PDF

Toxic Culture in 2022

Toxic cultures are making headlines AGAIN. The stuff we thought we’d confined to Room 101 for good is still there, lurking just below the surface in our organisations and institutions. Bullying, cover-ups, ego-driven bulls in china shops of leaders, it’s all there in varying degrees. BrewDog and the Met the latest in a long (sadly too long) line of corporate scandals. Mid Staffs NHS. BBC with Savile and gender pay. Barclays LIBOR, BP, Enron. And entire sectors like the film industry with ‘Me Too’. And now, even parts of Whitehall and Westminster.

It’s very easy to look at big brands that make the headlines when there’s been a toxic exposé and think oh it’s the big brands, the big institutions with a certain kind of culture, it’s them, of course it doesn’t apply to me, leader of my SME. In fact, the ingredients could be there in every business. The potential is always there.

It needs to stop, and it needs to stop now. Major mental and physical impacts of working in a toxic culture aside, organisations who tolerate this are in the last chance saloon. Gen Z simply won’t tolerate it, they just won’t come and work for you. If they do, they just won’t stay. Don’t forget we’re in the midst of the biggest battle for talent we’ve ever known. This s**t just got (even more) real.

The numbers alongside toxic culture are just as poisonous. £30,000 (on average) to recruit a new employee. £381,350 average pay-out received by people impacted by problematic behaviour, such as bullying, harassment or discrimination at work. Even investors base their decisions on general reputation. Almost three quarters (71%) said they wouldn’t invest in a company that had a problematic workplace culture, while two thirds (64%) wouldn’t invest in a company that has numerous NDAs with former employees.

According to the latest Edelman Trust Barometer (2022), all stakeholders hold business accountable. 58% of consumers will buy or advocate based on their values and beliefs while 60% choose a place to work based on them. For investors it’s even higher at 80%.

What are the hallmarks of toxic culture?

• There is consensus around the hallmarks of toxic culture:
• Feeling constantly overwhelmed or stressed
• Rigid or inflexible communication
• Unclear work responsibilities and boundaries
• Nepotism, cronyism and favouritism
• Negative, hostile, or aggressive interactions with co-workers
• Lack of psychological safety
• Manipulation and blame games
• Difficulty concentrating or completing tasks due to stress
• Physical and mental health problems
• Having negative thoughts about work or the company
• Feeling unmotivated or undervalued
• Lack of appreciation for work completed
• Stifled career growth and lack of developmental opportunities
• Cliques, gossip, and rumours
• Culture that cultivates exclusionary behaviour
• Work starts to take over your life
• Unsupportive management or micromanagement
• Bullying or harassment from co-workers or managers
• Lack of diversity due to race, sexual orientation, religion, gender identity/expression

What’s crystal clear from this list is that the impact on an employee’s mental and physical wellbeing is enormous. The result of this is disengagement, disengagement felt inside and outside an organisation in myriad ways. From absenteeism, turnover, lack of innovation and loss of productivity, to major reputational damage and even existential threat.

If these are the hallmarks, then what are the root causes? And what can you do to make sure your organisation’s culture stays in peak condition?

Woodreed’s been considering toxic culture through the lens of the Four Enablers of engagement as identified by Engage for Success. We consider what toxic looks like then suggest potential antidotes.

The toxic

A fish rots from the head down

Proverb

Does a toxic culture always come from the top? Or is it simply a leader’s tolerance of one that causes it to poison an organisation? Or a bit of both? What is undeniable is that toxic leaders breed toxic cultures.

A toxic culture led by the top is defined as follows:

A process in which leaders, by dint of their destructive behaviour and/or dysfunctional personal characteristics inflict serious and enduring harm on their followers, their organisations, and non-followers, alike

Jean Lipman Blumen (Toxic leadership, a contextual framework)

• Autocratic
• Narcissistic
• Discriminatory
• Intimidating
• Manipulative
• Overly competitive

A quick glance around Glassdoor will give you a flavour of the kind of organisations led by leaders with these characteristics. Then avoid at all costs.

But more than that, toxic cultures arise when leadership fails to call out bad behaviour. Makes excuses for the star performers, moves the toxic player sideways or worse still promotes them. Fails to model a positive culture of recognition and shared celebration. Not only does this fail to address the root cause of the problem, it actively encourages others to behave similarly to achieve perceived success.

After all, as John Amaechi so rightly says;

Culture is the worst behaviour a leader will tolerate

The antidote

Have visible, empowering leadership who can share a strong strategic narrative about the organisation, where it’s come from and where it’s going (the 1st Enabler)

The pandemic was a real eye opener to leaders and their behaviour. There were winners and losers.

Among the winners were shining examples of genuine modern day leading excellence. Step forward and take a bow Gareth Southgate. England’s football manager during Euro 2020, Southgate showed us truly modern leadership. The nice guy won. The way he led his team, kept the press onside and won all our hearts at the same time was a modern leadership masterclass. His winning formula? No, not 5-3-2, but the 4Cs – compassion, courage, communication and consistency.

Let’s look at the details. His stance was one of open communication from the get-go. One of the first things that he did was to say, okay guys, we’re going to go and meet with the media. He’d observed the often fractious relationship between the team and the media, and he wanted to fix that. We’re going to talk, have open communication. He wanted to build relationships. That takes courage and humility. He had the courage of his convictions to say, this is how I’m going to play it. This is what I’m going to do, and the humility to listen. He brought the team together, those big personalities, those big egos. They listened to him, they trusted him, they respected him.

Southgate’s management style is ego light. It’s never about him; it’s always about others

Ben Church, CNN

Jacinda Ardern, New Zealand’s PM is another excellent example of someone who leads with the same qualities. Her ability to connect with people at the start of the pandemic marked her out from other leaders. She was so ordinary yet so extraordinary, all at the same time. She popped the kids to bed and hopped onto ‘Facebook live’ in her home clothes to speak to New Zealand’s people. There she spoke plainly, calmly, authentically in a language her people understood, avoiding those clichés, empty platitudes and spin other politicians just couldn’t seem to avoid.

And the result? In a word, Trust.

Back to business and it seems in 2022 CEOs are finally waking up to the importance of living and leading positive culture. The pandemic shining a light on culture for them. The international ‘CEO Culture Barometer’ quizzed 44 CEOs of leading companies across eight countries and 14 industries, representing a total combined workforce of 250,000 employees. What it revealed was a huge leap in the number of CEOs who now view company culture as integral to their organisation’s success. The pandemic led to 95% of those CEOs planning to focus on culture, an increase of 27%. Most significantly, 95% also plan to increase their focus on leadership effectiveness post-crisis, with ‘empathy, emotion and care for teams’ the key focus.

The toxic

Perhaps worse than a toxic CEO, there’s nothing more corrosive at work than a toxic line manager. Not only do they infect the workplace, but they create a culture where people are afraid to speak up or ask for help. Dish out blame, steal the credit.

When we run team leader workshops at Woodreed, we often start with a simple exercise – Close your eyes and think about your worst, most toxic boss (and sadly everyone has had one). Now think about how they made you FEEL? The response is visceral. Undermined, belittled, unimportant, excluded. You can see people visably shudder.

Toxic line managers put their people in the ‘away’ or ‘threat’ state. This state adversely impacts everything from performance, learning and creativity to clarity of thinking. From becoming easily distracted, anxious and forgetful to more serious impacts on the immune system, physical wellbeing and mental health. The hallmarks of toxic culture right there.

Heidi Lynne Kurter writing for Forbes concurs:

Over time, this toxicity destroys employee confidence, negatively impacts their job and causes their mental health to deteriorate

Toxic cultures are places where this behaviour is tolerated or worse still excused.

“That’s just warehouses”

“That’s just the way it’s always been done”

“Oh it’s just Bob the boss being, Bob. It’s just his management style”

“It’s always been like this”

“That’s just working in a bar”

“It’s just a few bad apples in management”

To call it out takes guts. Particularly when the person or team in question is high performing:

Many staff will be reluctant to call it out, but it’s so important that they do

says Joe Audcent, Lead Coach from Airside Professional Safety Team, Changi Airport, Singapore.

But more importantly, as he goes on to say;

Leaders must be proactive at spotting the signs and tackling it. I’ve fortunately only worked in one job that was toxic and had these characteristics. Interestingly, because the perception of the leadership team was that the team were high performing, they turned a blind eye and the key players generating the toxicity continued unchallenged

The antidote

Recruit, train and support engaging managers to better focus their people and give them scope; treating them as individuals, coaching and stretching (the 2nd Enabler)

This 2nd Enabler of employee engagement says it all.

The new era of work has welcomed in a more authentic tone and as a result we are having more honest conversations. Nowadays we are not simply asking “How are you?” we actually mean “How are you, really?”

To do this well means not simply promoting the best performers, sales people or practitioners but equipping them with new people skills too so they can perform the vital people leader part of their new role. The so-called soft skills – communication, handling difficult conversations, showing empathy and exercising emotional intelligence. Skills which are often so hard to learn and have such a proven impact on team performance and dynamic and on wellbeing and mental health.

Digital agency Reddico, rightly celebrated in ‘Best Places to Work’, has taken this to the next level by dispensing with line managers in their business entirely and investing in a team of coaches whose sole role is to mentor and coach individuals’ personal and professional development.

We’re trying to create powerful teams, who come together as equals to solve problems and move things forward. There are no people responsibilities as part of this role. Instead, individuals choose their own coach... the person they feel is best to motivate, encourage and support them.

Luke Kyte, Head of Culture, Reddico

The toxic

You could argue that you know you have a toxic culture when no one says anything. You’ve got a culture of fear and retribution, one of blame. Poor levels of engagement with surveys and pulses can indicate a lack of trust – even when told it’s anonymous, employees are still wary.

You’d be surprised how little organisations ask their people. They still rely on an annual or worse still bi-annual survey to tap into what their employees think.

Never fear the myth of the over surveyed employee, as Sarah Hood, Global Head of Engagement at BUPA puts it;

There’s no such thing as survey fatigue so long as you have a culture of action

And employee voice isn’t just surveys or pulses. It’s employees knowing that they can have ideas, be creative and innovative and that they will be listened to, and their suggestions treated seriously. A lack of creativity and innovation, an unwillingness to collaborate, a siloed organisation of teams protecting their own backs are all indications that there is a toxic culture.

The antidote

Employee voice throughout the organisations, for reinforcing and challenging views, between functions and externally. Employees are seen not as the problem, rather as central to the solution, to be involved, listened to, and invited to contribute their experience, expertise and ideas (the 3rd Enabler)

Engage for Success co-founder Nita Clarke OBE nails it when she says;

Employee voice is the best smoke alarm you will ever have

It’s not about waiting for the toxic fallout before you start to address it. It’s about regularly tapping into what your people think.

There’s never any substitute for literally just going and talking to people.

It doesn’t matter how big your organisation is, you can still do that, you really, really can. If you aren’t doing that as a leader, then, I think you haven’t understood leadership properly

Cathy Brown, CEO at not-for-profit social enterprise, Initiative for Social Entrepreneurs.

Woodreed’s Creative Planning Director Charlotte Dahl began her career at global ad agency BBH (Bartle Bogle Hegarty). She recalls vividly the advertising giant John Bartle coming up to her as a young grad and saying “How are you today, Charlotte, how’s work going for you right now?”. She was so surprised she responded with “How do you know my name?” and he said “Of course I know your name”.

Treat your team as individuals.

For leadership coach (and all-round polymath) Lorna Leeson it’s about facing up to our responsibilities;

We are all adults when we come to work. So if we see something that we think needs to change, or isn’t right, we have a responsibility to address that and to do it in a constructive way

But you need to be in the right environment to do this and that’s one of psychological safety. The importance of psychological safety in the workplace is becoming increasingly recognised as key to wellbeing, key to a healthy culture. It’s about intentionally creating an environment where people feel able to be honest and open and transparent. People need to feel empowered to call out poor behaviour without shame or blame.

Internal communication has a real role here too. If you want to stop employee voice becoming a negative echo chamber, then you need to make sure you are telling your people what they need to know, when they need to know it. Even if you can’t tell them everything, tell them what you can and tell them why you can’t tell them the rest right now. Rumour mills crank into action and sow the seeds for a toxic culture to germinate.

As leaders you’ve got to be brave and you’ve got to want to hear uncomfortable truths.

You’ve got to create forums for listening. You’ve got to be prepared to pull your big boy pants right up. To face uncomfortable truths and to use them as an opportunity to change for good and not put your head in the sand

Charlotte Dahl, Creative Planning Director, Woodreed

The toxic

Don’t confuse culture with marketing.

When you lead on culture from a marketing and branding perspective but you don’t address building the behaviours for the culture to really live and breathe and congruence to happen, the gap will just get bigger and bigger. Don’t treat culture simply as a tactical marketing exercise.

At Woodreed we know how important it is having one brand inside and out. That your values externally are supported internally with your culture, with behaviours that are lived, on a daily basis by everybody.

And that’s where people struggle. That’s where the job often stops. We’ve defined the values and got some behaviours. Job done, move on. Well actually, that’s just the beginning, isn’t it?

Woodreed MD, Jo Moffat

Worse still all too often values are just words on a poster. Meaningless without behaviours to make them real.

Part of the BrewDog problem was that their marketing was fabulous, their external comms and advertising to consumers was spot on. Perhaps they saw their values as just another part of their marketing and failed to make sure that they were truly grounded in how things were inside the business.

In our social media age, with 50 million + hits daily at workplace review site Glassdoor, you simply can’t get away with having a toxic culture. Your customers and potential employees will soon cotton on. Increasingly, Millennials and Gen Z see no difference between the brands that they buy and the organisations that market them. They expect them to have honesty and purpose, and make a contribution to society. They also expect them to treat their people and suppliers with respect. They’ll vote with their feet, or rather with their credit cards.

So, like you manage your brand externally, you’ve got to manage culture internally. Toxic cultures will often arrive in an absence of shared values and defined behaviours. The 2013 Saltz report into Barclay’s LIBOR scandal is a good (bad) example. The report laid the blame firmly at the door of toxic culture created by silos, the result of no clear sense of organisational values.

Again, you’re only as good as the worst behaviour you are prepared to tolerate as John Amaechi rightly says.

The antidote

Have organisational integrity – make sure the values on the wall are reflected in day to day behaviours of EVERYONE in the business at all levels. There is no ‘say – do’ gap, anywhere (The 4th Enabler)

Be clear on your organisation’s values and work hard to co-create a framework of behaviours that everyone’s had a chance to contribute towards. Then empower your people to call out toxic behaviours, those destructive and negative behaviours that don’t fit with your values. Build calling out bad behaviour into your behavioural framework. Equip your managers and leaders to do the same, to allow this to happen and to lead by example.

Your behaviours are your values in action.

There’s often a lack of cohesiveness where values are over here, strategy over there and culture is left nebulous and unwieldy. All of these elements are intrinsically linked and need to be seen as one joined up whole, aligned and moving the organisation forwards to achieve its strategy and vision.

Conclusion

It takes seven years on average to create an optimum organisational culture. There’s no quick fix. You’ve got to be honest about the state of your culture and willing to do what it takes to heal it.

You’ve got to do the hard graft to regain that trust. Beware, as Engage for Success Co-Founder and Co-author of the MacLeod report, David MacLeod OBE cautions:

Trust arrives on foot and leaves on horseback

You can’t heal toxic culture overnight, but it can be healed over time. Live your values authentically from the top down, be courageous, have humility

Jo Moffatt, MD Woodreed

Clearly prevention is better than cure. So applying the Four Enablers to your people practice will help make sure you don’t end up making headlines for all the wrong reasons.