Four Signs your Company Culture is Toxic

Do your employees experience Happy Mondays or do they dread the beginning of the workweek?  Work can be challenging, fulfilling, and mostly fun, if organizational leaders have created a vibrant company culture.  A vibrant culture is created when leaders identify a purpose higher than just making money and connect their team members’ values to the work they do.  A toxic or defensive culture is created when you treat people with disrespect, tolerate negative behaviors, act distrustfully and/or hold people to extremely high standards without giving them the resources to attain them.

As I think back on my work career, there have been times when I dreaded and times when I was excited to go to work on Monday mornings.  My best work experiences have always been at companies where I felt appreciated, stimulated, held accountable to high standards of performance while given the resources to achieve them and where I felt like we were doing something to make the world a better place.  

​Do you have a toxic company culture?  Here are five signs to look for along with remedies for each situation:

---

1. High turnover, especially of your good performers

We operate today in an economy of near-zero unemployment, making it easy and attractive for your best performers to leave one company for another.  This can be devastating to a company, as hiring new team members is costly both in hard dollars (such as recruitment and training costs) and soft costs (like customer and employee satisfaction).  If you have an unusually high turnover rate, especially among your good performers, it’s time to look at your culture.
Remedies:  

1. Conduct exit interviews of employees.  It is often helpful to have a third party conduct the interviews to obtain the most honest information.  As a consultant, I’ve interviewed recently departed employees and found they were extremely forthcoming with me, perhaps because I was an external resource.  
2. Conduct regular, anonymous employee satisfaction surveys.  Many successful companies run annual, in-depth employee satisfaction surveys and follow-up with quarterly, shorter pulse surveys.  It’s very important that the anonymity of the respondents is guarded to encourage honest feedback. In these surveys, many companies set a Net Promoter Score (NPS) target that helps them keep track of the culture.
3. Invest in leadership development and hold your leaders accountable to values-based behaviors.  Leadership training is best for group exposure to new concepts and level-setting behavioral expectations.  Leadership coaching, on the other hand, involves both group and one-on-one accountability, and is the best method to hold individual employees responsible to the new behaviors that the training has introduced.  Be courageous in holding leaders accountable to the behaviors that uphold your company’s core values. And don’t be afraid of terminating someone who cannot comply with behavioral norms. This is often the best way to start a cultural change.

 

1. Good strategic plans fail to be implemented

I once interviewed the CEO of a mid-sized company and asked him what his greatest challenge was.  He replied, “I used to spend money on consultants to help us create intricate strategic plans for the year, but inevitably we’d get to the end of the year without accomplishing any of the goals.  I finally realized it was the culture of the organization that was holding us back. It was all about the people and how they were working together.” His company had put tremendous resources into creating strategic plans, but they didn’t pay attention to the people dynamics in the culture that could hinder or help them achieve their goals. He sought out my firm to measure the culture and create a transformation program that addressed many of the causal factors.  Activities included purpose and values creation, leadership development and coaching, and process upgrades.
Remedies:

1. Audit your culture regularly, using instruments that measures the values and behaviors of the organization.  Company climate indicators, which measure tangible aspects of your company such as employee engagement, are helpful to identify specific actions to influence the culture, but don’t directly measure culture.
2. Develop culture transformation initiatives that define values and purpose, identify behavioral norms that uphold values, provide leadership development training and coaching, initiate process revisions and revise people practices.
3. Examine your compensation programs to ensure they are based on values-based behaviors and equally reward both team and individual accomplishments. For instance, often sales departments are compensated on metrics that motivate self-centered rather than team-oriented behaviors.  This wreaks havoc amongst the members of the team, causing both financial and employee retention problems. Money speaks, so it is worthwhile to revise reward systems to bring them into coherence with core values.

 

1. Lack of cooperation between departments

As an executive at your company, do you find yourself refereeing disputes between departments?  Or do you notice company processes that breakdown when work is passed from one group to the next, resulting in re-work and customer dissatisfaction?  These issues are signs of a dysfunctional culture.
Remedies:

1. Revisit the core values of your company and the behaviors that support them.  Talk with your co-workers often about how the values govern interaction between team members and groups.  
2. Convene meetings to revise work processes, especially at the critical handoffs between one work group to the next.  Create flowcharts, checklists and quality assurance steps to document your best practices. Lean Six Sigma methodology is a good reference point for this work.

 

1. Unhappy Mondays

This is a qualitative indicator that can be measured just by looking around the office.  Do you sense a generalized low level of energy on Monday mornings? Do your team members call in sick on Mondays more often than other days?  Does productivity suffer on Mondays as people come back to work? Do most of your team members leave at 5:01 each night, while you stay at your desk until 8:00pm?  If yes, these are symptoms of a possibly toxic culture.
Remedies:

1. Measure your current culture and identify the factors that contribute to an unhealthy atmosphere.  Envision an ideal culture that produces positive outcomes.
2. Initiate a long-term transformation program that addresses issues discovered in the culture audit.
3. Identify quick wins you can accomplish within 3 months to create momentum and enthusiasm for your culture transformation.

Cultural transformation is possible, and many companies have accomplished outstanding results in their turnaround efforts. However, cultural transformations are not for the faint of heart or the impatient.  Cultural change typically takes 18 months of intense work for a small company and years for a larger companies.  Using the remedies outlined above, however, you can inspire team members to be involved in the transformation process and have a stake in its outcome.  You can have Happy Mondays at your company.

Kristin Robertson is the Happy Mondays Coach, whose purpose is to ensure that your employees love to go to work on Monday mornings.  She is certified by Human Synergistics to conduct both the Organizational Culture Indicator and Organizational Effectiveness Indicator, which have been used by thousands of companies to transform their culture.  Her breadth of experience in culture transformation, leadership development and executive coaching make her the perfect partner for a company culture turn-around.