The reality is that culture does “eat strategy for breakfast’, and moreover has damaging consequences for corporate reputations.
Consequences of corporate culture have seen billions wiped off the market value of organizations such as Uber (Uber $2.6 billion, 2017); facing multi-million dollar fines for misconduct such as Wells Fargo and ING Bank; defrauding millions of customers by deliberately manipulating product information (VW); and tolerating senior executives for bullying or sexual misconduct (WPP), and so the list goes on.

Whilst one survey found that 94 percent of executives believe that workplace culture is important to business success, there remains scant discussion about how to address the toxic side of culture. This toxic side is usually described in the above organizations as having a few bad apples.

Should there be an early warning system to identify signs of organization culture toxicity? We think so.

Whilst most observers agree that culture is critical for a successful corporate reputation, there is typically a mismatch between what is said and what actually happens. For example, whilst tone from the top is deemed important, a recent study revealed that CEOs don’t see cultural problems, but their employees do. For example, when asked about employee behaviors that were counter to the culture values and behaviors, there was a mismatch between what the CEO thought to be a problem versus the rest of employees by 44%. Some of us may have experienced workplaces that were toxic or have known colleagues and friends who complain of a toxic work environment. Generally the fault of the toxic workplace culture is landed to individuals or to a few managers. On this basis the culprits are described as bullies or sociopaths who are motivated for personal gain (wealth, social status, fame, power).

Toxic workers do not recognize a duty to the organization for which they work or their co-workers in terms of ethics or professional conduct toward others.
Toxic workers define relationships with co-workers, more by organizational structure, and by co-workers they favor and those they do not like or trust.

Former employees of Wells Fargo tell NPR that a toxic high-pressure sales culture at the bank drove some workers to deceive customers and open unauthorized accounts — even in the bank’s own headquarters
building in San Francisco.

Wells Fargo is embroiled in a scandal for taking advantage of customers by opening as many as 2 million accounts without their consent. The bank fired 5,300 mostly lower-level workers over the wrongdoing.

That is a lot of so-called ‘bad apples’. The senior leaders drove a culture that pushed individuals to deliver on cumulative sales targets. If an employee didn’t meet the daily target then they were added to the next day. Relentless, driven, and hard-nosed, the focus was on sales targets at the expense of the customer needs. Wells Fargo’s website states that “culture is the attitude we bring to work every day — the pattern of thinking and acting with the customer in mind. It’s the habit of doing the right things, and doing things right.” If they had followed their espoused corporate culture, they may have avoided the largest penalty, $185 million, since the Consumer Financial Protection Bureau was founded in 2011.

Should organizations be able to detect potential toxicity through an early warning system.

We think so.

Our Zuhra Toxic Quotient© (TQ) uniquely measures and assesses levels of toxicity and enables you to target the right interventions in the right place at the right time.

Click here to download the Toxic Cultures PDF