Is Your Corporate Culture Toxic?

Published: Jan 24, 2019
Modified: Mar 25, 2020

By David Gebler

Dysfunctional corporate policies have long been the subject of water cooler jokes and cubicle chatter. As a business leader, you may sense that your own corporate culture has veered somewhat off course, but you can’t quite put your finger on how it’s gone astray, let alone what to do about it.

How do you gauge if your culture is driving or damaging performance? Watch out for these five sure-fire indicators of toxicity:

1. Troubling shop talk
Do you ever hear workers say: “I know that procedure is on the books, but no one ever follows it,” or “Don’t ask too many questions, just do as you’re told”? Do employees feel as though they are cogs in a machine, or that “no one recognizes my true contribution around here”? Does management say, “Just make your numbers,” or “Do your best,” without considering if what they are asking is reasonable, or even best for the company?

The fix: Hard-working employees, who could potentially contribute greatly to the company’s success, can shut down when they feel disconnected and disengaged. Workers need an environment where they feel they matter and are heard. When disengagement is an issue, leaders need to put down their BlackBerrys (and other distractions) and listen to employees, probing until they discover what they are and aren’t comfortable with. They may find that the company’s culture is very different from what they thought it was.
2. A switch to survival mode
In today’s economy, many employees work under a constant cloud of fear: Will I lose my job? Is my division being sold? Is the company going under? These deep-seated fears cause workers to switch to “survival mode” and to put their own needs first—whether it’s keeping their job, getting that bonus or raise, or closing a sale. In this mode, employees often make questionable choices or turn a blind eye to behavior that could hurt the company in the long run.

The fix: When employees are in survival mode, they need reliable information from leaders they respect and trust. When there is bad news, employees want straight talk. Leaders are often tempted to sugarcoat information. Don’t. All employees want is the truth. Most employees prefer bad news or a clear “No”—preferably accompanied by an explanation of why not—to a “We’ll see.”

3. “Big Brother”-style management
Is your business scrambling to make do with less? You may be cutting corners, asking more from employees, and measuring performance like never before. Tightening the corporate belt, and an employee’s rope, should yield higher profits, right? Wrong.

The Fix: “Big Brother”-type managers actually decrease productivity. Under this management style, tensions run high, employee commitment drops, and turnover increases. The boss can’t be everywhere, and people hate being micro-managed. When managers relax their grip and permit greater autonomy—giving employees instructions and trusting them to do their work well—employees are engaged, happier, and more productive. Empowered employees feel pride and a proprietary sense that what they do matters, and that they are helping the company achieve its goals.

4. Mismatched mergers
When two companies merge, it’s not only a matter of combining staff and locations. The really complicated part is the merging of two distinct corporate cultures. Unless business leaders recognize that creating a new, common culture must be a priority, most reorganizations and acquisitions are doomed to fail.

The Fix: In every merger, there’s always some common ground; why else did the organizations come together in the first place? Leaders must create links and bridges to help employees feel they’re part of the new regime. All too often, veteran workers who have seen it all—and who know what works—get lost in the shuffle. Without these valuable employees around to guide employees into “right” decisions, workers may make the wrong call just to get the job done. Identify and prize those who know the ropes. They are a valuable asset when companies merge and realign. 

5. Missing information
The advent of social networking and the 24/7 news cycle have placed corporations smack in the middle of an information superhighway. We all must rely on data that’s provided by others. So, when information is outdated, inaccessible, or flat-out wrong, it leads to frustration that eats away at corporate culture. Employees will feel disempowered and less able to perform, and they will slowly disengage.

The Fix: Organizations must learn to adjust their policies and attitudes to adapt to the new ways of doing business. In today’s workplace, employees don’t want to have a decision arbitrarily handed down to them; they want to know how and why decisions are being made. Leadership must strive to become more transparent: they should set goals, then keep internal and external stakeholders up to date about where the business stands in meeting those goals. They should invite employees, and even customers, to contribute to the process. And they must stay ahead of “leaked” or inaccurate information releasing key data to the public as soon as it’s made available to internal stakeholders. Doing so creates a consistent message everyone can trust.

About the Author(s)

David Gebler is founder and president of the Skout Group, which helps organizations improve productivity, reputation, and success by focusing on value-based ethics and culture risk management. He is the author of The 3 Power Values: How Commitment, Integrity, and Transparency Clear the Roadblocks to Performance (Jossey-Bass, 2012), from which this article was adapted.