FCPA Compliance and Ethics Blog

June 10, 2013

The Business of Successful Transformation

Ed. Note-today we have a guest post from out colleague Tim Aikens, which originally appeared on Tim’s website, Azarel.com. 

This month I have chosen a couple of topics that most of us come across at some time in our career.  The toxic culture – being in an organisation that clearly has little or no moral compass.  Secondly how do you tell your boss he or she is wrong? Nobody is perfect, but the boss will often think they have a divine right to be . . Right!

Read on . . . . .

Toxic Corporate Culture – What is it and does it really matter?

A couple of months ago an article in the BBC internet news caught my attention: – ‘Australia London 2012 Olympic swim team ‘toxic’. The first paragraph read ‘Australia’s Olympic swimmers existed within a “toxic” team culture that led to bullying and misuse of prescription drugs, a report has found.’  The inference was that this culture had contributed to the poor performance of the team at the Olympics.

In a world where competition is increasing and becoming more global, a corporation will need to use every tool available to gain competitive advantage.  This would include having a ‘good culture’.  But all too often the drive for success leads to the opposite.  I googled toxic culture and was amazed to find a plethora of learned papers and news articles about the topic.  The issue would seem to be big and important.  But what is a ‘toxic culture’ and does it really matter?  I believe there is such a thing and long term it can destroy an organisation.

Firstly it is important to summarise what we mean by a ‘toxic corporate culture’.

A few extreme examples in recent history of toxic cultures are Enron, Tyco and WorldCom.  Others might include News International and Lehman Brothers. Some have imploded in a spectacular manner, others are still very successful. The single most common feature in all of them is the desire for financial success at almost any cost. Put more simply – greed – especially at the higher levels in the organisation.  There are other signs that appear to be common – bullying, lack of transparency, a closed circle of influence at the top, words (in the sense of written values or behaviours) not matching actions, placing unreasonable demands on staff (from hours to how they are expected to treat others), a win lose style (i.e. my gain is your loss – lots of internal competition).  There are many others, but from a review of the literature these are the main signs.  You might see one or more in your organisation; none are perfect, but when you begin to see a theme, it’s time to change something or move on.

Many organisations will exhibit some of these traits somewhere and some may be tolerated – the perpetually angry boss, a ‘long hours culture’, or one where rules are regularly ignored or abused.

Does it really matter? So what if life is hard at the workface?  Some staff members may be happy to be workaholics; others may enjoy the competitive aspects of a zero sum game when it comes to sales. As long as the company remains profitable and stock price keeps going up why worry?  At this point the question becomes partly ethical and partly business.  A leader might say I have to treat my staff this way in order to get results, others (both staff and workforce) might know no other way.

My view on the ethical side is yes, it really does matter.  How can we tolerate this kind of behaviour yet admonish other nations for corruption and slave labour.  It is perfectly possible to run a business well without even small amounts of toxicity.  A quick review of the Sunday Times Best Companies to work for will show that not only are they good places to work, but that they are also successful.  At an individual level, who believes that they will be more productive long term in a toxic environment?   A couple of years ago I read a great book entitled ‘The No Asshole Rule’.  The author is passionate about civilised workplaces and believes that they can be achieved and boost performance.  An organisation full of ‘assholes’ has to be toxic. The book is a wonderful antidote to this even if a little tongue in cheek at times.

From the business perspective the answer ought to be clear.  There is no long term future for a ‘toxic’ organisation as Enron and others have demonstrated.  Yet there are many businesses that have a reputation (deserved or otherwise) that are still doing business with little or no pressure to change (yet).  Most of them manage to keep the toxicity under control, whether it is the way they treat staff or the products they sell.  In many cases they are tolerated because the public likes what they make or do, or because the product is cheaper.

What to do?  You work for a company that expects long hours and pays poorly.  If you quit another job may be hard to come by.  You are a partner in a big firm that makes a lot of money, but there are some questionable practices.  Leaving means a big drop in salary.  For the hard pressed employee it is often a matter of comfort.  Can you stick it out and continue to work in an organisation that behaves so poorly?  For others it is a matter of conscience.  Is the way this organisation operates right, ethically and morally correct?  There are lots of books and articles that tell you how to deal with a toxic culture.  None of them will work if the leaders do not change and make a decision to operate their organisation in a morally, ethically and socially responsible manner!

What do you do when your boss is wrong?

Who would you rather tell that they had made a mistake and were wrong over something – Lord Alan Sugar or Sir Richard Branson?  They are very different characters and how you might approach them over an error might be very different. Some people are simply more approachable than others.  But move away from the character and ask the bigger question, how do you tell your boss when they are wrong?  There are two issues at stake in this situation.  Firstly, your relationship with your boss and your career – the consequences of handling the situation wrongly.  Secondly there is the business.  What are the implications for the business if the error is not taken on board and corrected?  When the boss is wrong – and you know it, it can be quite an emotive time.  Decisions can be made more through the heart than the head.  The direct approach may not always be the right one.  Here are a few things to think about before raising the ‘error’.

The situation.  If your boss is talking about how many times a football team has won the league and you know he is wrong, what is the impact on the business.  In a social setting he or she might be quite happy to be corrected or not (see next comment).  If the error has no impact on you or the business consider letting it slide.  What value do you add to a relationship by telling your boss he is wrong!

The other side of ‘situation’ is the environment.  If you are in a meeting, telling your boss he is wrong may not be a good idea.  In some societies (e.g. China) this loss of face is a big issue.  If the boss is wrong and it needs correction consider an indirect approach (see comment 3) that allows him to save face and you are not seen as the ‘bad guy’ who made his boss look bad.

The boss.  I have worked for just about every kind of boss there is.  Their personal nature and style are key to the approach you take:

  • Big ego.  Be very careful.  Do not say anything in a public setting unless really forced to. E.g. his error could impact a major business decision about to be made.  If possible, correction should be offline and in private.
  • Consensus Manager.  You are probably OK to deal with this upfront, but be careful about the words you use.
  • Sensitive Manager.  These people are often quite happy to be told they are wrong in private, but fall apart and can react out of character if confronted in a more public setting.  The language has to be very carefully chosen.
  • The grandstander.  Usually someone who wants to make a big impact.  If you announce the error he would look bad, if you don’t he could make a fool of himself, as well as lead to a poor decision. They often have big egos as well so treat them in the same way.

Recognising the type is an important first step, and of course it always pays to understand your boss in any job.

The approach.  How do approach the situation and what do you say.  From the comments above it is obvious that there is no one right answer.  However there are some guidelines that will help:

Think first!  The old saying, ‘engage brain before opening your mouth’ is universally true.  Think about three things. Should I actually say something, what should I say and how do I say it?  Examine your motives.

Style. You can go for the open and honest approach, but as noted above that may not always be best (for you or the person in error).  There are other ways:

–  the evidence approach e.g. ‘I understand your viewpoint, but have you considered . . .’. You are not actually saying the boss is wrong, but introducing new evidence and giving him or her the chance to change their mind.  However, with this approach make sure you really have good evidence supported by numbers.

–  use dialogue.  Rather than say ‘you are wrong’ start some dialogue and get into a debate if circumstances allow.

–  be positive and supportive.  You are there to support your boss not see them fail.  Make sure you say something positive and supportive as you open a debate.

–  get the boss to explain.  Rather than state what you might thing is obvious, get the boss to expand on their viewpoint.  This gives you and others opportunities to move into debate.

Words.  Be very careful about the words you use.  Avoid clichés like ‘with respect’ (which usually means with no respect), or ‘as you know’, or ‘I hear what you say’.  These and many others will be interpreted for what they are – a precursor to saying or implying you are wrong!  Try and use ‘yes AND’, not ‘yes BUT’.


Tim Aikens is the founder of Azarel, a consultancy which helps companies manage transformation and change. He can be reached at tim@azarel.com


This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. 

1 Comment »

  1. There is a very important point in what you say, which would imply that a toxic culture leads at some point or another to inevitable failure. In the Consulting world elements of this culture are very much there, as there is a general perception that competitiveness implies behaviours that would otherwise be seen as “negative”. What would be good is for people to understand that they can compete without killing their opponent (assuming that the colleague is actually an opponent..), which for many Companies would mean promoting a radical change in culture.
    Saying “yes, but…” to your boss may mean that your career progression slows down considerably, as you will be seen as challenging (which in fact you are…), so it would be interesting to see what people would do, or hear of positive outcomes from others out there.Very good of you to raise this issue.

    Comment by Patrizia de Windlegg-Wood — June 12, 2013 @ 2:24 am | Reply

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