5 Warning Signs That Your Corporate Culture Has Turned Toxic


If you’re like me, at some point in your career you worked at a company with a toxic culture. One of the reasons I stress the importance of communication throughout my company is because good things happen when people talk. This is especially true when your front-line workers feel comfortable bringing up problems and concerns with management. These employees often see problems and work challenges before management does and if they know they can bring it to their boss without fear or trepidation, solutions are easier to find.

Unfortunately, there are many companies where this isn’t the case. They have toxic corporate cultures. Making matters worse, many of them never realized how bad things were because they couldn’t read the signs of trouble, or simply ignored them. So, how well does your organization gauge if your culture is driving or damaging performance? Are you 100 percent sure things are going well? Do you know what to look for in case they’re not?

Watch out for these five sure-fire indicators of a toxic workplace:

  1. Lack of positive communication

As I alluded to in the first paragraph, lack of communication is my number one reason cultures turn toxic. Management first needs to understand that open, honest and consistent communications is essential.  It starts at the top. Too many CEOs don’t communicate well, and make no effort—much less concerted effort—to proactively communicate through those channels their employees are turning to.

A critical side symptom of this lack of a corporate level communications plan are departments that develop a silo mentality. There is an utter lack of interdepartmental communications or cooperation. This can feed on itself, fostering retribution, lack of cooperation, resentment, stonewalling and even sabotage. Ridding a company of the silo mentality is one of the more difficult challenges you can face as an executive.

  1. Management doesn’t embrace empowerment

Toxicity grows when management does not emphasize or value the concept of empowerment.  Where there is no empowerment, employees don’t feel trusted.  I have a well-proven theory of management expression: “You get the behavior that you incentivize or motivate and people will behave the way you treat them.” If management does not trust its people, they will often be untrustworthy. Further, to empower them, you have to communicate with them and give them the information they need to do their job. More often than not, your employees will make smart decisions in the best interest of the company. The benefit for the company is that fully empowered employees are then fully accountable, which makes them feel trusted and responsible. From there, they can draw a correlation from that for the company’s success.

  1. Information gaps   

For better or worse, social media and 24/7 news cycles have turned the workforce into voracious consumers of information and data. Moreover, it’s not just what the trendiest celebrity is doing on Instagram, either. However, while Baby Boomers and Gen-Xers want it, Millennials and Gen-Z demand it. Companies today have to adjust their policies and attitudes to follow suit. Employees no longer just take management decisions handed down from above without question. Your company needs to let them know how and why big decisions are made and how it will help the company, and by default, the employees.

In toxic companies, executives may mistake this attitude to mean they have to gain employee approval to make a decision. They don’t. However, if management wants to get buy-in from the people actually implementing these decisions, then management needs to be transparent. They should set goals, and then keep internal and external stakeholders up to date about where the business stands in meeting those goals. They should invite employees—and even customers, if possible—to contribute to the process. Doing so creates a consistent message everyone can trust.

  1. Grumbling employees 

How closely do you listen to what your employees are saying in the lunchroom or around the watercooler? Do you ever hear workers say:

  • “Nobody ever follows that procedure!“
  • “Don’t ask questions; just do as you’re told.”
  • “I feel like nobody listens.”
  • “Doesn’t ANYBODY around here see what I contribute to the company?”

Alternatively, does management say:

  • “Just make your numbers.” or
  • “Do your best and that will be OK.”
  • “That’s the way we’ve always done it!”

Do they ask without considering if what they are asking is reasonable, or even best for the company?

Hardworking employees, who could contribute greatly to the company’s success, can shut down when they feel disconnected and disengaged. Workers need an environment where management hears their opinions and employees feel like they matter. When employee disengagement flares up, leadership needs to act quickly. Talk to employees and listen. You may find that your real company culture has turned toxic and isn’t what you think it is.

However, an even greater indicator of a toxic environment than grumbling employees is actually employee turnover. Every type of industry has turnover averages. Things such as unemployment rate, compensation policy and worker demand in your industry will impact turnover rate, but it is most commonly directly correlated with corporate culture.

  1. A switch to survival mode

The toxic nature of the last decade has put many workers—especially veteran employees—into survival mode. They work in a constant cloud of fear. Will I lose my job? Are they going to sell off my division? Is the company going under? These fears cause employees to put their own needs first—whether it’s keeping their job, getting that bonus or raise, or closing a sale. In this mode, employees often make questionable choices or ignore behavior that could hurt the company in the end.

The cure is to have leadership that employees respect and trust to give them the facts straight up with no sugarcoating. When there is bad news, employees want straight talk. Leaders are often tempted to use what I like to call the “Mary Poppins” explanation. You know … a spoonful of sugar helps the medicine go down? Don’t do it. All employees want is the truth. Most employees prefer bad news or a clear “No” to a vague “We’ll see,” especially if it’s followed by a clear explanation of what’s going on.


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