Speaking truth to leadership power: why toxic environments do not work, trust and a strong company culture drives business performance and growth

There is much debate and discussion about leadership styles, in particular, the styles recognized as the most important factor in determining workforce productivity and in establishing an organizational environment.

At IBEM we believe if people understand the bounds of their position they have full authority to make decisions within those guidelines. The wider those guidelines, the more accountability an employee has earned to make decisions and take action in the company’s best interests.

We believe in the power of leadership to make things happen. That power should be in the hands of everyone, not the few.

Leadership is a competency and a skill set rather than an inherited set of traits that high-performing organisations recognise and prepare their organisation accordingly. Organisations that have high levels of employee engagement enjoy high performance on every key performance indicator from employee turnover to return on investment and shareholder return. Creating an engaged environment is a culture, not a program and must be approached systemically not tactically.

In organisations that means building a common language of leadership at all levels to have an immediate and lasting impact on business results, not just knowledge, wisdom or behaviours.

Researchers have observed a significant shift in the approach organizational leaders need to take to communicate with their teams.

The would-be analyst of leadership usually studies popularity, power, showmanship or wisdom in long-range planning. But none of these qualities is the essence of leadership. Leadership is the accomplishment of a goal through the direction of human assistants a human and social achievement that stems from the leader’s understanding of his or her fellow workers and the relationship of their individual goals to the group’s aim.

To be successful, leaders must learn two basic lessons: People are complex, and people are different. Human beings respond not only to the traditional carrot and stick but also to ambition, patriotism, love of the good and the beautiful, boredom, self-doubt, and many other desires and emotions. One person may find satisfaction in solving intellectual problems but may never be given the opportunity to explore how that satisfaction can be applied to business. Another may need a friendly, admiring relationship and may be constantly frustrated by the failure of his superior to recognize and take advantage of that need.

Exercising power and being a leader is not about winning a popularity contest. A lot of leaders are generally and not necessarily nice people.

For decades, many businesses adhered to a rigid leadership style, one that was hierarchical, where managers gave orders, enforced inflexible policies, and didn’t welcome input from employees.

This type of command and control leadership took hold in the 1950s and ’60s, started by people who returned from World War II and stepped into business leadership.

“Command-and-control” is the phrase informally used to describe the status quo style of leadership that exists within modern organisations: organisations generally characterise command-and-control by the following:
• Centralised decision making
• Have a pyramid-like organisational structure, but they may also be flat (command-and-control is more a culture than a structure)
• Increasingly privatise information the higher you go
• Allow more autonomy the higher you go
• Take a top-down approach to virtually everything, especially strategic thinking
• Create a strong distinction between (senior) management and workers
• Increase salary, perks, and flexibility with seniority
• Have specialised internal departments such as Human Resources
• Standardise and coordinate the monitoring, measuring and motivating of employees
• Do not let anyone other than senior management set the rules
• See employees working to please their boss as a priority
• Do not have a culture that allows room for failure
• Police its employees’ movements

Leadership is not about control

However, this style of leadership is a relic of a bygone era of business and is no longer even used to the same extent by the military. Employees no longer want to work at organizations where they simply must do as they’re told, have no input on their role or the direction of the company, and must follow orders because they came from a superior.

Do you believe that being in charge means you are in control?

If you find yourself frustrated about losing power in situations, it’s because leadership is not about taking control; it’s about influence.

The best leaders know that their role is not to dictate, but to inspire and motivate others to act. When you surrender control, you invite people to discover their potential. You create a culture where your team looks to go above and beyond, not just do the minimum to meet your demand. You will draw out a culture of communication that fosters and encourages innovation.

However, if you fear that creativity and collaboration are a recipe for chaos, then you need to revisit why you chose to become a leader in the first place. Real leaders don’t take on leadership roles to be in control of people or command them; the best leaders know that leadership is a privilege. The most influential leaders in history didn’t achieve greatness with whips and force. The masses followed them because of their enormous influence.

Command and control may have worked in the past, but it’s on its way out and companies that don’t adjust quickly may find it very hard to recruit and retain talent. Not only does it damage employee morale, it also leads to inferior results. Here’s why:

Employee mobility.

Command and control leadership was often used extensively in companies where employees expected to spend their entire careers and be rewarded with a pension. Before the internet, employees didn’t have as many options to change jobs, and leaving a company in search of greener pastures was less common, as employees valued stability and tenure over flexibility.

This is not true anymore – workers are more comfortable exiting jobs, and more than half of employees are actively looking for a new job. Many workers are happy to join the gig economy and be their own boss. In response, innovative leaders have succeeded by changing their strategies to keep employees happy and willing to stay.

Today’s workers don’t need to tolerate command and control leadership. Employees who feel micromanaged or strictly scrutinized by their managers feel comfortable jumping ship and finding a new job where they have more autonomy, respect, and a sense of purpose and ownership.

Businesses must be integrated and innovative.

With the exception of very large industries such as aerospace and government contracting, it’s very hard to maintain a competitive advantage these days without being able to constantly adapt.

Command and control don’t just make employees unhappy- it also can hurt your team’s decision-making. The best leaders solicit multiple perspectives and know that differing opinions can improve a team’s ideas over time. Leaders who suppress dissenting voices often keep valuable ideas from surfacing.

Most leadership experts agree that allowing dissent and productive conflict is vital to decision-making. Legendary CEO and leadership expert Ray Dalio said, “The greatest tragedy of mankind comes from the inability of people to have thoughtful disagreement to find out what’s true.”

Command and control leadership’s greatest failure comes from exactly what Dalio critiques. Leaders who insist their teams follow their decisions without question are shutting off constructive feedback that could reshape an idea, pre-empt a poor decision, or even change an entire company for the better.

Employees should be empowered to make decisions.

Command and control leadership is by design inflexible. While that ensures all members of a team are dedicated to the same goal, it also limits employee autonomy. If employees have to get permission for every decision they make, decision-making will grind to a halt.

The fast pace of the modern business world requires employees to adjust course constantly to meet changing demands. The best businesses empower their employees to trust their own judgment, guided by their core values to make decisions independently based on the best information they have at the time.

Even the military, the foundation of modern command and control leadership, has recognized this – in an interview, American general Stanley McChrystal said he told his troops, “If and when we get on the ground the order we gave you is wrong, execute the order we should’ve given you.”

McChrystal, a decorated general, certainly was not encouraging insubordination or disrespect of superiors. But he recognized that it’s impossible for leaders to be correct in every case, and the best organizations empower employees to make judgment calls when it seems their instructions don’t fit the situation.

Command and control leadership doesn’t allow this flexibility – it requires adherence to rigid orders, and that can lead to massive mistakes.

We’re way past the time when leaders succeed by commanding their teams to follow their instructions and never deviate. Employees want to be respected at work, have the autonomy to make their own decisions, and work in an environment of psychological safety, where they can be candid with their managers. The companies where leaders foster that type of environment are winning the talent war.

A more flexible style of leadership is better for everyone in the long run. Engaged and dedicated employees are critical to exponential growth, and command and control leadership will only push away top talent. It’s time to adapt.

Toxic workplace cultures are everywhere in America. With one in five Americans having left a job in the past five years due to unhealthy work culture, and with 49% of employees having thought about leaving their current organization, it all adds up to a poisonous churn, according to a new report from the Society for Human Resource Management (SHRM) examining workplace culture and how it impacted the cost of doing business.

Toxic workplace culture costs businesses billions in employee turnover: $223 billion over the last five years. Some of those turnover costs can be broken down into employee overtime to fill in the gaps, costs for temporary employees, recruiting costs, hiring manager time, recruiter time, and advertising costs.

What does a toxic workplace culture look like? There are overt signs like discrimination by sex and by age, but the most common sign is a breakdown in communication.

Manager nightmare

Trust in leadership is at an all-time low, according to research by multiple sources. Yet, employees attribute them with a high amount of power. The vast majority – 76% – say that their leaders set the culture of their workplace.

Still, over a third (36%) of workers say their CEO and line manager doesn’t know how to lead a team

Leaders are the reason 60% of employees want to leave their organization.

Four in 10 workers say their management do not frequently engage them in honest conversations about work matters.

This divide to a lack of proper training and the inability of some leaders to bridge the gap between their previous role as an individual contributor and their current role as manager.

More importantly, many managers haven’t been trained to work with people.

About two-thirds of working Americans say they have worked in a toxic workplace, with 26% reporting they have worked in more than one. It’s an environment that seemingly drags a significant portion of a workplace’s workers down:

– A quarter dread going to work

– A quarter don’t feel safe or secure voicing their opinions on work-related matters

– A quarter don’t feel respected or valued on the job

This environment bleeds into their home life: nearly a third of Americans say their toxic workplace makes them feel stressed and irritable at home.

In fact, they’re so stressed about their work-life that many would rather play hooky: one in five calls in sick when they just can’t face work that day.

Of course, unhappy workers feigning sick costs money: at companies in the U.S., the cost of productivity loss due to unplanned absences costs approximately $431 billion per year. And up to $86 billion of this lost productivity can be attributed to employees calling in sick when they don’t feel like going to work.

How to build a strong workplace culture?

Organizations must define their purpose. As well as figure out what’s acceptable and unacceptable within their organization. I think organizations can have much clearer conversations about what they believe in. What is their purpose? And what are the behaviours and the principles that they hold absolutely dear as fundamental to the organization? And also create examples of, ‘here’s what we don’t value in the workplace and won’t accept’.

The organization’s leadership is responsible for building good workplace culture.

Culture is the environment that surrounds us all the time. A workplace culture is the shared values, belief systems, attitudes and the set of assumptions that people in a workplace share. This is shaped by individual upbringing, social and cultural context.

In a workplace, however, the leadership and the strategic organizational directions and management influence the workplace culture to a huge extent. A positive workplace culture improves teamwork, raises the morale, increases productivity and efficiency, and enhances retention of the workforce. Job satisfaction, collaboration, and work performance are all enhanced. And, most importantly, a positive workplace environment reduces stress in employees.

Research by Deloitte has shown that 94% of executives and 88% of employees believe a distinct corporate culture is important to a business’ success. Deloitte’s survey also found that 76% of these employees believed that a “clearly defined business strategy” helped create a positive culture.

A positive culture in the workplace is essential for fostering a sense of pride and ownership amongst the employees. When people take pride, they invest their future in the organization and work hard to create opportunities that will benefit the organization.

By identifying and rewarding those who are actively striving towards creating a positive work culture, and supporting others around them, companies can encourage others to do the same. Positive attitudes and behaviour in the workplace are the direct results of effective leadership and a positive management style.

Trust is at the foundation of healthy relationships. At its core, trust is the willingness of one party to be vulnerable to the actions of another. It is an expectation that two parties will act in a way that is mutually beneficial. For these reasons, trust is a key element of effective communication, teamwork, employee commitment and productivity. It leads to stronger working relationships and a healthier organizational culture.

Because of the inherent vulnerability involved in trusting relationships, it is widely understood that trust must be earned. This is true whether it is between two colleagues, a manager and employee, or even between an employee and the organization at large. In some instances, it can be hard to build and sustain because individuals may not be aware of the unintentional ways that they have broken trust with their colleagues.

Trust helps to make challenging conversations easier – this has been written in my new book “The Trust Paradigm”, teams more integrated and employees more engaged. Exploring ways in which trust can be built can help individuals and companies create stronger relationships and healthier cultures.

Final thought, placing people at the centre of your corporate culture effort will enable positive shift and unlock long-term value for the organization. Culture work typically follows a major company event commonly a shift in strategy, a new CEO, a merger or acquisition, digital or functional transformation, regulatory changes, increasing calls for inclusivity, or unethical behaviour events.

On the flip sid,e companies sometimes are forced to deal with narcissistic leaders whose behaviour can be relentless and ruthless. So is their legacy: it creates lasting organizational damage.

People embrace low integrity and individualism when both leaders and the company culture support those behaviours. Aligning culture across every level of the organization so that it enables your strategy is essential to moving with agility in a time of unprecedented change. As external pressure mounts, leaders should take action to create a blueprint for purpose and culture that delivers short- and long-term value for employees, customers and investors. Culture isn’t the soft stuff, it’s the real, human stuff. And it’s time we got that right for each other.

William Courtney Hamilton Prentice was formerly the president of Bryant and Stratton Business Institutes in Buffalo, New York, the president of Wheaton College in Norton, Massachusetts, and the dean of Swarthmore College in Swarthmore, Pennsylvania, who once said:

“Effective leaders take a personal interest in the long-term development of their employees, and they use tact and other social skills to encourage employees to achieve their best. It isn’t about being “nice” or “understanding” — it’s about tapping into individual motivations in the interest of furthering an organization wide goal.”


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