5 Steps Leaders Can Take to Avoid Creating a Toxic Work Environment

There is a deep connection between culture and organizational outcomes. When culture is done right, it unleashes tremendous energy, harnessing a diverse set of talents towards shared organizational goals. But a culture that is dysfunctional cripples the organization’s capacity and drives away talent.

While each and every employee plays a role in creating an organization’s culture, leadership has the power to make or break it. Why? Because “leaders bring the weather.” The things leaders say and do signal to the entire organization what behaviors are permitted, and their impact on employees is so great that the behavior of company leaders is often mimicked throughout an organization.

Consider former Uber CEO Travis Kalanick, whose aggressive, win-at-all-costs leadership style created an ethically hazy and toxic culture, resulting in hundreds of complaints and lawsuits against Uber by employees and customers alike. Or the demanding, authoritarian leadership of former Volkswagen CEO, Martin Winterkorn, charged with aggravated fraud by German prosecutors for deceiving regulators about VW’s diesel exhaust levels. Under his reign, the company culture was marked by an extreme deference to authority, intimidation and fear, and a lack of tolerance for dissent.

Toxic work environments aren't always obvious

While the above are flagrant and scandalous examples of leadership gone awry, organizational culture can also be eroded by subtle, seemingly insignificant behaviors, off-the-cuff comments, and even nonverbal behaviors. Leaders don’t have to yell, scream, or engage in unethical behavior to undermine culture. In fact, most of what constitutes culture is tacit and subtle. It comes down to two questions: how does it feel, and how do people relate to each other?

These may seem like soft and fuzzy questions, but how things feel on a day-to-day basis is critical to people’s ability to do good work and, therefore, to the organization’s ability to meet its goals. As an executive coach, I’m often asked by CEOs and other leaders how they can create cultures of engagement, inclusion, and high performance. The answer? Learn how to effectively use your power.

At the end of the day, your culture comes down to a series of behaviors from the leadership team, all of which arise directly from the way they relate to power. This is what matters to people when it comes to culture, along with the organizational costs when they are unmet:

What matters to employeesWhat happens when they’re unmet

  • Can I speak up, ask questions, share my opinion, or challenge others? Will I be criticized or shamed? Is it psychologically safe to participate?
  • Reduced productivity, disengagement, wasted talent, and poor decision making
  • Will I be treated respectfully? Are people rude? Do they gossip? Is there toxicity?
  • High turnover, absenteeism, complaints, potential litigation, and brand damage
  • Will be treated fairly and equitably? Is there preferentialism? Is it cliquish?
  • Discrimination complaints; inability to attract and retain diverse, young talent, and damage to employer brand
  • Do I have opportunities to grow? Am I coached, given feedback and opportunities to evolve?
  • Failure to attract millennials. Turnover.

"Leadership isn't a role—it's a series of behaviors."

The power in a leader’s role gives them enormous freedom to act, while simultaneously magnifying the leader’s actions and behaviors in the eyes of others. This magnifying lens of power, as I call it, amplifies the impact that leaders have on the culture, yet, at the same time, makes it nearly impossible for leaders to accurately see that impact. It’s a Catch-22.

So what’s the key to escaping this trap and using power correctly? To borrow from the American writer and management consultant Margaret Wheatley, “leadership is a series of behaviors rather than a role for heroes.” In the spirit of leadership as a series of behaviors, here are 5 key competencies and behaviors that I recommend to company leaders to help them use power effectively.

5 Steps Leaders Can Take to Prevent Toxic Behavior

1. Make yourself approachable.

Did you know you’re scarier than you think? No matter how open and available you are, power tends to shut people down. Though you may not think about your power, others do constantly. They see you as scarier and more intimidating than you see yourself. According to Amy Edmundson, “The reality of hierarchical social systems is that people hold deeply ingrained, taken-for-granted beliefs that it's dangerous to speak up or disagree with those in power.

Leaders are dependent on the information and ideas others bring. As a result, they can’t afford to have people shut down. To create more engagement from the people around you:

  • Don’t share your opinions first. People automatically defer to the loudest or most senior voice in the room. When it’s critical to get a diversity of opinions, don’t speak first.
  • When you do share your opinions, tell people if those opinions are “hard” or “soft.” I coach a very assertive CEO whose team tends to defer to her. She knows that with her forceful style, coupled with her authority, her team will assume everything she says is set in stone. But when she flags her opinions as hard, those she’s firm about, and soft, ideas she’s less sure about, she creates space for her team to make better decisions in the long run.
  • Reward employees for speaking up. Don’t just allow and invite other opinions, reward them. When people speak up, appreciate the opinion, even if you disagree. When they give you feedback, thank them. Show people there is a positive consequence for taking a risk.
  • Ask questions, seek out other points of view. The less often others speak around you, the likelier it is that you are missing key information. When you show people you don’t have all the answers, you make it safe for others to ask questions as well.
  • Flip the switch from passive to active. Just because you’re not interrupting doesn’t mean you’re actively listening. Letting people speak does not mean they will. Saying your door is open doesn’t mean people will knock on it.  Actively solicit, invite, and take the initiative to get others to engage.
  • Watch your nonverbal communication. People pay close attention to whether you look happy, displeased, or checked out. Make eye contact. Nod when people speak. Get off your device when someone presents. Show them you’re present.

2. Don’t side-step your power.

Some leaders, aware of power’s negative consequences, attempt to minimize their own authority. Yet it always backfires. They avoid making a tough call. They allow people to hijack agendas. They try to be supportive yet fail to hold people accountable. They soften feedback and deprive people of an opportunity to grow.

Not using power is not the same as using it well. It just creates confusion. Leaders undermine team morale when they don’t set limits, let discussions meander, and allow someone to derail the agenda. It’s stressful and chaotic working for someone who doesn’t embrace their authority. The leadership vacuum created by these leaders is often filled by others who will use that power for their own agenda and then create a toxic environment. Make sure to own your power and use it responsibly.

3. Don’t tolerate high-performing jerks.

Why did Fox News pay $13 million to settle sexual harassment claims against news host Bill O’Reilly? Why do companies expose themselves to enormous risk, spend millions on legal fees and payouts, incur bad publicity, and lose good employees and customers just to protect a few bad apples?

The belief that the contribution of a superstar outweighs the cost associated with their negative behavior is widespread yet erroneous. A recent study comparing the costs of keeping high performers versus terminating or refusing to hire toxic workers found that avoiding a toxic worker “generates returns of nearly two-to-one compared to those generated when firms hire a superstar.”

No company can afford the long-term effects created by toxic behavior because toxic behavior spreads. Employees will spend valuable time dealing with the toxic employee, gossiping, avoiding them, or being absent or distracted. The hit to the culture is twofold: the toxic employee undermines the culture, and the leadership’s failure to act sends the message that it condones the behavior. Often employees have complained about the person’s behavior, only to have their complaints disregarded. Make sure you have a no-tolerance policy for uncivil behavior and a way to identify and address these behaviors immediately.

4. Watch out for confirmation bias.

The way an organization handles feedback is critical to culture. In an exchange between Jerry Seinfeld and Barack Obama, on Comedians in Cars Getting Coffee, Seinfeld asks Obama, “How many world leaders do you think are just completely out of their mind?”

Obama, deadpanning, replies, “A pretty sizeable amount.”

“The thing is,” he explains, “the longer you stay in office, the more likely that is to happen. At a certain point, your feet hurt, you have trouble peeing, and you have absolute power.”

Obama’s joke has a lot of truth in it. The higher you climb up the organizational ladder, the looser your grasp on reality. At the top, you no longer have the same conversations you had when you were one of the team. People treat you with more caution and with their own self-interest at play. So you receive less honest feedback. You don’t see the impact of your actions on others clearly.

The result? You are at greater risk of confirmation bias, cherry-picking information that confirms what you think, and ignoring or discrediting anything that challenges what you want to believe. You “buy your own pitch.”

Leaders and their organizations need feedback that forces them to think critically, to challenge their basic assumptions, beliefs, and perceptions of themselves. They need to be surrounded by a culture of healthy debate so they can make better decisions, innovate, and evolve. How do you make sure you’re not falling into self-confirming beliefs?

  • Have regular opportunities for employees to give anonymous feedback. Then act on it, publicly. Share people’s criticism and complaints along with the company’s response to them.
  • If you are in the top leadership team, create a team of personal advisors who can challenge you and bring in new ideas from outside your organization and industry.
  • Train people around you to debate. Make conflict safe and productive. Create a culture of healthy and robust discussion where nothing is off limits.
  • In meetings, create a habit of seeking out the “minority report,” the opposition, doubt,  or reserved opinion that is not being voiced. Assign a rotating role for it.

5. Punch your leadership ticket daily.

Doing all of the above is a great first step. But doing power well is not a ‘one-and-done’ action. You can implement all of these suggestions, but your daily, moment-by-moment behavior can trump even the best designed and executed processes.

During the Vietnam War, U.S. troops captured a young Viet Cong soldier who had switched sides seven times. Frances Fitzgerald recounts this story to emphasize the cultural differences between the sides. To the average American, switching sides is treasonous. But to the Vietnamese soldier, it was a matter of which leader inspired him more.

Just because you earned the office doesn’t mean you’ve earned the trust. If you earn the trust one day, it doesn’t mean it’s valid the next. Authority is not a lifetime ticket; you need a new ticket for each ride. Your actions and decisions matter more than your Values Statement and HR policies. So remember that leadership is a series of behaviors rather than a role for heroes. At the end of the day, the culture of your organization will flow from your behaviors, words, and actions, whether you know it or not.