Toxic Organization: An inefficient, ineffective firm that is damaging to employees as well as management.
Robert Bacal coined this phrase for an unhealthy workplace. These organizations have a history of poor, or even unethical, decision-making, and poor performance that remains despite personnel changes. Emotionally, there is a high level of employee and customer dissatisfaction, and a level of stress that goes beyond the normal stress of every day work. There is always an aura of crisis around every decision or action. There can be a history of destructive human relationships between employees and between management and employees, and this can cause long term damage. A company that treats employees well can expect high productivity and low turnover. Loyalty isn’t dead, but it must be cultivated.
The Look
Inability to achieve operational goals
Inability to fulfill all commitments to coworkers or customers
Fear-driven problem solving process
High level of organizational waste
Poor decisions that often require re-working, which reduces efficiency by a huge percentage
High level of interpersonal manipulation and selfish agendas
The Conditions
High level of interdependence
Often, there is identification with the organization in place of personal identity concepts
Too many personal agendas that are not in line with the organizational goals of the business
Poor communication
Small businesses that require a lot of face time between members seem to exhibit these characteristics more frequently. Interpersonal relationships are at the core of the organization’s sickness. Toxic organizations feel and function differently than healthy ones, and this can be discovered through informal interviews with employees and managers.
The Consequences
Members feel helpless to effect real change in the organization
General morale is very low
Members feel that relationships within the company, between coworkers and worker-manager relationships, are emotionally and professionally unsupportive
Members are often unable to find a direct source of their low morale
Members are unable to leave the situations that cause problems
Members are unable to create effective solutions to problems
Members report feeling attacked on all sides
The entrepreneur’s problems trickle down through the entire organization. What really makes the leader qualified to lead if they don’t know where they are going? Responding to these problems takes self-reflection and sometimes, brutal honesty. Like poor parents with children who act out, confusion from the leader can prevent the followers from making healthy, proactive decisions based on the clearly outlined operational goals. If the leader is a captive of his or her own emotional or professional problems, they become helpless to repair the damage and can even be unable to recognize that there is a problem, and this unawareness is the true roadblock to achieving operational success. In situations where the managers and entrepreneurial leaders are unable to examine the role that they play in the toxicity of the organization, there truly is no hope. The hope comes from an honest examination of self, and an objective analysis of the organization as a whole.
You can’t purchase anything on the open market and expect to gain a competitive advantage – anything available on the open market to you, is available to your competitors. Ultimately, the only thing that separates companies in the same market is the people that staff their organizations – the talent, skill, knowledge, and ambition that each individual brings to the table. An organization that properly manages employees can increase productivity by one-third.
Establish and encourage a working pace that is sustainable. When faced with a choice between their personal life and professional life, many will choose family, and those who don’t choose family will tend to burn out quickly. Human beings are not production factors. The employees are the building block of the foundation of the company, not fuel to burn out. Word of mouth with previous employees can damage your ability to garner new talent, and this is true for interns as well. Wishing doesn’t make the toxic organization magically repair itself. Conducting endless meetings about problems does not fix the problems unless a decision is made and acted upon. Training, coaching, and mentoring are important aspects of this. Begin with your immediate sphere of influence: you. Do you believe in reciprocity? Project what you believe in and those around you will begin to reflect that back to you.
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