavior for those around them. In dispersed groups, this can lead to the development of “microcultures” that differ from other locations or the “corporate standard.” The existence of a microculture can be beneficial, neutral, or unfavorable. A toxic microculture is sometimes called a “pocket of toxicity.” Once discovered, a pocket of toxicity must be contained and corrected to protect the entire organization.
Behaviors are deemed acceptable when they are aligned with an organization’s social norms. Norms are context-sensitive; what is appropriate in one setting may be unacceptable in another. A leader’s behavior often establishes social norms, but a cohesive team can define its own that negate some toxicity that would otherwise infiltrate the group.
Elements of work design can be modified to reduce employees’ stress and increase productivity and satisfaction. Eliminating “nuisance work” from a person’s responsibilities is a clear winner, but is not as straightforward as it might first appear. A job cannot always be customized to an individual; it must meet the needs of the organization regardless of who is performing it. One person might be tortured by “paperwork,” while another is annoyed by the need to keep physical assets organized. If every task that could be distasteful to any employee were removed, no work would get done!
Instead, focus on eliminating “busy work” or nonvalue-added activities. Employees are more likely to remain engaged when performing tasks they do not enjoy if they understand the value of the work. Allowing flexibility in task performance or incorporating their input in the work design also increases engagement and satisfaction.
While flexibility is desirable in task performance, clarity and consistency is necessary when it comes to roles and responsibilities. Obviously, an individual needs to know the requirements of his/her own job, but understanding the roles of others is also important. If support is needed, or a problem is discovered, each team member must know to whom it should be reported. Ambiguous reporting structures, with intersecting hierarchies, “dotted-line” reporting relationships, and multiple “bosses” make it difficult for anyone to be confident in the correct course of action that will both achieve the desired outcome and satisfy reporting expectations.
There is significant overlap in the models presented, though attention was drawn to little of it. The remainder is left to the reader to recognize and implement in the fashion that best suits his/her circumstances.
The preceding discussion focused on the spread of toxicity within an organization. It is worth noting, however, that the deleterious effects of toxic culture, in many cases, are not confined to a single organization. Toxic behaviors are often reciprocated or contagious, allowing the spread of toxicity to an organization’s supply chain, customers, and local or global community. Every stakeholder is susceptible to the effects of toxicity that is allowed to permeate an organization. Leaders’ diligence in maintaining a healthy culture protects every member of the organization and those with whom they interact.
For additional guidance or assistance with Operations challenges, feel free to leave a comment, contact JayWink Solutions, or schedule an appointment.
[Link] “Why Every Leader Needs to Worry About Toxic Culture.” Donald Sull, Charles Sull, William Cipolli, and Caio Brighenti. MIT Sloan Management Review; March 16, 2022.
[Link] “How to Fix a Toxic Culture.” Donald Sull and Charles Sull. MIT Sloan Management Review; September 28, 2022.
[Link] “The Secrets of Great Teamwork.” Martine Haas and Mark Mortensen. Harvard Business Review; June 2016.
[Link] “A Leg Up.” Gary S. Netherton. Quality Progress; November 2020.
[Link] “Does your company suffer from broken culture syndrome?” Douglas Ready. MIT Sloan Management Review; January 10, 2022.
[Link] “5 Unspoken Rules That Lead to a Toxic Culture.” Scott Mautz. Inc.; June 6, 2018.
[Link] “Stop These 4 Toxic Behaviors Before Your Employees Quit.” Scott Mautz. Inc.; September 28, 2016.
[Link] “Why You’re Struggling to Improve Company Culture.” Dan Markovitz. IndustryWeek; December 5, 2017.
Jody W. Phelps, MSc, PMP®, MBA
JayWink Solutions, LLC
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