Wednesday, October 31, 2012

Oxygen: How Is Your Corporate Culture Breathing? (Part 3 - Final)

This is the third and final post in the series "Oxygen: How Is Your Corporate Culture Breathing?". Please see the previous posts for Part 1 and Part 2.

This final chapter looks at the primary drivers of a toxic culture.

Did you know Enron had core values that were known throughout the company as RICE? These core values were summarized as (Seeger, 2003, p. 65):
  • Respect: We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here.
  • Integrity: We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it.
  • Communication: We have an obligation to communicate. Here, we take the time to talk with one another ... and to listen. We believe that information is meant to move and that information moves people.
  • Excellence: We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.
To me, these are at the opposite end of a toxic culture spectrum. So what went wrong at Enron and continues in the toxic environments of so many organisations today? Answer - a toxic triangle. A vicious combination of Leadership (Destructive), Groupthink (followers) and the Business (Conducive) Environment.

In the book 'The Allure of Toxic Leaders: Why We Follow Destructive Bosses and Corrupt Politicians-and How We Can Survive Them' the author, Jean Lipman-Blumen, concludes that toxic leaders' followers are willing victims who allowed misguided bosses to appeal to their deepest needs, anxieties and fears i.e. the need for an ongoing wage. The author also explores how "followers inadvertently keep themselves in line by a set of insidious control myths that they internalize. For example, the belief that the leader must necessarily be in a position to "know more" than the followers often stills the followers objections."

Appealing to one's "deepest needs" is something we all live with. Who wants to lose their job in a tough economic climate? To see this articulated brilliantly I urge you to read the comments section of an article that appeared in Army Times, 'Army wants to rid top ranks of toxic leaders'. For example a reader commented, "Sad thing, nothing will happen. I know of many toxic leaders that got great OERs and are not only promoted, but are placed in command. Reality is, when you have a senior leader who is toxic, no one will step up because they know it will end thier (sic) career."

If Destructive Leaders are a key driver of a toxic culture is it possible for followers not to contribute or play a supporting role is such an environment? From a theoretical point of view, suggestions include, "At the follower level, organizations should ensure safe outlets exist for ‘outing’ leaders who engage in destructive behaviors and rhetoric. A second strategy might include establishing an ethics ombudsperson who, in addition to investigating organizational corruption, could also investigate allegations of leader toxicity." (Source: Leader toxicity: An empirical investigation of toxic behavior and rhetoric: Kathie L. Pelletier).

Similarly Lipman-Blumen suggests:

Five strategies can help followers move away from a toxic leader and do better in the 
  1. "Matriculating in the school of anxiety" – Confront the fear and worry of challenging a toxic leader. Exercising courage will make you stronger.
  2. "Seeking the leader within and strengthening democratic institutions" – Become independent. Use democracy to foster good leaders and vote out bad ones.
  3. "Demanding leaders who disillusion us" – Toxic leaders spread false comfort through their visions. Instead, embrace reality and live up to the demands of authenticity.
  4. "Kicking the vision habit and the we/they dichotomy" – Be willing to strive without being reassured that you are extra special and that a happy ending is in sight. 
  5. "Drafting the next generation of leaders" – See leadership as a duty, not a privilege.
The best way to repel toxic leaders is to recruit nontoxic leaders. Urge more humble, fair-minded potential leaders to step forward and “accept the valuable inconvenience of leadership.” (Source).

However practice and theory, like Execution and Strategy, often do not go hand in hand. The reality is that the most common means for followers to break the shackles of the toxic environment is to, as the article in CIO Magazine eloquently states,"... decide whether to stay or leave." Which sees me coming full circle to Part 1 in this series. Businesses with ethical cultures generate better returns for shareholders, whilst toxic environments have an adverse impact on the bottom line. Fact, not theory!

Sunday, October 7, 2012

Oxygen: How Is Your Corporate Culture Breathing? (Part 2)

A couple of weeks ago I wrote ‘Oxygen: How Is Your Corporate Culture Breathing (Part 1)’, which focused on quantitative research about the effects a toxic corporate culture can have on employee output and an organisation's performance as a whole.

This week’s follow-up article looks at the signs of a toxic corporate culture and how it affects employees personally.

So just what constitutes a toxic corporate culture?

An academic paper published by International Journal of Leadership Studies, titled from “Toxic versus cooperative behaviors at work: The role of organisational culture and leadership in creating community-centered organisations” (Gilbert, Carr-Ruffino, Ivancevich, Konopaske) provides an excellent summation of defining a toxic workplace: “A workplace may be toxic if: 
  1. mediocre performance is rewarded over merit-based output (Colligan & Higgins, 2006; Doyle & Kleiner, 1993)
  2. employees avoid disagreements with managers for fear of reprisal (Jones, 1996);
  3. personal agendas take precedence over the long-term well-being of the company (Atkinson & Butcher, 2003);
  4. leaders are constantly on edge and lose their tempers often (“Middle,” 2003);
  5. new leaders do not stay long and employee turnover is common; and,
  6. employees are treated more like financial liabilities than like assets (Macklem, 2005), and
  7. bosses routinely throw temper tantrums, make unreasonable demands, scream, and use obscenities (Anonymous, 2008).”
One word springs to mind when I read a list like this - Values. It is clear that when assessing those companies whose culture is defined as toxic, the values of the organisation are either corrupt, non-existent or exist in the world of PowerPoint templates only. In other words values misalignment equals toxicity. In such environments many people choose to leave the organisation. An early 2012 survey by Corporate Crossovers of more than 300 female entrepreneurs found almost a quarter (23%) cited that culture and values misalignment was the main reason they have left their corporate jobs. The results, as demonstrated in the previous post (Part 1) can materially impact the bottom line.

But what about those employees who stay? In a tough labour market, job choice is often limited and hence employees may be unable to resign without the security of a confirmed new job. Employees who continue to work under the stress of a toxic environment risk effecting their health. In a paper titled 'Workplace Stress: 'Etiology and Consequences' (Colligan and Higgins), the authors noting Katherine Macklem's work (point 5 above) state,

"Toxic workplaces are characterized by “relentless demands, extreme pressure, and brutal ruthlessness” (Macklem, 2005). Moreover, employees within a toxic work environment operate consistently in fear, paranoia, and increased anxiety states. Appraisals of threat or harm that arise from both high work demands and over-controlling/harassing environments have been found to be most often stress producing (Karasek & Theorell, 1990; Mausner-Dorsch & Eaton,2000). Employees experiencing chronic work stress have been shown to develop unstable blood pressure, increased cholesterol levels, muscle tension, diabetes, hypertension, ulcers, headaches, substance abuse, and clinical depression. Moreover, their capacity to concentrate and retain information becomes a problem. The employee also may experience significant anxiety, anger, and irritability (Israel et al., 1989), which may affect his or her capacity to maintain interpersonal relationships outside of the organization. Workplace stress has been shown to lower productivity, increase absenteeism, and create pervasive patterns of dysfunction in the workplace (Anderson & Puluch, 2001; Levin-Epstein, 2002). Stress has also led to changes in work habits, changes in personality (or social behavior), and job burnout. It is estimated that disorders related to stress annually claim nearly 10 percent of the earnings from businesses (Dyck, 2001)."

Often we talk and read about corporate culture as though it is merely academic theory in some business school's text book. However corporate culture is very real and a toxic corporate culture very dangerous. As the research shows a toxic work environment not only effects the health of an organisation, as measured by the bottom line, but also the physical health of employees. The evidence clearly demonstrates that it is in everyone's best interest, be they directors, managers or employees, to ensure that a toxic culture is not allowed to develop. So if you think your company's culture is sickly, chances are you may end up seeing a doctor... literally!


Part 3 (Final) will focus on the primary causes of a toxic corporate culture.