The Rise of Toxic Leaders and Toxic Workplaces

Posted August 30th, 2016 in Articles, Blogs by admin

Books, articles, seminars and speeches abound espousing the virtues of great leaders, effusive in their description of men and women who are selfless, humble, empathetic, compassionate, emotionally intelligent and altruistic. Hordes of consultants, university professors, researchers and coaches make their living espousing the need for choosing these kinds of leaders.

The truth of the matter is that we are hypocrites, and we are witnessing the rise of toxic leaders and workplaces. We tend to choose or follow a very different kind of leader. We hire and promote the psychopaths, the narcissists, the bullies and the autocrats dedicated to self-interest, and whose long-term impact has and can damage and even destroy organizations (and even countries). In my two decades as an executive coach, I have encountered more of the leaders described in this paragraph than those described in the first paragraph. Many people easily forgive these toxic leaders and the harm they cause because they measure their success solely in financial terms or because they bring charismatic entertainment value to the organization.

A Leadership Crisis

Yet even today, despite the collective wisdom of centuries on this topic, confidence in our leaders is low and continues to decline. Those are among the key findings of a nation-wide poll, in 2012, the National Leadership Index(NLI), released by the Center for Public Leadership at Harvard Kennedy School and Merriman River Group. The survey is the seventh annual measurement of public attitudes toward 13 different sectors of American life, ranging from business and non-profits to politics and religion. In only two sectors measured in the year’s report—military and medical—did the leaders receive above-average confidence scores. Ratings for the remaining eleven sectors fell into the below-average range or remained in the below-average range. Wall Street and Congress stood out as the sectors in which Americans have the least confidence—indeed, the confidence rating for these two was barely above “none at all.”

And the failure rate for our leaders is getting worse, not better. The Conference Board reported that CEO tenure has declined since 2000. Consulting firm Booz also reported higher CEO turnover rates among the 250 largest companies. The Center for Creative Leadership reports research that shows 50% of leaders and managers are “estimated to be ineffective, incompetent or a mishire.” A survey by 14,000 HR professionals found only 26% reported the quality of leadership in their company as excellent or very good.

In the past two decades, 30% of Fortune 500 chief executives have lasted less than three years. Top executive failure rates as high as 75% and rarely less than 30%. Chief executives now are lasting 7.6 years on a global average down from 9.5 years in 1995. According to the Center for Creative Leadership 38% new chief executives fail in their first 18 months on the job. And Donald Palmer at the University of California reported of the Fortune 100 firms in l999, 40% of them had engaged in misconduct.

It appears the major reasons for failure has nothing to do with competence, or knowledge, or experience. Sydney Finkelstein, author of Why Smart Executives Fail, and David Dotlich and Peter C. Cairo, authors of Why CEOs Fail: The 11 Behaviors That Can Derail Your Climb to the Top and How To Manage Them present cogent reasons why chief executives fail, most of which have to do with hubris, ego and a lack of emotional intelligence.

The Toxic Organization

In my book, Eye of Storm: How Mindful Leaders Can Transform Chaotic Workplaces, I describe in detail the characteristics of toxic workplaces, and the part that dysfunctional leaders play in creating them.Toxic workplaces can be characterized as follows:

  • All sticks and no carrots. Management focuses solely on what employees are doing wrong or correcting problems, and rarely give positive feedback for what is going right. Or mostly carrots for the best performers, sticks for the the rest;
  • The creeping bureaucracy. There are too many levels of approval and management to get things done and a singular focus on micromanaging employees;
  • The gigantic bottom line. A singular focus on profits, beating the competition and cost cutting without consideration of other bottom lines;
  • Bullies rule the roost. Bullying of employees by management, or tolerated by management when it occurs among employees;
  • Losing the human touch. People are considered to be objects or expenses rather than assets, and there is little concern for their happiness and/or well-being;
  • High levels of stress, turnover, absenteeism and burnout;
  • Instituting internal competition among employees enforced by a performance assessment system that focuses on individual performance rather than team performance;
  • Little or no concern for work-life balance, where a personal or family life must be sacrificed for the job;
  • Overwork or workaholism, commonly evidenced by 50 hr+ workweeks, little or no vacation time and 24/7 availability for work communication;
  • Little evidence of leaders’ compassion and empathy for employees;
  • Little or no commitment to making contributions to the community, worthy causes or making the world a better place.

There has been a decline in civility in the workplace, including the growth of bullying. Christine Porath, Georgetown University business professor wrote a piece in The New York Times about the decline of civility in the workplace: “A quarter of those I surveyed in l998 reported that they were treated rudely at work at least once week…That figure rose to nearly half in 20005 , then to just over half in 2011.” In my article in Psychology Today, “The Rise of Incivility and Bullying in America,” “Repeated public opinion polls have voiced the concern of Americans over the erosion of civility in government, business, media and social media. The most recent poll by Weber Shandwick, reported that 65% of Americans say the lack of civility is a major problem that has worsened during the financial crisis and recession. What’s even more distressing is that nearly 50% of those surveyed said they were withdrawing from the basic tenants of democracy—government and politics—because of incivility and bullying.”

Research conducted in the past decade has shown that employee engagement has declined significantly in most industries, with some research citing as few as 29% of employees being actively engaged in their jobs.

Toxic Leadership

There’s a clear symbiotic relationship between toxic workplaces and the toxic leaders who inhabit them.

Theo Veldsman of the University of Johannesburg has recently published a study on the growth and impact of toxic leadership on organizations. He contends that “there is a growing incidence of toxic leadership in organizations across the world.” Veldsman says that anecdotal and research evidence shows that one out of every five leaders is toxic, and he argues according to his research, that is closer to three out of every ten leaders. Veldsman describes toxic leadership as “ongoing, deliberate intentional actions by a leader to undermine the sense of dignity, self-worth and efficacy of an individual. This results in exploitative, destructive, devaluing and demeaning work experiences.” He goes on to say that a toxic organization is one that “erodes, disable and destroys the physiological, psychosocial and spiritual well being of the people who work in it in permanent and deliberate way.

INSEAD business school Professors Gianpiero Petriglieri and Jennifer Petriglieri, authors of “Can Business Schools Humanize Leadership?” have coined the term “leadership industrial complex,” which they say promotes a view of leadership that is depersonalized and sanitized: “Over one decade of corporate scandals, financial meltdowns and growing inequality has consolidated a disconnect with business and political leaders, as it is in the protests in the streets and squares around the globe.” Leaders now are no longer seen as being role models or stewards of the common good, but rather as predatory plutocrats who profit disproportionately at the expense of the majority of the population. G. Petriglieri and J. Petriglieri argue that we have experienced a “dehumanization of leadership” in which leadership is reduced from a cultural enterprise to a strict intellectual or commercial one, and in which leadership “distances aspiring leaders from their followers and institutions, resulting in a disconnect their inner and outer worlds.”

Robert Sutton was one of the first leadership experts to draw attention to the prevalence of abusive bosses and how organizations should screen them out, as detailed in his book, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t. He points out that tech firms, particularly those in Silicon Valley are where abusive leaders thrive. His article in the Harvard Business Review on the subject received an overwhelming response of affirmation. He says in business and sports it is assumed if you are a big winner, you can get away with being a jerk. Sutton argues such bosses and cultures drive good people out and claims bad bosses affect the bottom line through increased turnover, absenteeism, decreased commitment and performance. He says the time spent counselling or appeasing these people, consoling victimized employees, reorganizing departments or teams and arranging transfers produce significant hidden costs for the company. And he warns organizations this behavior is contagious. Research suggests not only that some bosses are jerks but that many of them are bosses because they are jerks.

Paul Babiak’s book Snakes in Suits profiles how some functional psychopaths can fake it untill they make it up the corporate ladder through charm and guile, pointing out how statistically significant evidence shows psychopaths are overrepresented in Corporate America.

An Interact/Harris Poll was conducted online with roughly 1,000 U.S. workers. In the survey, employees called out the kind of management offenses that point to a striking lack of emotional intelligence among business leaders, including micromanaging, bullying, narcissism, indecisiveness, and more.

Incivility also hijacks workplace focus. According to a survey of more than 4,500 doctors, nurses and other hospital personnel, 71 percent tied disruptive behavior, such as abusive, condescending or insulting personal conduct, to medical errors, and 27 percent tied such behavior to patient deaths.

Swedish researchers, led by Anna Nyberg at the Stress Institute in Stockholm, have published a study in the Journal of Occupational and Environmental Medicine on the issue of leaders’ behavior and employee health. They studied more than 3,100 men over a 10 year period in typical work settings. They found that employees who had managers who were incompetent, inconsiderate, secretive and uncommunicative, the employees were 60% more likely to suffered a heart attack or other life-threatening cardiac condition. By contrast, employees who worked with “good” leaders were 40% less likely to suffer heart problems.

According to a 2010 survey conducted by the Workplace Bullying Institute, 35% of the American workforce (or 53.5 million people) has directly experienced bullying–or “repeated mistreatment by one or more employees that takes the form of verbal abuse, threats, intimidation, humiliation or sabotage of work performance”–while an additional 15% said they have witnessed bullying at work. Approximately 72% of those bullies are bosses.

Jean Lipman-Blumen, in her book, The Allure of Toxic Leaders, describes how toxic leaders create “serious and enduring harm” on their followers, employees and their organizations. Recent polls of the American public shows some of the lowest trust results in decades for elected members of Congress and business leaders. She identifies toxic leaders’ behaviors as follows:

Leaving their followers worse off than when they found them by deliberately undermining, demeaning, seducing, marginalizing, intimidating, demoralizing, terrorizing them;
Consciously feeding their followers illusions that enhance the leader’s power and impair the followers’ capacity to act independently
Playing to the basest fears and needs of the followers;
Threatening or punishing those who fail to comply with the leader or question the leader’s actions;
Misleading followers through deliberate lies;
Blaming others for their mistakes or failures.
Lipman-Blumen contends that even the media has difficulty resisting the seductive appeal of toxic leaders, citing examples from leading publications such as Time, BusinessWeek, Forbes and Fortune extolling the virtues of a number of failed narcissistic and toxic leaders such as Dennis Kozlowski, Kenneth Lay and Al Dunlap.

Narcissistic Leaders

Americans are obsessed with narcissistic leaders, or at least they have an ambivalence between the ones they like and the ones they promote. A case in point is Real Estate baron and presidential candidate Donald Trump. Not that he is alone. At various times, similar attention and popularity have been heaped by the public and especially by the media for leaders such as Steve Jobs, Lee Iacocca and Larry Ellison. Some observers have openly called Trump a narcissist in terms of a classical definition. Stephanie Marsh used the Narcissistic Personality Disorder description contained in the psychologists/psychiatrists Bible, the DSM-V as an assessment for Trump, concluding there was a match with the following traits:

A grandiose sense of self-importance;
A preoccupation with unlimited fantasies of success, power and brilliance;
Believes that he is “so special;”
Requires excessive admiration;
Has a sense of entitlement;
Takes advantage of others to achieve his own ends;
Lacks empathy for others;
Is super-sensitive to criticism.
Not that their hubris doesn’t pay off. According to a research study completed by Charles A. O’Reilly III at Stanford’s business school. O’Reilly and his colleagues surveyed employees in 32 large, publicly traded tech companies. He contends that bosses who exhibits narcissistic traits like dominance, self-confidence, a sense of entitlement, grandiosity and low empathy, tend to make more money than their less self-centered counterparts, even if the lower-paid CEOs exhibit plenty of confidence. O’Reilly says of the narcissists, “they don’t really care what other people think and depending on the nature of the narcissist, they are impulsive and manipulative.” O’Reilly goes on to argue the longer narcissistic leaders are at the helm, the higher their compensation in comparison with the rest of the leadership team, or in some cases the narcissistic bosses fire anyone who dares to question or challenge them. There is a dark downside to this appearance of success however, O’Reilly contends. Company morale often declines, and employees leave the company. And while the narcissistic or abusive leaders may bring in the bigger paychecks, O’Reilly says there is compelling evidence that they don’t perform any better than lower-paid, less narcissistic counterparts.

While Steve Jobs was a charismatic visionary, and brilliant innovator, Walter Issacson’s biography showed him to be rude, controlling and mean-spirited, never hesitating to humiliate Apple employees and take credit for others’ work. Since his death, there has been a flood of articles and books and seminars extoling Job’s leadership style, many of which argue that it’s okay to be an “asshole” as long as you are financially successful. In my article in The Financial Post I make the point: “The concern I have, and that it is reflected by other leadership experts, is the faulty cause and effect, and “ends justifies the means” arguments that hold up Jobs as a leader to be emulated. It goes something like this: It doesn’t matter what kind of boss you are like (meaning abusive), as long as you get results (financial); and any methods to get there are okay, including abusing people.”

While narcissists may look like good leaders, according to a new study by a group of psychology researchers from the University of Amsterdam, they’re actually really bad at leading. The study is in the journal Psychological Science. Here’s the abstract: “Although they are generally perceived as arrogant and overly dominant, narcissistic individuals are particularly skilled at radiating an image of a prototypically effective leader. As a result, they tend to emerge as leaders in group settings. Despite people’s positive perceptions of narcissists as leaders, it was thus far unknown if and how leaders’ narcissism is related to the actual performance of those they lead. We proposed and found that although narcissistic leaders are perceived as effective due to their displays of authority, leaders’ narcissism actually inhibits information exchange between group members and thereby negatively affects group performance.”

Writing in the Harvard Business Review Michael Maccoby identified the weaknesses of a narcissistic leader, including this: “Despite the warm feelings their charisma can evoke, narcissists are typically not comfortable with their own emotions. They listen only for the kind of information they seek. They don’t learn easily from others. They don’t like to teach but prefer to indoctrinate and make speeches. They dominate meetings with subordinates. The result for the organization is greater internal competitiveness at a time when everyone is already under as much pressure as they can possibly stand. Perhaps the main problem is that the narcissist’s faults tend to become even more pronounced as he becomes more successful.”

Tomas Chamorrow-Premuzic has pondered the question of “Why We Love Narcissists.” He argues when narcissists, however productive some may be, “have parasitic effects on society. When in charge of companies they commit fraud, demoralize employees and devalue stock. When in charge of countries they increase poverty, violence and death rates.” Chamorrow-Premuzic analyzed decades of research on narcissistic leaders and concluded these key findings:

Narcissists are masterful impression makers, largely due to their intense self-obsession and self-adulation.
Narcissists take credit for successes and blame others for failures “through a mix of shameless self-promotion and guilt-free, Machiavellian agenda.”
Narcissists fit our conventional stereotype of what a good leader should look like. Perhaps this is the most relevant factor. Chamarrow-Premuzic says in sports, business, education and politics, we value above all else confidence, charisma and egotism rather than humble confidence and altruism and integrity. Today’s business world values rewards, and arrogant self-important people, and our media thrives on covering and promoting narcissists.
Lord David Owen identified hubris—overconfidence and exaggerated pride along with a shaming and contempt for others) as another term to describe narcissistic leaders. He says that, among other character traits, they have a strong belief that any action they take, even if illegal, will be vindicated in legal courts or that of public opinion. He says the “hubris syndrome is a disorder of the possession of power, particularly power which has been associated with overwhelming success, held for a period of years and with minimal constraint on the leader.”

Emma SEPPÄLÄ provides us with hard data on the value of being a “nice boss.” She argues that research shows that “tough managers” often mistakenly think that putting pressure on employees will increase performance, but when it does is increase stress, which has many negative effects. She cites a study that also shows that when leaders are fair to the members of their team, the team members display more citizenship behavior and and are more productive.

Fred Kiel, founder of KRW International, and author of The Return on Character, says there is a widely accepted belief in the business world and business schools that a good leader is a “hard-nosed driver.” Kiel argues the opposite. He contends that jerks who exhibit poor character cost a company money, based on his study of 84 CEOs. Kiel used 25 positive character traits such as telling the truth, keeping promises, admitting mistakes, and forgiving others who make mistakes and measured CEOs against these criteria. He found that “high character leaders and their teams brought in nearly five times the return on assets to the bottom line as did low-character or self-focused CEOs.”

Researchers at Pennsylvania State University found that the firms with narcissistic CEOs did not perform any better than the firms with non-narcissistic CEOs.

Morgan McCall, of the University of Southern California’s business school, in his book, “ High Flyers: Developing the Next Generation of Leaders, says of narcissistic leaders that eventually their flaws catch up with them, particularly when they get in trouble.

What Research Says About Good Leaders

Christina Boedker of the Australian School of Business conducted a research study on the link between leadership and organizational performance and collected data from more than 5600 people in 77 organizations. She concluded that the ability of leaders to spend more time and effort developing and recognizing people, welcoming feedback, and fostering co-operation among staff were critical to success. Moreover, out of all the various elements in a business, the ability of a leader to be compassionate, “to understand people’s motivators, hopes and difficulties and to create the right support mechanism to allow people to be as good as they can be,” had the greatest correlation with profitability and productivity, Boedker concluded.

William Baker and Michael O’Malley, authors of Leading With Kindness, argue that the practice of kindness in corporations has a positive impact on bottom line business results. They argue that a management style, which could be called transformational, that has these traits—compassion, integrity, gratitude, authenticity, humility and humor—improves employee performance and employee retention.

Humble leaders are more effective and better liked, according to a study published in the Academy of Management Journal “Leaders of all ranks view admitting mistakes, spotlighting follower strengths and modeling teachability as being at the core of humble leadership,” says Bradley Owens, assistant professor of organization and human resources at the University at Buffalo School of Management. “And they view these three behaviors as being powerful predictors of their own as well as the organization’s growth.”

The more honesty and humility an employee may have, the higher their job performance, as rated by the employees’ supervisor. That’s the new finding from a Baylor University study published in in the journal Personality and Individual Differences that found the honesty-humility personality trait was a unique predictor of job performance.

“Researchers already know that integrity can predict job performance and what we are saying here is that humility and honesty are also major components in that,” said Dr. Wade Rowatt, associate professor of psychology and neuroscience at Baylor, who helped lead the study. “This study shows that those who possess the combination of honesty and humility have better job performance. In fact, we found that humility and honesty not only correspond with job performance, but it predicted job performance above and beyond any of the other five personality traits like agreeableness and conscientiousness.”

The Baylor researchers found that those who self-reported more honesty and humility were scored significantly higher by their supervisors for their job performance. The researchers defined honesty and humility as those who exhibit high levels of fairness, greed-avoidance, sincerity and modesty.

“This study has implications for hiring personnel in that we suggest more attention should be paid to honesty and humility in applicants and employees, particularly those in care-giving roles,” said Megan Johnson, a Baylor doctoral candidate who conducted the study. “Honest and humble people could be a good fit for occupations and organizations that require special attention and care for products or clients. Narcissists, on the other hand, who generally lack humility and are exploitative and selfish, would probably be better at jobs that require self-promotion.”

Amy Y. Ou and her colleagues at Arizona State University published a study in Administrative Science Quarterly in which they suggested it would be interesting to look at some of the leadership traits that include self-awareness, openness to feedback, and a focus on the greater good and others’ welfare, as opposed to dwelling on oneself have more positive impact on employees and the organization. Together with three other colleagues in the U.S. and China, the researchers wound up interviewing the CEOs of 63 private Chinese companies. They also gave surveys to 1,000 top- and mid-level managers who worked with the CEOs. The surveys and interviews aimed to determine how a humble leadership style would affect not so much the bottom line as the top and mid-level managers who worked under the CEOs. Did managers feel empowered by CEOs’ humility, did they feel as though they were invited into company decision-making, and did that lead to a higher level of activity and engagement? The study’s conclusion: The more humble the CEO, the more top- and mid-level managers reported positive reactions. Top-level managers said they felt their jobs were more meaningful, they wanted to participate more in decision-making, they felt more confident about doing their work and they had a greater sense of autonomy. They also were more motivated to collaborate, to make decisions jointly and to share information. Likewise middle managers felt more engaged and committed to their jobs when the top boss was more humble. “There is a negative stereotype that humble people are weak and indecisive,” Angelo Kinicki, one of the co-authors of the report, “That’s just not the case.”

In an article in The Harvard Business Review entitled “Level 5 Leadership: The Triumph of Humility and Fierce Resolve,” leadership expert Jim Collins argues Level 5 leaders, the best leaders exhibit the following characteristics:

Demonstrate a compelling modesty, shunning public adulation; never boastful.
Act with quiet, calm determination; relie principally on inspired standards, not inspiring charisma, to motivate;
Channel ambition into the company, not the self; set up successors for even more greatness in the next generation;
Look in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck;
Look out the window, not in the mirror, to apportion credit for the success of the company—to other people, external factors, and good luck.
Rob Nielsen, author of Leading with Humility, argues that some narcissistic business leaders are treated like rock stars but who leaders who are humble and admit mistakes outshine them all. There’s a difference between being a humble leader and being wishy-washy or overly solicitous of others’ opinions, says Arron Grow, associate program director of the School of Applied Leadership at the City University of Seattle and author of How to Not Suck as a Manager. He says being humble doesn’t mean being a chump and describes 6 ways in which leaders can be more effective by being more humble. Elizabeth Salib takes up on this theme in her article in The Harvard Business Review, contending the best leaders are humble leaders. She cites Google’s SVP of People Operations, Lazlo Bock, who says humility is one of the traits he’s looking for in new hires.

A recent Catalyst study backs this up, showing that humility is one of four critical leadership factors for creating an environment where employees from different demographic backgrounds feel included. In a survey of more than 1500 workers from Australia, China, Germany, India, Mexico, and the U.S., Catalyst found that when employees observed altruistic or selfless behavior in their managers—a style characterized by acts of humility, such as learning from criticism and admitting mistakes, they were more positive and committed to their work teams.

Fred Kiel, head of the executive development firm KRW international, recently studied 84 CEOs and more than 8,000 of their employees over the course of seven years. The results, written up in the Kiel’s recent book Return on Character found that people worked harder and more happily when they felt valued and respected. So-called “character-driven” CEOs who possess four virtues—integrity, compassion, forgiveness, and accountability—lead companies whose returns on assets are five times larger than those of executives who are more self-centered, he found.

Researchers at the Wharton School at the University of Pennsylvania and the George Mason University School of Business examined what they call a “culture of companionate love,” which involves feelings of affection, compassion, caring, and tenderness among co-workers at long-term care facilities. Though less intense than romantic love, the strong emotions involved still help create bonds between people. 16 months later the researchers checked in with each group. It turned out that a strong culture of compassionate love predicted benefits all around: less burnout, fewer unplanned absences, more teamwork, and higher work satisfaction for employees; fewer emergency room trips and higher mood, satisfaction, and quality of life for patients; and more satisfaction with the facility and willingness to recommend it for families. Research suggests that compassionate workplaces increase employee satisfaction and loyalty. A worker who feels cared for at work is more likely to experience positive emotion, which in turn helps to foster positive work relationships, increased cooperation, and better customer relations. Compassion training in individuals can reduce stress, and may even impact longevity. All of these point to a need for increasing compassion’s role in business and organizational life.

According to a study by Bradley Owens, of the University at Buffalo School of Management, humble leaders are more effective and better liked. A follow up study that is forthcoming based on data from more than 700 employees and 218 leaders confirmed that leader humility is associated with more learning-oriented teams, more engaged employees and lower voluntary turnover.

David Rand at Yale University argues that employees in all industries increasingly desire leaders who are more like Ghandi and less like the Wolf of Wall Street. The PR firm Ketchum conducted a 2014 leadership survey, and concluded there’s a “seismic move away from an outdated, ‘macho’ model of solitary leadership—a command-and-control approach centered on one-way rhetoric, obsessively controlled messaging and solitary decision-making—and towards a new, more ‘feminine’ archetype.”

So Why Are We Such Hypocrites About Who We Want For Leaders?

Jeffrey Pfeffer, a Stanford University business professor, in his new book, Leadership BS: Fixing Workplaces and Careers One Truth at a Time, describes how we’ve developed a mythology of leadership, arguing that most conventional wisdom about it “BS.” He says “Leaders fail their people, their organizations, the larger society and even themselves with unacceptable frequency.” He points to overwhelming evidence that shows dysfunctional workplaces filled with disengaged, dissatisfied employees who don’t trust their leaders and can’t wait to leave their jobs.

It seems, Pfeffer argues, that there is a clear divergence in the interests of corporate leaders and the groups that study leadership, and the average employee. He says: “Individuals maximize their own survival chances by acting selfishly to acquire at all costs the resources for survival. Group survival, however, depends on individuals sacrificing their own well-being for that of the group.” Perhaps this explains the never-ending increases in CEO compensation and corporate shareholder profits, while average worker salaries stagnate.

What’s the solution to this leadership crisis, and make no mistake we are in the midst of one?

Pfeffer would argue the answer lies in measuring outcomes. He says the current measurement of leadership improvement activities is pathetic. We measure leadership development based on whether the participants “liked” their experience (in University or corporate training programs) versus whether the activities actually made any difference in the workplace.

All too often, the experience of the average worker, or the average citizen is to hear a bunch of platitudinous “inspirational” sound bites from leaders intended—like the football coaches locker room speech—to motivate the troops, with little concrete follow-up or substance. So people become cynical and distrustful of their leaders.

Pfeffer concludes that the leadership training industry itself has failed to produce good leaders. He cites the supporting work of other experts such as Barbara Kellerman at Harvard University.

Herein lies the irony, Pfeffer argues. Despite all the substantial research on what is supposed to constitute good leadership in the past three decades, we still are experiencing “an enormous psychological and even physical toll exacted on employees from bullying, abusive bosses.”

Pfeffer proposes an answer to why this has occurred. He argues that too much leadership development efforts have been more like preaching—“telling people inspiring stories about heroic leaders and exceptional organizations,” while not much has actually changed in workplaces. He provides another sobering conclusion: “the qualities we actually select for and reward in most workplaces are precisely the ones that are unlikely to produce leaders who are good for employees, or for that matter, long-term organizational performance.”

Perhaps the most interesting way of looking at this contradiction is from an evolutionary perspective. Frans de Waal is author of The Age of Empathy: Nature’s Lessons For A Kinder Society. De Waal is a biologist, professor of psychology and director of the Living Link Center at Emory University. In 2007, Time magazine selected him as one of the world’s most influential people. The distinguished scientist says it is long overdue that we jettisoned our beliefs about human nature—proposed by economists and politicians—that human society is modeled on the perpetual struggle for survival that exists in nature. De Waal says this is mere projection on our part. Nature is replete with examples of cooperation and empathy. Given all we know about empathy in other animal species, why do we persist in seeing human existence, particularly in business, as a fight for survival, with winners and losers? De Waal calls this the “macho origin myth” which insists that the human species has been waging war on itself as millennia as a reflection of our true nature. What has been ignored is the fact that empathy has been evident during that entire time. De Waal points to a mass of examples of sacrifice, empathy, co-operation and fairness in humans and other animals’ species.

Summary

Several things are clear. First, we are in a leadership crisis when it comes to confidence in our political and business leaders. Second, we say we want empowering, humble, and kind leaders—bolstered by research evidence—but we often choose authoritarian, controlling, narcissistic and toxic leaders. Perhaps it’s time for the general public, recruiters, and leadership development experts to end the contradiction and do what’s best for our organizations and society.

Amazon and Toxic Workplaces

Posted November 2nd, 2015 in Articles, Blogs by admin

A recent expose of Amazon’s work culture in a New York Times (link is external) report brings into focus the growing problem of toxic work cultures in North America, one that will take a huge toll on long term productivity and employee well being.

Amazon may now be the biggest retailer in the U.S. with an estimated valuation of $250 billion. As of July, 2015, Amazon surpassed that other retail giant, Walmart.

What is being said both in the New York Times report and by others about Amazon that would prompt one to conclude it has a toxic work culture, something that appears to be a trend in certain sectors of our economy. The Times describes Amazon as a place where employees are held to standards described by the company as “unreasonably high.” The report details 85-hour workweeks, regular culling of staff and back-stabbing. Former Amazon employees describe how working for Amazon where their performance is reviewed weekly through constant data collection. Workers are also encouraged to comment on each other’s performance constantly, using an anonymous online forum.

Here’s what some other publications have said about the Amazon work culture:

  • Gawker has published a series of emails describing life inside Amazon warehouses, written by former Amazon employees where temp employees toil in freezing conditions;
  • Pennsylvania’s Morning Call  published a series of stories about Amazon warehouses that were so hot workers fainted on the job and were placed on stretchers by paramedics. (Amazon has since installed air conditioning);
  • Amazon’s temp agency aggressively opposes unemployment compensation for workers who were let go because they were sick, The Morning Call reported;
  • Mother Jones  did an in-depth piece that described how Amazon workers are fired if they burst into tears on the job;
  • German unions were striking over pay rates in Amazon’s warehouses as reported in the New York Times  in 2013.

This is how working life at Amazon has been described in a New York Times investigation – though Jeff Bezos, the Amazon founder and chief executive, has repudiated its claims.  “The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day,” he said in an email to staff. “But if you know of any stories like those reported, I want you to escalate to HR … our tolerance for any such lack of empathy needs to be zero.”

Amazon’s approach has been called “purposeful Darwinism, (link is external)” an often-abused concept of “survival of the fittest” from Charles Darwin. This means creating competition among employees and see who survives. In the Amazon system this idea is operationalized by measuring employees on a wide range of metrics, ranking them on the basis of their performance, then splitting them into three groups: a small number of high performers who are lavishly rewarded; a large group of average performers who hold on to their jobs; and a third group of under-performers who are fired.

Merge Gupta-Sunderji, writing in The Globe and Mail (link is external), argues :“On one hand, compelling anecdotal evidence suggests that Amazon is running the First World equivalent of a Third World sweatshop… somewhere along the way, as the company grew in size, managers in the organization became so focused on results that they lost sight of how they were obtained and the people who made these results happe… a toxic work environment is created. Empathy is discouraged while hostility and sabotage become accepted.”

Amazon’s approach has also been coined the “rank and yank” system, dramatized in the movie Glengarry Glen Ross, when a senior executive played by Alec Baldwin visits a sales team to “motivate” them by offering them first prize a Cadillac; second prize a set of steak knives; and without apology or second thought, third prize is “you’re fired”.

Rank and yank has been widely used before by companies such as General Electric but most of the available evidence by management experts such as Jeffrey Pfeffer and Robert Sutton point out that the approach can drive destructive internal competition. More recently research has shown when you introduce a forced ranking system into a workplace, people are more likely to start sabotaging each other in the hope of climbing up the ladder by steppping on the heads of others.

Think about the psychology of the “rank and yank” system, which more closely resembles the law of the jungle. When your co-workers can stab you in the back to improve their own performance ratings, it is hard to work cooperatively with them. So people protect themselves and act out of self-interest. Sharing knowledge with them or helping them can be risky. This creates a toxic work environment that undermines cooperation, sharing and innovation.The rank and yank system can become a self-fulfilling prophecy and is counter to all we know about good motivation methods.

Yet, we know from research that when people are labeled poor performers they usually conform to expectations and end up performing poorly. In contrast, the rank and yank system favors the top performers and potentials who are lavished with rewards. What does that leave? A whole group in the middle who are neither poor or top performers, who are virtually ignored. So a system of inequality is perpetuated, in many ways, mirroring the social and economic structure of the U.S.

Questions were raised about the system as far back as the early 2000s, when employees of Goodyear and Ford challenged the rankings as discriminatory. Employees at both companies claimed they were singled out because of their age and, in 2002, Ford paid $10.5 million to settle two class actions suits. Both companies later dropped the evaluation system. Microsoft also settled lawsuits with employees who claimed the forced ratings led to racial discrimination by “predominantly white male” managers, and Conoco settled a lawsuit brought by the Justice Department that accused the Houston-based company of using the appraisals to favor cheaper foreign workers over U.S. citizens. The most notable company was Microsoft, which hung onto it until only recently, finally bowing to long-standing criticism that such rigid employee ratings can stifle collaboration and creativity.

What’s interesting to note is that although companies such as Microsoft and Ford have discontinued the rank and yank system, it’s rumored that Yahoo may be instituting it. Clifford Stevenson, lead management researcher for the Institute for Corporate Productivity, a Seattle research firm, said his organization’s 2011 survey found a decline in the number of companies, especially those that are high-performing, using the rank and yank system.:“The percentage of companies reporting that they used a forced-ranking system declined from 42% to 14%,” he says.

Silicon Valley is known  for some aggressive environments like Amazon where employees getting “dressed down” is a daily event.. Apple, under Steve Jobs, wasn’t an pleasant place to work for many. Intel’s Andy Grove cultivated a workplace where all employees were encouraged to speak their minds, even if co-workers were offended.

Yet the same culture exists at most big companies and can be “used to represent either success or failure,” believes Steven Sinofsky, long-time former executive at Microsoft, Harvard professor and board member of a number of startups. Sinofsky tweeted a link to a story about Microsoft’s culture that ran in the Seattle Times back in 1989. That old article described Microsoft as a “velvet sweatshop” where employees were expected to work themselves to exhaustion.

In my book, Eye of the Storm: How Mindful Leaders Can Transform Chaotic Workplaces, I outline in detail the characteristics of toxic workplaces which include the following:

  • All sticks and no carrots. Management focuses solely on what employees are doing wrong or correcting problems, and rarely give positive feedback for what is going right. Or mostly carrots for the best performers, sticks for the the rest;
  • The creeping bureaucracy. There are too many levels of approval and management to get things done and a singular focus on micromanaging employees;
  • The gigantic bottom line. A singular focus on profits, beating the competition and cost cutting without consideration of other bottom lines;
  • When bullies rule the roost. Bullying of employees by management, or tolerated by management when it occurs among employees;
  • Losing the human touch. People are considered to be objects or expenses rather than assets, and there is little concern for their happiness and/or well-being;
  • High levels of stress, turnover, absenteeism and burnout;
    Instituting internal competition among employees enforced by a performance assessment system that focuses on individual performance rather than team performance;
  • Little or no concern for work-life balance, where a personal or family life must be sacrificed for the job;
  • Overwork or workaholism, commonly evidenced by 50 hr+ workweeks, little or no vacation time and 24/7 availability for work communication;
  • Little evidence of leaders’ compassion and empathy for employees;
  • Little or no commitment to making contributions to the community, worthy causes or making the world a better place;

Jeffrey Pfeffer, Thomas D. Dee Professor of Organizational Behavior at the Stanford Graduate School of Business and the author of The Human Equation: Building Profits by Putting People First, outlines in his book how companies that treat their people right get enormous dividends–high rates of productivity, low rates of turnover. Pfeffer disputes much of the conventional wisdom in the current conversation about work and business. Loyalty isn’t dead, he insists — but toxic companies are driving people away. There isn’t a scarcity of talent — but there is a growing unwillingness to work for toxic organizations.

The great irony, says Pfeffer, is that most workplace policies that are bad for employees are also bad for companies themselves. Organizations that are more “humane” — offering generous benefits, sick leave, vacation pay, health insurance, and so forth — are shown to be more profitable. Examples are Southwest Airlines, Kimberley-Clark, Whole Foods, CostCo and of course, Google. Google is a profitable business with high standards and where sharing differences of opinion (link is external)is encouraged, according to some. Yet the company has realized the public value of building a caring employee culture. Others do, as well. SAS, the software company, is famous for respecting the fact that its employees have a life outside the office. Workers there are on a 35-hour work week. SAS has been acknowledged as “The World’s Best Place to Work.” (link is external)

Some would argue that it doesn’t matter if the workplace culture enhances employee well-being as long as the company makes a profit for shareholders. Despite the fact that that utilitarian “ends justifies the means” philosophy is a throwback to 19th and early 20th century industrialism, it’s actually not born out by research evidence.  First, in Amazon’s case, some have argued the company is actually not profitable. Almost 20 years after it was launched, it has yet to report a meaningful profit. According to Yahoo Finance , the company earned only a slim 1% operating margin during the last 2 years. For all Amazon’s remarkable revenue growth, the company has still not demonstrated that it can generate profits consistently. Now, investors in the company may finally be running out of patience, Graham Ruddick writes in The Telegraph.

One could also argue that Amazon work practices—even the issue of productivity—is not supported by research. For example, the relentless pushing for more and more productivity through extended working hours, and even workaholism may actually harm productivity. Research shows that exhausted, overworked people make bad decisions and big mistakes. Second, (link is external) exhausted, overworked people are seldom innovative, at least not for very long.

The expression “killing yourself at work” takes on new meaning with the publication of a massive research study on the topic. The scientists looked at data from 25 studies involving over 600,000 individuals and assessed if there was a relationship between heart events like heart attacks and strokes with standard work weeks (35-40 hours a week) compared with long work weeks (>55 hours). After adjustments for age and other known risk factors, the long work week was associated with a increased risk of heart events and particularly with stroke events. In fact, the more hours one works, the greater the risk of stroke.

What about productivity?

“People-centered organizations often outperform their profit-centered counterparts seven ways to unleash the full potential of your people,” says Daniel Goleman, author of the best selling book, Focus: The Hidden Driver of Excellence, and winner of the McKinsey award for the best HBR article of the year, “The Focused Leader.”

He goes on to say “Studies conducted by companies evaluating their own executives have proven taht the the top 10 percent of performers displayed superior comeptencies in emotional intelligence, which includes empathy and a focus on teamwork.”

In his book, Drive , Daniel Pink, describes what he says is “the surprising truth” about what motivates us. Pink concludes that extrinsic motivators work only in a surprisingly narrow band of circumstances; rewards often destroy creativity and employee performance; and the secret to high performance isn’t reward and punishment but that unseen intrinsic drive—the drive to do something because it is meaningful. Pink says that true motivation boils down to three elements: Autonomy, the desire to direct our own lives; mastery, the desire to continually improve at something that matters to us, and purpose, the desire to do things in service of something larger than ourselves. Pink, joining a chorus of many others, warns that the traditional “command-and-control” management methods in which organizations use money as a contingent reward for a task, are not only ineffective as motivators, but are actually harmful.

In an article by Richard Williams, Wallace Higgins and Harvey Greenberg, published in the Boston Globe, ) they cited numerous research studies regarding leadership style and the health of employees. They concluded “your boss can cause you stress, induce depression and anxiety or even trigger the onset of serious illnesses. It is not just bad managers who can negatively affect employee health, but it is also the lackadaisical and mediocre who put employees on the sick list.” And the cost is huge in terms of lost productivity, healthcare costs and employee turnover. The authors argue that a whole new field of litigation in the U.S. is developing-“lawsuits against ‘bad bosses’ and the organizations that negligently allow them to supervise.”

Christina Boedker of the Australian School of Business conducted a research study on the link between leadership and organizational performance and collected data from more than 5600 people in 77 organizations. She concluded that the ability of leaders to spend more time and effort developing and recognizing people, welcoming feedback, and fostering co-operation among staff were critical to success. Moreover, out of all the various elements in a business, the ability of a leader to be compassionate, “to understand people’s motivators, hopes and difficulties and to create the right support mechanism to allow people to be as good as they can be,” had the greatest correlation with profitability and productivity, Boedker concluded.

William Baker and Michael O’Malley, authors of Leading With Kindness argue that the practice of kindness in corporations has a positive impact on bottom line business results. They argue that a management style, which could be called transformational, that has these traits—compassion, integrity, gratitude, authenticity, humility and humor—improves employee performance and employee retention.

Jonathan Haidt, author of Righteous Mind, (link is external) reflects the view of Edward O. Wilson, David Sloan Wilson and others who argue that when groups of animals compete, it’s the cohesive, cooperative, internally altruistic groups that win and pass on their genes.

Frans de Waal is author of The Age of Empathy: Nature’s Lessons For A Kinder Society. (De Waal is a biologist, professor of psychology and director of the Living Link Center at Emory University. In 2007, Time magazine selected him as one of the world’s most influential people. The distinguished scientist says it is long overdue that we jettisoned our beliefs about human nature—proposed by economists and politicians—that human society is modeled on the perpetual struggle for survival that exists in nature. De Waal says this is mere projection on our part. Nature is replete with examples of cooperation and empathy.

Given all we know about empathy in other animal species, why do we persist in seeing human existence, particularly in business, as a fight for survival, with winners and losers? De Waal calls this the “macho origin myth” which insists that the human species has been waging war on itself as millennia as a reflection of our true nature. What has been ignored is the fact that empathy has been evident during that entire time. De Waal points to a mass of examples of sacrifice, empathy, co-operation and fairness in humans and other animals’ species.

But there is a greater tragedy brewing if current and future business leaders think Amazon does represents the future of management. The techniques that Amazon uses to manage its own people can destroy the lives of individuals and undermine organizational performance. The decision to rank and yank is based more on a commitment to an outdated ideology than any real business benefits it might bring.

A commitment to short term profits at human and social costs can’t be the future of business in America can it? Is the proliferation of toxic work cultures really what we want for the sake of financial gain?

Comments Off on Good boss, bad boss

Good boss, bad boss

Posted September 28th, 2010 in Articles, Blogs by admin

Whether a boss is good or bad can have a huge impact on a company’s bottom line. Surveys show that the No. 1  reason employees leave a job is their relationship with their boss, not dissatisfaction with the work. With company’s competing for employees, relationships can be the key to productivity, and hence business results.

Stanford Professor, Robert Sutton, author of  Good Boss, Bad Boss: How To Be The Best and Learn from the Worst , asks and answers three key questions: To be a good boss, what do you need to accomplish, day after day; if you have a bad boss, what can you do about it; and what are the hallmarks of a good boss and the worst flaws of the bad boss?

Good Boss, Bad Boss is a sequel to Sutton’s earlier book, The No-Asshole Rule: Building A Civilized Workplace and Surviving One That Isn’t, in which he says in business and sports it is assumed if you are a big winner, you can get away with being  jerk.” He says such bosses and cultures drive good people out. Sutton claims bad bosses affect the bottom line through increased turnover, absenteeism, decreased commitment and performance. He says the time spent counselling or appeasing these people, consoling victimized employees, reorganizing departments or teams and arranging transfers produce significant hidden costs for the company. And he warns organizations this behaviour is contagious.

Sutton was inspired to write Good Boss, Bad Boss after receiving a deluge of emails, blog posts and articles provoked by his previous book.  Using real-life case studies and  extensive research Sutton provides in insightful and detailed description of what good bosses and bad bosses do.

He provides 12 behaviours that distinguish good bosses from bad ones:

  • Good bosses have an incomplete understanding of what it feels like for employees to work for them and realize it;
  • Success depends largely on being the master of obvious and mundane things, not on magical, obscure or breakthrough things;
  • While having ambitious and well-defined goals is important, the good boss’s job is to focus on small wins that help employees make a little progress every day;
  • One of the most difficult parts of a good boss’s job is to strike a balance between being too assertive and not assertive enough;
  • A good boss’s job is to serve as a human shield, to protect his employees from external negative influences — including the boss’s at times;
  • A good boss strives to be confident enough to convince people the boss is in charge and humble enough to realize  he can be wrong
  • A good boss aims to fight as though he was right, and listen as though he was wrong, and to teach that to others;
  • A boss’s best test of his leadership and the organization is a positive response to the question: “What happens when people make a mistake?”
  • A good boss encourages his people to innovate and test new ideas, and help them abandon the bad ones
  • A good boss realizes it’s more important to eliminate the negative than accentuate the positive;
  • A good boss knows that how he does things is as important as what he does;
  • A good boss knows because he has power over others, he is at great risk of acting like an insensitive jerk and not realizing it.

As an executive coach and leadership trainer, working with individually with executives and with leadership teams in organizations, I have been struck by how many performance and relationship issues often centre around the dysfunctional behavior of the leaders in the organization, and at the same time, the blame for poor performance or toxic relationships is aimed at employees. CEOs and business owners would do well to carefully assess the behavior of their managers when organizational or performance issues arise.

Follow me on Twitter: @raybwilliams