The Cure for a Toxic Corporate Culture

5 Strategies to Repair toxic corporate culture

I recently saw a meme that wonderfully summed up the concept of a toxic corporate culture: How do you feel on Sunday night about going to work on Monday? It’s such a visceral question.

When you think about corporate culture, it can seem like such a broad topic. But it really comes down to this–how does work get done in an organization. Culture actually has two parts. The big “C” is an organization’s mission, vision, values, competency models, and everything else the company talks about, publicizes, and espouses. Then there’s the “little c” component of culture. This is the reality of how work really gets done and how people really feel about their workplace.

Companies should care about both the “big C” and the “little c” always—but especially now. So much has changed in the workplace since the pandemic. In fact, one could argue that there is an all-out war for talent. It’s hard to retain people. People are hungry for the optimal hybrid experience – they want the best of working from home and collaborating at the office. Meanwhile, companies are scrambling to make up lost business and revenues and they are dedicating little time, energy, or attention toward training development.

The takeaway is that companies must be intentional and discerning about creating their cultures. The big C and the little c need to be better aligned if companies want to attract top talent, get positive reviews, grow market share, and be recognized for being responsible corporate citizens.

The disconnects between an aligned and healthy “big C” and “little c” can lead to a toxic corporate culture. Elements of this include:

5 sure cures for a toxic corporate culture

  1. Help cultivate “psychological safety”
  2. Give HR a seat at the table
  3. Help create positive micro-climates
  4. Foster a feedback-rich culture
  5. Understand the role of emotional intelligence (EQ)

1. Help cultivate “psychological safety”

Having psychological safety in the workplace should be a mandatory part of a company’s corporate culture. Research shows that when employees have it, they are 76% more engaged, 74% less stressful, 57% more likely to collaborate, and 50% more productive. However, only 26% of employees feel psychologically safe at work.

Everyone needs psychological safety. People need to know that it is safe for them to speak up if they see something wrong. They need to be able to advocate for their unique talents, interests, and abilities. They need to know that they can fail when they try something new and not be fired.

The good news is: I genuinely don’t think the disparity is due to maliciousness. People generally have good intentions, plus leaders want to make sure they are checking the right boxes. But creating an environment of psychological safety takes vision, time, energy, and resources. And HR and L&D Professionals are overwhelmed by the realities of labor shortages, talent wars, and supporting people in a chaotic time. Creating a culture of psychological safety is just another thing to do.

But changing a culture is difficult. If you don’t bake into your metrics what you expect from a behavioral perspective, you won’t get the change you want because business is moving too fast. There is no incentive to change. The metrics that get measured are the ones that people pay attention to.

Therefore, the first question you need to consider is the degree of psychological safety in your workplace, then you can figure out what you are going to do to measure it. Finally, you can determine how you are moving the needle.

2. Give HR a seat at the table so a toxic corporate culture is not enabled 

Although this has started to change in the last decade, human resources departments don’t always have a seat at the executive table. When that happens – they don’t help set strategy. That can be a detrimental oversight if talent is a competitive driver, and really, when is it not? If you’re in an industry that is in the middle of a talent war or suffering from a labor shortage, you’re suffering from a mismatch between intention and impact.

If a company is serious about its strategy, it must have people from HR and L&D at the table. Their job is to discover and share what motivates and incentivizes employees. Then the company can experiment in cultivating desired behaviors for an optimal culture.

3. Help create positive micro-climates

I’ve often seen companies allow bad behavior in extremely good performers—especially in roles that directly impact revenue. I once had a client say to me, “The more money you bring in, the more of a jerk you’re allowed to be.” These people are like bulldozers–they make a lot of money for a company but are allowed to leave a trail of bodies behind them. This should not be tolerated and creates several bad precedents.

A bulldozer role models bad, if not, unethical behavior. Let’s say the person is a regional sales director. People in that vertical will look at their behavior and say, “I have to imitate this if I’m going to be successful.” This corrodes a corporate culture from within and can create equity problems.

There’s also a significant disconnect between the way internal and external consumers are treated. This situation is untenable, and there is a spillover effect, meaning that everyone eventually gets treated poorly.

What should companies do in this situation? One suggestion is making part of the bonus plan contingent on how their team evaluates them. If you tie things that matter to behaviors you want to see, you can start to impact individual behavior and ultimately, organizational cultures. The ultimate impact is the engendering of good teachers, good mentors, and good partners – people who prioritize the balance of accessibility and accountability.

Leaders must create positive micro-environments across the organization and not enable toxic corporate culture. Otherwise, they’ll always be looking for new talent and wondering why their retention rate is so poor.

4. Foster a feedback-rich culture

Sometimes people have no idea about the impact they’re having. It’s usually because they haven’t been given feedback. In many corporate cultures, feedback isn’t given because people feel too rushed or people don’t know how to deliver effective feedback. More often than not, it’s not welcomed because it doesn’t feel good to the receiver. That’s because the same part of the brain that gets activated when you feel pain also gets triggered when your feelings are hurt.

When people get feedback, their typical reaction is one of defensiveness, frustration, sadness, or anger. A second reaction—the emotionally intelligent one—is to listen. Listening does not need to mean agreement. It means reflecting on what you are hearing. In those conversations ask yourself, could this be true? When might this be true? What is the value of this feedback? How can I use this?

Very few organizations put the energy into giving people the tools to receive feedback. So you end up with a whole group of people not giving feedback and a whole group of people who struggle when they receive it. This destroys the “little c”, along with engagement, performance, loyalty, and everything else.

On the flip side, being able to give and receive feedback allows us to really connect. It reminds me of something Henry Ford said: “How come when I ask for a pair of hands, I get a human being as well?” I take it to mean that humans don’t run like machines. That’s a good thing, because machines aren’t creative, inspired, or possess any other virtues that are essential for success.

5. Understand the role of emotional intelligence (EQ) in a toxic corporate culture

In my opinion, people often have an incorrect understanding of emotional intelligence (EQ). When I first shared with friends that I had taken a role in an emotional intelligence company, I was asked by several people some version of the question: Do you just sit around in a circle with people, holding hands, and crying? My answer: not usually. (Reality: not ever).

Emotional intelligence is a set of skills. It is about building acumen and knowing how to motivate people. It’s understanding that everyone has emotions, and if you don’t acknowledge them, you have no influence over their behavior. It you aren’t recognizing and managing your emotions, they are likely managing you.

Emotional intelligence is a foundational competency that every employee needs to understand.

If companies want their people to show up like owners instead of renters, they need to cultivate their emotional intelligence so that the entire culture is emotionally intelligent, not just a select few.

Our world is changing, and companies are realizing that that employees who have emotional intelligence is not a nice to have–but a must have in order to keep companies from having a toxic corporate culture. HBR recently ran an article on this. Companies are increasingly seeking emotional intelligence as a mindset and skillset when they write their job descriptions. They want employees—from the top of the pyramid to the bottom—to demonstrate that they have emotional intelligence. That they care about people’s lives outside of work. That they are holistic, integrated individuals.

By incorporating these elements of organizational culture, you can help make a positive difference at your workplace. And who knows, it might just make those Sunday’s not quite so scary.

By EVP of Applied Research, Dr. Maggie Sass

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