But what is a toxic culture? Well, it’s one that damages employee well-being. Its symptoms include the rampant spread of rumors or gossip, lack of trust in management, and a strong resistance to change. This kind of cultural problem is as likely to affect large, successful businesses as it is to affect start-ups. Here are some examples of how companies have failed the culture test.
While every business owner knows that making money is crucial to operations, focusing on the bottom line above all else is a fatal mistake. One investment management firm found this out the hard way, according to the New York Times. As one employee said,
“The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”
By replacing a company culture built on honesty and helping clients with one focused on unloading bad assets, the company soon found itself in trouble.
It’s common for businesses that have experienced long-term success to play by the formula. But when new challenges enter the marketplace, that won’t be enough.
Take the example of Kodak, which failed to adequately respond to the introduction of digital cameras. Video rental giant Blockbuster went under after Netflix changed the game. And Amazon has buried physical bookstores across the country by dominating the e-book market.
It’s difficult to breed a culture of innovation that survives in the long run. One thing companies can do is encourage risk-taking. If an employee knows the company will punish failure, they’ll keep doing whatever they’ve done in the past.
If you don’t know what your company culture should be, chaos is the inevitable result. Take this example of a large department store chain. New leadership was supposed to fix a range of problems, but a lack of vision caused troubles from the start.
One major issue was the shift from a culture of transparency to one of opacity, according to Business Insider. One executive who worked during both eras said, "Corporate culture is very different than it was one year ago. There is no protocol or process in the company anymore. The direction given on product changes very frequently."
There were also reports of corporate employees not being given any space to ask questions or learn about what was happening in stores. These directives can be fatal to a culture of open communication.
Expecting too much from employees is a killer for creating a positive work environment. One retail electronics giant appears to have held employees to an absurd standard, according to SB Nation. Employees who made little more than minimum wage were yelled at by supervisors like “they’re brokering million-dollar deals.” One employee mentioned,
“Sometimes we’d be individually picked out and shamed as people whose sales numbers weren’t good enough for them. I still remember a woman crying in front of everyone and leaving in embarrassment.”
Employees were expected to arrive at work on Black Friday at 4:30 a.m. and work more than 15 hours. Managers were also treated poorly, often working more than 70 hours a week.
Creating a strong workplace culture that values innovation and strong relationships at all levels is a challenge. Avoiding these kind of mistakes is only the first step.