The long slow death of toxic leadership

Toxic Leadership

By: Phillip Bogdanovich

Your negativity is damaging your company

2017 has been an interesting year. A few friends went public with their startups, a couple have become newly minted millionaires a few times over, and some left startup land for more stable work environments. It’s been a year of change. Unfortunately, not all of the change has been good. I have also seen a few promising companies begin on the path of gradual decline. While it’s true that entrepreneurialism is a difficult endeavor, and that startup land is a volatile place, a number of these companies are beginning to flounder because they don’t truly understand their customer base. Or their industry. Perception matters, and nearly as much as public perception productivity matters. The quickest way to destroy both? Negativity and pessimistic rhetoric.


Science says so

Stress and negative rhetoric

We’ve all hear the adage “You are what you eat”. Well, it turns out “You are what you say” and what others say too. For years neuroscientists, psychiatric care professionals, and behaviorists have touted the importance and far-reaching effects of positive thinking from cancer survival rates to corporate management. Mountains of research very clearly show that everything from physical health to cognitive function are improved when negative stimuli are limited.  In 2001 a manual and case study were released entitled Organizational Stress wherein researchers characterized and studied the effects of stress on workers, subordinates and leaders. Researchers found that in virtually all individuals the effects were psychological, physical, behavioral. In that order. Two things are interesting about this series of studies to me:

  1. Stress is cumulative. Moderate amounts of stress over long periods of time can produce adverse effects similar to single, catastrophic episodes and in fact recovery from prolonged stress exposure can take longer than the recovery from a single isolated event, for example, losing a loved one in an accident versus 10 years of emotional abuse.
  2. Stress will affect those on the periphery of a system. A negative environment in the work place not only effects the workers and the team but also the perception of the company; the company will begin to appeal to consumers the company may not want to be associated with. E.g. being the CEO of a brand and declaring “Death to Hipsters” will begin to attract a crowd with low threshold for inclusion and high preference for homogeneity – read racists/extremists.

Abusive Supervision/Leadership

Abusive Leadership is defined as “the subordinates’ perceptions of the extent to which their supervisors engage in the sustained display of hostile verbal and nonverbal behaviors”. This is where negative behavior – from this point on I will encompass the negative behavior of abusive supervision and negative rhetoric into “bad leadership”- extends beyond words and begins to take physical form.

The perception of abusive leadership can stem from imagery, actions, and non-verbal cues. According to a study conducted by Crystal Farh and a joint team from China and Australia Social Learning Theory, “supervisors who belittle and ridicule workers not only negatively affect those workers’ attitudes and behaviors, but also cause team members to act in a similar hostile manner toward one another.”

When one of those team members happens to be responsible for marketing or branding, the public face of your company and team may take on a negative/offensive/polarizing glare. This is why it’s so important to understand that toxicity in a company isn’t relegated to words. The imagery of a company can create a poisonous brand and that imagery can be directly correlated to the nonverbal cues a leader.

Building a solution

Historical Reference

A commonly accepted fallacy is that Millennials are sensitive and less inclined to manage workplace stress and therefore the rate of workplace dissatisfaction now is higher. Is this true?

In a word, no.

In 1911 researchers conducted a study on Clever Hans the horse who, according to the owner was able to solve puzzles, mathematical equations, and answer questions with a series of hoof taps. Researchers concluded that the horse was responding to the crowd. As the horse’s hoof taps were closer or further from the correct answer to a question the crowd would change tone in a positive or negative way and the horse would respond accordingly. The horse was not answering the question, he was deviating behavior based on crowd response. The behavior was reinforced with each positive outcome, thus leading to answers via hoof taps coming in progressively shorter intervals relative to the question. The horse elicited a response from the crowd which then elicited a response from the horse and on and on.

This study led to a study by Robert Rosenthal and Lenore Jacobson about the effects of teacher expectation on first and second grade student performance. Rosenthal and Jacobson’s study was a 1968 realization of the Pygmalion effect as it pertained to students in a classroom. Students were split into two groups and told that they would do better or worse on a test based on some arbitrary variable. The outcome of the study supported the hypothesis that reality can be positively or negatively influenced by the expectations of others. More can be read on the study here: Pygmalion Effect and the Rosenthal-Jacobson Study.

These studies show that there is a causative effect between the group (employees), the entity (business leadership) and the crowd (customer base). These groups are inter-related and either directly or indirectly affect one another.

Visibility and Access

Visibility and social access are creating a dynamic of accountability that was previously impossible to attain. Social media forums like Twitter and Facebook and sites like Glassdoor and Hoovers provide opportunity for customers to interact directly with businesses and employees to share their experiences and grievances. There is no place for bad actors to hide. When a leader performs poorly, and a workplace becomes toxic, the visibility means customers are immediately aware and can interact and share thoughts, concerns, and on occasion approval of bad behavior in near real time.

Positive reinforcement has always been a thing. The difference between the early to mid 20th century and now is that visibility was primarily internal and limited to interactions between coworkers, leaders and subordinates. Simply put, people who were valued like managers and executives experienced positive feedback, had high self-esteem and excelled where those who were considered of limited value like women, minorities, and low-level and semi-skilled labor were marginalized, devalued, and had low self-esteem and high turnover.

On a societal level, this wasn’t new news to anyone at the time. For instance, bankers were held in high regard and expected to be successful and as a result, bankers held themselves in high regard. Conversely, bank tellers and assistants were considered low level, disposable labor and as a result had high stress over potential termination and low job satisfaction. To put it bluntly, tellers and assistants were undervalued when compared to bankers. Thankfully, this type of noxious work environment no longer takes place in a vacuum and the world has an opinion; even the lowest person on the totem pole has a social support system and the opportunity for recourse.

Identifying harmful dynamics in the workplace

Continuing to turn the tide on bad leadership and shitty workplace environments means being able to identify abusive/negative leadership and team dynamics. Because this behavior is often insidious and covert it may be difficult to identify. People are also tribal and want to fit in, which means at a subconscious level we generally have a desire to avoid addressing poor behavior exhibited by a leader. Aversion to conflict and fear of not fitting in aside, we must remain aware of our environment and for the ultimate benefit of the tribe be willing to address bad leadership and toxicity.

Although I am sure that everyone has their own internal litmus test for determining what constitutes “bad”, some general guideline would be to take action if:

  • The imagery, nonverbal cues, and verbal communication are exclusionary. Does what I’m hearing, seeing, or reading normalize exclusionary behavior in a harmful way? I.e. idolizing all American athletes (exclusive group) versus idolizing leaders of the KKK, Black Panther Party, ISIS (also exclusive groups)
  • The imagery, nonverbal cues, and verbal communication perpetuate hate. Does what I’m hearing, seeing, or reading perpetuate violent behavior or ideology as an initial solution to a problem?
  • The imagery, nonverbal cues, and verbal communication are indicative of a company built to only support the very upper echelon of leadership. E.g. a scheme wherein the behavior and performance of top leadership are reward driven where everyone else is fear-based. The VP level staff and above are given bonuses when they perform well and are advanced in pay and title when they perform adequately versus lower level staff simply not being fired or replaced when they perform well or even exceed expectations.

While there are a number of signs that would indicate that you’re in a hostile work environment, the above is a good, broad outline.

Mitigating harmful dynamics

This really applies to leaders. While everyone inside of a tribe is responsible for the health of the group, the leader, and for the purpose of this post the CEO/founder, is responsible for establishing and maintaining culture.

It’s imperative that as a leader in a company, and especially in a startup, a culture of inclusion, open communication and moral viability is created and upheld. Every decision a leader and subsequently the company makes should be weighed against the pillars of culture: Is what I am about to do, say, write, moral, inclusive, and positive? Is this the company I want the world to see?

It’s important to acknowledge that the world does not separate company leadership from the company. Every executive inside of Enron was an amoral shit bag because the company was committing amoral acts. Right or wrong, this is the perception. This is doubly true of startups. Build the company representative of who you and your staff want the world to perceive you to be. Be accountable and have an open-door policy where team members can approach you without fear of reprisal. Be self-aware. Feeling like you have never fired anyone for disagreeing with you is not enough. Reflect. Have you ever actually fired anyone for bringing an issue to you? If you have, you’re wrong.

Staff has a voice. You as a staff member need to voice concerns before they become cultural issues and the outside world views your company as bigoted, extremist, or exclusionary. Public perception is a great litmus test. If your company is viewed negatively by even a few people while you simultaneously have a shrinking customer base you need to circle the wagons and have a team meeting to figure out what’s going on. There’s clearly a problem. If you find yourself on the outs for voicing a concern, good. You shouldn’t be working for a company or leadership that can’t handle criticism and adjust course. While you need to be respectful, you need to also be honest and forthright. You aren’t doing anyone any favors remaining silent. Consider adopting the mentality of “If not me then who” because if no one addresses problems or makes leadership aware as problems arise everyone could be out of a job.

Finally, the company. Like a grove of aspens, a company is the leadership, team members, and values all intertwined into a living breathing thing. Taking this into account, everyone is accountable to the system and words and ideology like “team”, “teamwork”, “respect”, “diversity”, “group”, “us” and “we” should permeate. If these phrases and concepts are foreign to your business and group dynamics, you better start proactively figuring out why. If one tree in a grove of Aspens is sick the entire forest may die. So goes your company.

Change and success are perpetual

There is no one solution or structure that is right forever. Looking back on what made companies successful and cultures desirable in the 1940’s compared to today signals a massive change in ideology even in brands that are still present like Ford Motor Company and GE.

In fact, business schools such as Harvard Business School, Stanford’s Graduate School of Business and MIT’s Sloan School of business (to name a few, the list is long) have de-emphasized the volume model and emphasized the synergy model. Successful companies in a global economy will experience growth not from how much “real estate” they take up in a given market but how well they diversify and how many partnering companies they profit from.

Considering the synergy model, how can a startup possibly be profitable long-term if the only people it appeals to are a hundred thousand extremists in the United States? They can’t. Similarly, and as indicated above, the world is a far more transparent place where social interactions are innumerably greater than in years past. In this environment, inclusion, progress, teamwork, worth, and personal value have become critical metrics and building blocks of successful company culture. People want to feel “heard” and “valued” and interestingly they want to see that others are heard and valued as well. Under these conditions an isolationist culture where output is valued more than human interaction has no place and will stall or kill a company long term.

Industrialism, volume, output. Those where key metrics in the early and mid 20th century and it makes sense considering America was in the middle of the second industrial revolution, fighting off the great depression, and surviving 2 world wars.  Being a single, massive company was a sign of success. Then we discovered the internet, global commerce, social media, and conscious capitalism and the world changed forever. And it will change again. The synergistic method of globalizing and building a company with morph into something else and the millennial generation will have to adapt to a new generation and way of doing business. Those of us still present in 25-50 years will undoubtedly see another tectonic shift in the business landscape and will be required to adjust.

Such is history. It doesn’t matter if you agree with Millennials now just like no “Gen X’er” gave a shit what any baby boomer thought. It’s their time and they’re going to build the future as they see fit; you better get on board if you want to survive because they are your future leaders, employees, and market base. Be a decent human being and try not to bask too long in the fading light of your former glory.

“We’re living in what I like to call the ‘Thank You Economy,’ because only the companies that can figure out how to mind their manners in a very old-fashioned way – and do it authentically – are going to have a prayer of competing.”- Gary Vaynerchuk

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