5 Warning Signs of a Toxic Company Culture (& How to Fix It)

A good company culture can make a tremendous difference in your morale – and your results.

According to the Gallup Engaged Workplace Study, 87% of employees worldwide are not engaged at work. Many people are actively disengaged, doing the bare minimum to endure their jobs. That has a profound negative effect on people around them and on the organization at large.

On the other hand, companies that foster a highly engaged workforce are at a huge advantage compared to industry peers. They can achieve productivity that outperforms others by more than 140% per share. That represents a truly monumental amount of annual revenue potential.

And the difference all comes down to company culture.

Company culture is made up of all the tangible and intangible elements that come together into “how things are done” at an enterprise. It encompasses everything from formal policies in the employee handbook to the “unwritten rules” nobody actually talks about.

Company culture also includes – and affects – the relationships between all co-workers.

In short, when we talk about company culture, we’re really acknowledging that a workplace is a social environment as complex as any other. When we discuss making positive adjustments to that culture to achieve workplace goals, we’re discussing a feat of genuine leadership.

You can’t get people to change who they are, especially not overnight. But you can motivate them to change the way they relate to one another when you update the factors that influence your company culture. A few concrete examples will make this much easier to understand.

Let’s look at some major problems with company culture and how you can resolve them:

1. High Turnover, Absenteeism, and the Lack of Trust These Create

Solution: When leaders are pursuing tough stretch goals, it’s easy to forget that there’s only eight hours in a day. In fact, overtime and constant hounding after work hours are likely to drag down productivity and provoke resentment.

According to Harvard Business Review, long hours are likely to backfire on employees and their employers. If your team is fraying at the edges, then look to the hours people are working and the goals or the quotas they’re expected to meet.

Also look at the way management communicates its expectations. Are you pushing a culture of “work-devoted superheroes” who feel they need to pretend to be available 24 hours a day, seven days a week or face stiff penalties? That way lies madness, so set the tone by pulling back.

2. Rumors and Other “Petty” Behaviors Are Undermining Team Cohesion

Solution: If team members seem to be sniping and backbiting constantly, odds are good they’re not on the same page about their goals or values. It’s time to lead by example and show them what open communication really means before the situation gets worse.

First and foremost, make sure basic feedback mechanisms are in place to ensure employees can air their grievances before they turn into petty rivalries. Two-way communication is key. That should also include weekly meetings and regular one-on-ones to keep team members on track.

Second, look at the company’s values and the ways they’re expressed (or not expressed!) in your day-to-day. If you don’t have formal company values or a mission statement, it’s time to bring everyone together in one tent to hammer that out as an “all hands on deck” effort.

3. Top Performers Are Actively Seeking Jobs Elsewhere and Moving On Fast

Solution: According to research from the Boston Consulting Group – considered the #1 most prestigious management consulting firm of them all – appreciation for your work is “the most important single job element for all people.”

Wow! That tells you something absolutely crucial about company culture.

If your enterprise is not making people feel valued for what they do, they’ll look for another employer who will. Feedback shouldn’t just be about what people can do better, although that is valuable. They should also receive positive reinforcement for what they do well.

Remember that everyone appreciates positive feedback in a different form. Some would rather be acknowledged in private. Some appreciate a card. Some wouldn’t mind if their achievements are mentioned to their workgroup. Tune in to each individual’s communication style.

Of course, you should also have company-wide awards and recognition people can vie for.

Not everyone will strive to win the fabulous new car or the trip to Tahiti, of course, but it’s good to have something to aspire to. Friendly competition can also help, but it can only be healthy if the company culture as a whole is firing on all cylinders – so, work on creative incentives last.

4. Initiatives Keep Missing Their Targets; Explosive Blame-Spreading Follows

Solution: As with turnover and absenteeism, you should start by assessing whether the goals you set are realistic for your team. Do you have enough personnel to handle the load? Do you have the skills and knowledge capital you need? What about the tools and resources?

With those obvious culprits out of the way, you need to listen, validate, and find solutions with team members. There are too many possibilities for you to pull one out of a hat: Just as with your customers, your best results will come from getting detailed, actionable feedback.

You have options:

• One-on-one conversations to get everyone’s assessment of the issues at hand.
• A town hall meeting that includes HR, executives, and the community at large.
• Blind surveys that allow the players to offer their feedback in anonymous form.

5. Employees Are Not Developing Their Skills or Leadership Capabilities at Pace

Solution: Some companies are tempted to avoid investments in their teams’ skills because they feel this tempts people to move on to greener pastures with their new certification or degrees. This misses the forest for the trees, since the reverse is much more likely.

When you make a sincere investment in your workforce and give team members new leadership opportunities that suit their growth, you are positioning them for a long-lasting career with you. Like your best customers, they’ll feel like you’ve been a vital part of their journey.

A Last Word on Company Culture: Remember, Leadership Begins at the Top

Company culture is a fickle thing, but it can evolve when the right leadership is in place.

People don’t generally leave companies – they leave bad bosses. So, if a problem seems to be centered on a particular team or department, it’s a good idea to look at the chain of leadership.

When they first walk through the door, everyone derives their understanding of the company’s expectations from their immediate supervisor. So, leadership really does start at the top.

With this advice in mind, you have the tools you need to troubleshoot company culture. It often takes two quarters to turn things around, but consistency will pay off – in productivity, retention, and ultimately, profit.