Sunday, 10 July 2011

How do you spot a toxic corporate culture?

"Organization culture is like pornography; it is hard to define, but you know it when you see it." Ellen Wallach (health adviser to the democrat, Jerrold Nadler)

You would have to be living in a bubble in the UK at the moment to miss the blanket coverage of the closure of the News of the World newspaper, in the midst of phone hacking and bribery allegations. A word that keeps cropping up among commentators and distressed employees is ‘toxic’.  One of the 200 plus staff members who have just lost their job accused  Rebekah Brooks ‘…You’re making the whole of News International toxic..’

How can you define and recognise a toxic corporate culture?

There are many complex descriptions including ‘One with which behaviours which poison, are disruptive, destructive, exploitative, dysfunctional and abusive are pervasive and tolerated’ (Michael Walton, Fellow in the centre for leadership studies University of Exeter))

I have a more simplistic handle on this problem:

A toxic culture in an organisation creates an environment that can damage the emotional, physical or financial wellbeing of employees, customers and those associated with that organisation.

How does a toxic corporate culture develop? The cause of this negative environment in a company is ultimately down to leadership. Even if the leadership team has not originally created a problem, if they allow it to continue or turn a blind eye, they are ‘enablers’

Here are some of the causes of a toxic corporate environment:

Authoritarion or bullying leadership: If the head of the gang is a bully, then those who flourish or profit from this environment are likely to be bullies too. A leader who is authoritarian may not actually be a bully, but expecting total obedience has the same effect. No room for creative thinking, a culture of fear and subservience. Not healthy. This type of leader often creates a team of ‘henchmen’ (or women!) to ensure that his or her wishes are complied with. The effect that this type of management has in the health and wellbeing of staff is well documented.

Competitive, win/lose environment: Win/win is good, win/lose is bad. An environment where good work is rewarded and the introduction of well designed incentive and recognition programmes can have a significant effect on company growth and morale. Some leaders from the ‘divide and conquer’ school can create a deeply unhealthy atmosphere where power struggles, especially among management teams, are rife. This unhealthy competition spreads to the rest of the employees and create a divisive, unhappy workforce.

Weak leadership: Show me a parent who doesn’t discipline their child from an early age and I can show you an unruly adolescent! Leadership is in so many ways like parenting and employees need guidance, boundaries, affirmation and censure where appropriate. Unchecked bad behaviour within one division can spread to other divisions. A charismatic manager who creates an exceptionally successful and happy culture within their division can, unwittingly, create disruption if their boss cannot demonstrate equivalent leadership qualities.

Dishonest/corrupt: No need to say much about this. The root of this culture is based in ambition and greed. Hollywood has created many stunning movies demonstrating toxic environments at their worst. As Gordon Gekko famously said in Wall Street ‘Greed is good’ (but for those impressionable souls reading this – please note – he ended up in prison!) The Firm and Erin Brokovich are also great examples.

Change averse: Leaders and leadership teams who are averse to change can create a stifling environment where innovation and creativity are discouraged and pandering traditionalism is feted. The good thing about organisations such as these is that they are unlikely to survive!

So what can you do if you recognise any of the above? The subject of another blog I think. But in the meantime – if you work for an organisation with a toxic environment – try to leave. If you lead one – try to change. And if you are offered a job with one – run for the hills!

This posting is dedicated to the employees from the News of the World who have lost their jobs. I know that most, if not all, of you are innocent of the sins allegedly perpetrated by your predecessors and bosses and I wish you all the best for the future. Choose your next employer well.


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