Does it matter if your business culture is toxic?


As Mr Bezos heads into space he leaves behind a company whose commercial success is not seriously in doubt. When Amazon’s founder stares at the earth rotating below, you can understand why he might have little patience with criticism about his company’s culture.

Yet for all its triumphs, Amazon has workers complaining about everything from work stress due to demanding performance quotas, to working in isolation. A 2019 report for example, found over 180 emergency calls came from nearly 50 Amazon warehouses all suffering from mental health issues. And during the pandemic the company fired staffers who complained about worker safety in warehouses.

As for the banks, they too enjoy juicy financial returns, with the top staff on fulsome salaries. Again, it’s hardly surprising that Goldman Sachs, one of the most successful has reports of employees talking callously about ripping off their clients and sustained criticism of excessive working hours.

But do these negative signs matter? Aren’t these merely the cost of bringing in appetising profits and the unavoidable price society must expect to pay for “success”?

Not according to Mark Carney, the now ex-Governor of the Bank of England. In that previous role he surprised city big wigs a few years back with dire warnings about the importance of the social contract that all organisations need to survive.
Carney’s point was that the damage you may be causing to those around from your toxic culture can prove deadly in the long run. No amount of profits justifies running a business with a toxic culture. It’s important for leaders to keep checking on just how good or bad their company culture has become.

More recently, one of the world’s most successful investors complains that too many UK asset managers remain obsessed with short-term performance rankings, while fearful of taking risks. James Anderson who made winning early bets on high-tech companies asks:

“Why is it that people are happy to take high pay for relatively undemanding things, but they don’t dream of creating “truly great companies?” By truly great companies he means ones that don’t just pull in the profits, but have longevity and sustainability.

When it comes to banking, Carolyn Rogers, secretary general of the Basel Committee on Banking Supervision argues that it’s time to step up efforts to tackle persistent culture problems, warning that, if these are not addressed it could trigger “large scale failures.”

Banks have long been in the spotlight over dubious behaviour, lack of diversity and toxic cultures. Numerous so-called prestige banks have been castigated by regulators, and some like Deutsche have suffered substantial fines over bad banking practice.

Elsewhere there are numerous signs of toxic cultures holding back the long term success of otherwise sustainable and society enhancing enterprises through for example risk aversion, lack of diversity, and poor engagement levels.

Despite consistent research showing how critical employee engagement is for both company culture and commercial success, too few senior managers take creating engaged staff engagement seriously. US polls for instance show around a third of employees feel disengaged with their work.

The situation is even worse in the UK. A 2018 survey found that only 8% of UK employees were engaged with their work. Yet in that same year over 400 business directors voted employee engagement as the most significant issue going into the new year.

No Quick Fix

In our work on corporate culture we often start by asking awkward questions about the levels of staff engagement. Many clients start their dialogue with us by admitting that their levels of staff engagement remain unacceptably low and wonder what together we can do about this.

The answer is seldom a quick fix. Changing cultures is a demanding marathon not a sprint. It implies helping managers develop their potential to listen, to show empathy, and to learn how to inspire people through their daily interactions.

We describe this route to better performance and less toxic cultures as VIDI. This stems from the Latin for “seeing” and stands for seeing how to help employees feel Valued, Involved, Developed and Inspired. When working with clients on culture and de-toxifying their working environment, what exactly do we look for, what’s the evidence of toxicity?

First in the list of what makes a toxic business culture is high staff turnover. Where it occurs usually something is going wrong—anything from bullying, to poor, and uncompetitive pay; from lack of listening, to over-demanding expectations about personal performance and unachievable, or even undemanding goals.

Secondly, deadlines are usually claimed to be important. Yet further questioning may reveal that they are regularly missed, or allowed to slip. Poor communication and missing core values also underpin decision making as part of a toxic culture.

Less obvious signs of toxicity can be excessive gossip and damaging absenteeism, with people often arriving late to meetings. Another sign is people not feeling inspired by what they or the company are doing.

Helping practising managers get to grips with the mechanics of inspiring people is one of our greatest challenges as a partner, since doing something about this depends so much on affecting a company’s entire culture. Most senior managers for instance, know they should be a source of inspiration. Yet frequently they lack the tools to make this happen consistently.

Finally, part of tackling an adverse company culture is helping people find their voice to speak up when they experience bullying. Here team-working programmes can help counteract some of this toxicity.

In essence, tackling a toxic business culture reflects our own company’s mission of bringing more humanity to employees’ lives. When we’re invited in by leaders who want a change in culture they tend to mean they want their people to change. Rather than looking at their own behaviours and how their leadership discourages such changes.

Andrew Leigh is a Co-Founder of Maynard Leigh Associates, a leading UK training and development consultancy.

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