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Managing Cultural Toxicity: Lead the Change or Perish


Lead the Change or Perish

In January this year, the MIT Sloan Management Review published some fascinating results from a study conducted in 2021. It explored the reasons for the Great Resignation that had swept through the world just as the pandemic subsided. The analysis of 34 million online employee profiles revealed that the primary reason for the 24 million resignations in a six months period in America was not failure to recognise performance or work-life balance. Instead, the data showed that employees leave companies 10.4 times more often because of a Toxic Culture than they do for compensation reasons for example. 

If an employee is 10.4 times more likely to quit because of toxicity in the workplace, it clearly becomes imperative that leaders prioritise managing this toxicity. It is also inevitable that if the unhealthy culture within the organization persists, those who remain will adapt to it. To make the situation even more complex, the study found that 73% of job seekers in the U.S. apply to a company only if its corporate culture aligns with their personal values. So on top of everything else, the company will also struggle to attract new talent if it doesn't take care of the problem.

If these are not reasons enough, consider the fact that financial cost of failure to tackle the issue (the U.S. Bureau of Labor Statistics report estimating the financial cost of employee turnover due to workplace culture over the past five years, at a staggering $223 billion) may well enough to not just lose the leader her job and destroy her legacy, but cause permanent damage to the organization's future in the industry. 

Gallup, in its just published State of the Global Workforce 2022 report, helpfully breaks down what factors actual influence employee feeling and behaviour towards their workplace and employer. Since as leaders we often need to look at our people in the context of where they are located, the regional findings are eye opening to say the least. 

South Asia for example has the largest percentage of the workforce in the world reporting they are treated with disrespect by their managers, at 19% against a global average of 11%. This, combined with the fact that a staggering 89% of the workforce reported they are not thriving in terms of their life evaluation, compared to 67% globally, means leaders in South Asia need to pay particular attention to their employees and exposure to toxicity in the workplace, given the employees are in a very vulnerable mental space in any case. 

But the problem is not South Asia's alone. Another recent MIT Sloan report confirms that disrespect (defined as 'lack of consideration, courtesy, and dignity for others) is by far the greatest contributor to toxic culture among firms globally. This is followed by non-inclusivity, a direct comment on lack of diversity in teams (straddling gender, age, disability, and nepotism). 

All these factors make it inevitable that leader must act, and quickly. But how?

The Leadership lessons that can help us do this, often come from observing the experiences of elite sports. The high pressure adrenaline surging win-at-all-cost atmosphere of elite sports teams, bring these behaviours to the surface very quickly, and not managing it, can be a very expensive choice. Leaders (coaches or captains as the case may be) who are successful over long periods of time, follow a few golden rules that apply to all teams, whether in sports or business:

Initiate Difficult Conversations - A leader’s ability to address team conflict is crucial to successfully resolving toxicity. Good leaders keep their eyes open for the red flags, and as soon as they are apparent, the initiate those difficult conversations, even if it is with the superstar who helps them win most often. As we pointed out in last week's article, a toxic Galactico may bring you short term success, but not managing the situation, is a guarantee for long term failure. After the Sandpaper episode when cameras proved leadership induced on-field cheating, Australian cricket needed to have those difficult conversations and ban its superstars, Steve Smith and David Warner, in order to change its toxic culture. In the process its immediate future was derailed. But if it had not been addressed, the permanent damage could have been catastrophic.

Focus on Promoting Accountability - Once a leader initiates the crucial conversations, team members must join in and take responsibility for their roles in causing team toxicity. It is far easier to blame and judge others than to look at one’s own contribution to it. Elite sports teams often call players-only meetings to turn around losing situations, raise morale, and rebuild teamwork—without the coach making them.

Bring in Professionals to Help Address Issues - There is no shame in seeking help to address an issue in a team you lead just as there is none in seeking professional help for personal issues. If a leader believes the bad behaviour is being caused by unmanaged stress in an individual or a group of individuals, a Mental Conditioning Coach or a Psychologist can be roped in. This might help resolve the problem without having to remove the person causing it, from an otherwise well rounded team.

Invest in a Shared Vision for the Future - John Wooden, the legendary college basketball coach who achieved such success at UCLA, often told his team: 'promise to forget the mistakes of the past and press on to greater achievements in the future.' In resolving toxic situations, once other measures have been taken, everyone needs to move on from the past. It is the leaders job to ensure this happens by creating a shared vision for what the future of the team looks like and getting everyone to buy into it. It is the surest way to build the foundation for team success. 

Toxicity is not permanent, but its effect can well be. As leaders, our choice is binary - lead the change, or perish. In the end, it's not really a choice, is it? 

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