Gaining New Insight into Toxic Cultures

I recently wrote about links between organizational culture and The Great Resignation. Today, I’d like to look more closely at the unique impact of a toxic culture. A recent MIT Sloan Management Review analysis found it was 10 times more likely to drive turnover than compensation. In fact, it was the single best predictor of attrition during the first six months of the Great Resignation.

What defines a toxic culture? Rather than depending on companywide average results, MIT Sloan School of Management researchers analyzed culture at the individual level. They looked at 1.3 million Glassdoor reviews from U.S. individuals employed at a sample of large organizations from 40 industries. Of many attributes, these emerged as the top Toxic Five:

• Disrespectful – creating the biggest negative impact overall
• Noninclusive – including gender, race, sexual identity and orientation, disability, and age
• Unethical – failing to comply, for example, with applicable regulations such as Occupational Safety and Health Administration standards
• Cutthroat – actively undermining others
• Abusive – being hostile such as yelling, bullying, or belittling employees

What are the costs of a toxic culture? For starters, an Australian population study found that a toxic workplace triples your risk of depression! In addition, injustice in the workplace increases the odds of a major disease such as diabetes or coronary artery disease by 35 to 55 percent.

The company, too, pays a price for its abusive environment. Replacing an employee can cost up to twice their annual salary. And with company reviews in cyberspace for all to see, a toxic employer finds it much harder to attract candidates. Nearly three-quarters of prospective employees in the U.S. will apply only if the company’s culture aligns with their personal values.

What can you do as a leader other than not create a toxic culture? First, don’t look away. It may be tempting to think that a toxic culture applies only to organizations that are known for abuse. In other words, it’s somebody’s else’s problem! Unfortunately, the facts indicate otherwise: On average, the MIT Sloan review found that 1 in 10 American employees in large companies made comments about toxicity in their Glassdoor reviews between 2016 and 2020.

A place you might begin is by assessing culture at the level of individual leaders. It’s critical to recognize that they may create separate cultures within your organization’s overall culture. Also, consider these other strategies for repairing toxic culture from the top down:

1. Ask for feedback and assess the impact, but don’t stop there: Take action. By doing so, you draw a red line in the sand between what’s tolerated and what’s not.
2. Consider a third-party coach or facilitator. Making this investment to identify root causes of toxicity speaks volumes, may lend a greater degree of objectivity, and can be incredibly helpful, especially for those who don’t trust their HR department.
3. Put your new policies in place, and hold all accountable. Lead by example and consistently communicate these new goals – and you may find that the “nonplayers” become more isolated, ultimately finding their way to the door.
4. Continue to cultivate a safe environment. Some leaders find that an anonymous whistle blower hotline is incredibly helpful in getting employees to be more forthcoming with their complaints. Make sure its existence is widely promoted. Finally, act with integrity and take responsibility each and every day to hold toxic individuals accountable for their actions.
5. Make sure your organization has a Diversity, Equity, and Inclusion committee, policies, and programs.
6. Lead by example as mentioned above in #3, modeling many of the positive leadership traits we have discussed in the past. And when you witness toxic elements or activities, take swift, visible, corrective action so you begin to rebuild trust.

A lot of work? To be sure, but so much better than the alternative!

Lead well out there!  Renee