Are power structures poisoning your culture? Or perhaps your espoused values aren’t lining up with the reality of what it’s like to work in your company. Here are some tips to help HR step in.
In 2018, the Australian public were glued to their TVs each night as the daily proceedings of the Royal Commission into Banking and the Financial sector were shown revealing a series of scandals, including charging fees to deceased people and denying legitimate insurance claims.
And just last year, Canberra was rocked by charges of sexual harassment among staff and even Ministers in the Australian Parliament.
These are just two of the many examples of where normally law-abiding people were caught up in systems of belief that condone this behaviour. But why does this happen?
Toxic workplaces are frequently considered to be the result of toxic employers and/or employees who are motivated by personal gain (power, money, fame or special status), and use unethical, mean-spirited and sometimes illegal practices to achieve their ends.
Organisations that experience this type of toxic and/or illegal behaviour often have a dissonance between their underlying values and beliefs and the norms and conventions of society at large.
Read HRM’s article about what to do when your company’s values don’t align with reality.
So what can be done about it?
The 8 drivers HR should look out for
My research indicates that there are eight major drivers of toxic cultures that leaders, HR managers and people leaders should keep an eye out for:
The potential for power to corrupt is well known. Imbalances in the patterns of power are major factors in changing cultures to become toxic.
For example, in Crown and Star Casinos, illegal practices occurred because of a mistaken belief that their powerful position as a major provider of tax revenue and employment meant that normal rules don’t apply to them.
The dark triad of Machiavellianism – sociopathy, psychopathy and narcissism – is all too common.
Toxic leaders often use forms of manipulation to get what they want, as they must push against resistance arising from entrenched attitudes and fear of change. When coupled with narcissism, where the focus is on the leader and how great they are, the purpose of the organisation becomes subordinated to their admiration and preservation.
Making decisions is invariably based on our values. Our upbringing has much to do with forming our early ethical positions and in particular our sense of entitlement.
A key source of organisation tension is when the way in which performance is achieved conflicts with stated values. For example, a company might preach equality and inclusivity but practice or promote dog-eat-dog thinking when it comes to meeting KPIs.
What wins ‒ values or performance? Toxic organisations subordinate values.
4. Organisational design
So many errors in organisations are caused by interactions across organisational boundaries that are inefficient. This is also apparent when departmental boundaries have become walls, and cliques form that inhibit others from interacting with them.
Onerous rules, when ignored, can become the source of toxic cultures. Rules tend to be based on past experience and may not be fit for current realities.
5. Informal organisation
Personal relationships form the backbone of organisational life. Convention, history and inertia all play their part in shaping the informal organisation, and, indeed, institutional memory is important in maintaining complex systems that have been built up over many years.
When conflict arises between the old and new approaches, destructive underground ways of working arise. Passive-aggressive behaviour and the growing array of toxic games and workplace politics all serve to destroy working relations.
6. Relations with external stakeholders
Relations with external bodies can often become troublesome. A recent example is the aged care sector in Australia, when privatised home care turned from a social benefit into a financial business.
The resulting staffing model moved towards using many more casual employees from the gig economy, who in turn had to hold multiple jobs to earn sufficient income. When COVID-19 struck, they became virus spreaders to the most vulnerable of communities, which suffered the highest number of deaths of any group in the population.
There has been a long history of theories to explain motivation, from Maslow in 1943 to the theory of Daniel Pink in 2011, which identified autonomy, mastery and purpose as the key factors to motivation.
However, some people become seduced by their motivators to engage in activities that are not beneficial to them or others. An overriding motivator used in toxic cultures is fear – fear of breaking the rules, of getting things wrong, of getting fired or of falling out of favour with the boss.
There might be shifting alliances and politicking to gain power and influence; whispered conversations occur in the corridor that are at variance with what is said out loud. People fret and worry about who is up and who is down. High-level executives jockey for position and challenge one another for a favoured role or a plum assignment. No one feels safe and everyone is on edge.
The key to dealing with many of the foregoing problems lies in embedding cultures of psychological safety. This arises when there is a climate of openness and trust such that people are valued, treated with respect and confident that they can speak up when required or call out truth to power.
Rewards may not just take the form of money; power, promotion, influence, fame and patronage can all play their part in creating a toxic culture when a desire for these rewards becomes dominant and overarching for an individual.
In the case of the banks and other financial institutions in Australia, a strong bonus system of rewards was in place. Those who achieved strong performance earned big rewards and became the role models for others, regardless of the way in which they had achieved that performance ‒ the end justifies the means.
5 actions for change
There is an old maxim in organisational development: ’You change the team, or you change the team’. In other words, there are two fundamental strategies to deploy: you change the dynamics of the organisation and how the system works with the players that you have, or you change the individuals in the hope that new people will work in a different way. Both strategies have their adherents and strengths, but both have their limitations.
Too many people have a vested interest in the status quo. Change strategies and processes have to be powerful, comprehensive, inclusive and sustained in order to overcome these barriers, and their absence is certainly one of the reasons why change programmes so often fail.
While every change program will be uniquely suited to the conditions that caused the toxicity in the first place, there are five principal actions which are universal:
- Identify the features of the culture that need to change and a vision of what the ideal should be, translated into behaviours that everyone can understand.
- Clarify responsibilities and accountabilities including performance measures as well as the underlying values – the ‘what’ and the ‘how’.
- Implement feedback mechanisms so key opinion formers are helped to ‘walk the talk’.
- Inculcate transparency in the processes to deter corruption. Give a fair hearing to whistleblowers.
- Ensure people understand the consequences of not living up to the aspired culture. Where there are genuine mistakes, build a style of learning. Where it is deliberate obstruction, take disciplinary action.
Jim Cannon specialises in organisation design and development and has consulted with organisations in the UK, Australia and throughout the world. He worked as a coach to directors and senior executives, as well as mediating and facilitating events designed to improve the effectiveness of Boards and organisations.
This article is based on Cannon, J. (2023) Toxic Cultures at Work. The Eight Drivers of a Toxic Culture and a process for change. Routledge. New York and London.
Prevent toxic cultures from emerging by learning the fundamentals of ethical workplaces with this short course from AHRI.