I originally wrote today’s post for CMSWire. It appeared on their site on July 21, 2022.

Probably one of the hottest topics in the business world today is the Great Resignation (Reshuffle, Reset, Renegotiation, Rethink, Reimagination, etc.). I love it. I’ve been talking about listening and focusing on employees since my days at J.D. Power and Associates 30 years ago. Clients told me back then, “Nah, we’ll focus on employees later. Let’s just listen to customers now.” Guess what? It’s later. Much later. Maybe too late(r).

Why is it that employees have always been an after-thought for most companies? You don’t have a company without employees, so why are they lower on the list of priorities? If you don’t think they are, think again. Check out this quote from a 2017 Industry Week article. (Plus, you should know from your own experience as an employee!)

The Ohio Manufacturing Institute recognizes five major stakeholders in organizations. In order of importance they are: customers, owners, managers, employees, and community. Without products, and customers who buy them, there is no company. And without owners who invest capital, there is no future.

So, never mind the fact that if there are no employees to design, build, sell, deliver, install, or service those products, there won’t be a need for customers to begin with!  

Fortunately, not all manufacturers think this way. For example, Bob Chapman, CEO of Barry-Wehmiller, is certainly an exception. More leaders should follow his approach, and many have attended his leadership institute classes to do just that. Bob’s approach is called truly human leadership, and he measures success by “the way we touch the lives of people.” Rather than viewing employees as cogs in the wheel to (personal) leadership and business success, he views them as humans, as sons and daughters, moms and dads, brothers and sisters.

So, let’s go back to the topic with which I started this article, the Great Resignation. Let’s consider this: people don’t leave managers; they leave the culture of the organization. We know that culture is the foundation of the organization and that the culture is shaped by the worst behavior a leader is willing to tolerate or allow. So, actually, it’s both – employees leave cultures and they leave managers. You can’t think of one without the other; they are quite intertwined. If leaders (yes, for the purpose of this argument only, let’s assume managers = leaders) set the tone for the culture, and the culture isn’t a good fit for the employee or is/becomes toxic, employees will leave.

MIT Sloan School of Management recently took a look at a ton of data across a couple of different sources to find the greatest predictors of turnover during the Great Resignation. Most of the conversation in social circles has revolved around wages and employees dissatisfaction with those wages at the root of the Great Resignation. Instead, compensation was actually 16th on the list of predictors of turnover. Corporate culture was the top predictor, specifically a toxic corporate culture, and was 10 times more important than compensation in predicting turnover.

Interesting, for sure. But what is a toxic culture? What does that look like? And how can you fix it?

What is a toxic culture?

The folks at MIT Sloan School of Management took a look at the key attributes of a toxic culture. They came up with what they referred to as The Toxic Five, i.e., a toxic culture can be described by behaviors that are: disrespectful, non-inclusive, unethical, cutthroat, and abusive. These attributes were found to have the biggest negative impact on how employees rated their companies’ cultures when submitting reviews on Glassdoor.

As another perspective, a Forbes article from 2017 summarizes a list of five attributes of a toxic culture: leaders are narcissistic and believe they can do no wrong and don’t think the rules apply to them; employees drown out the environment by listening to music and commiserating through back-channel chats and texts; there’s a lack of transparency about everything; the rules aren’t applied equally across all employees, including leaders; and employees often call out sick, whether they truly are or not.

I’ll add a few of my own thoughts to those. The toxic culture is one of distrust, and that includes things like: there’s a lack of leadership integrity; employees are micro-managed and certainly not empowered; office politics are rampant; mistakes are viewed as failures and are punished (severely); there’s a fear of recourse, constantly; and employees aren’t asked for feedback about the experience or for input about anything. Those are just a few attributes; there are many more.

What are the outcomes of a toxic culture?

Nothing good comes out of a toxic culture, and that’s the whole point of this article. Employees leave. But before they leave, they…

  • Are not happy
  • Are stressed, burned out, and disengaged
  • Are less productive, and productivity continues to decline
  • Don’t refer others to work for their employer
  • Talk badly about the company

What else? The company can’t hire good people or the right people. (Think about those Glassdoor reviews. Potential employees are researching your company before they take a job offer – or before they even apply.) And the customer experience suffers, as does the business.

How do you fix a toxic culture?

A toxic culture cannot and does not thrive. (Well, it can, but the business is ruined in the process.) The business doesn’t thrive, especially if you consider some of the outcomes mentioned above. So, how do you fix a toxic culture?

According to the MIT Sloan School of Management article I mentioned earlier, there are four items that are leading predictors of employee retention: lateral career opportunities, remote work arrangements, company social events, and offering predictable schedules. You may be scratching your head on some of these, but as I read their explanations and compared them to what I’ve been hearing lately, I’ll keep an open mind.

Lateral career opportunities might surprise you, but I think there’s an important consideration here. Not every employee wants a promotion or wants to move up the corporate ladder. And, quite frankly, not every employee is manager material. Managers should be having regular conversations with employees about what they’re doing today and what they’re actually passionate about doing. Perhaps they came into the company in one role but have evolved over the months/years and have new interests or aspirations. Ask: “If you weren’t in this position, what would you (rather) be doing today? What are you passionate about?” (And then act on what you learn.)

Social events are budget-friendly ways to provide an opportunity to network and build connections within the organization, learn more about your colleagues, and make new friends. (Gallup tells us that’s important to employee engagement.) Offering remote work options is no surprise after all we’ve heard about this over the last two or three years. And predictable schedules are really important for customer-facing employees whose schedules flex with day of the week, time of the week, promotions, traffic/volume expectations, etc.

I won’t argue with the research, but I will add a couple of ideas. Start with the culture, and the rest will flow from there. Of course, this means that leaders must design the culture they desire rather than allow the (toxic) one that will form if they don’t make culture a priority. Leaders have to be all in because, as Larry Senn, chairman of Senn Delaney, says: the culture is the shadow of the leader. What leaders say and do is reflected in what followers (employees) say and do.

Define your core values and make sure everyone knows what they are and what they mean. Socialize and operationalize them. And that includes hiring, firing, and promoting through the lens of the core values. Yes, I’m referring to culture fit. When you hire people who ultimately don’t live your core values, the culture will suffer. And (the wrong) employees will leave.

And, finally, you can’t forget the obvious, the employee experience in general. You’ve got to understand employees (i.e., employee feedback, HR analytics, employee personas, and employee journey mapping). Hear what they’re saying, and use the data and insights to design and deliver the experience they expect and desire.

The Great Re[insert your preference here] is really the great awakening. Shining the spotlight on employees should have happened long, long ago. Don’t let another amazing employee leave your company. Talk to employees. Regularly. Find out what a great experience looks like. Improve the experience. And focus on your culture. Make it a healthy one. Toxicity kills.

Corporate culture matters. How management chooses to treat its people impacts everything for better or for worse. ~ Simon Sinek

Annette Franz is an internationally recognized customer experience thought leader, coach, speaker, and author. In 2019, she published her first book, Customer Understanding: Three Ways to Put the “Customer” in Customer Experience (and at the Heart of Your Business); it’s available on Amazon in both paperback and Kindle formats. In 2022, she published her second book, Built to Win: Designing a Customer-Centric Culture That Drives Value for Your Business (Advantage|ForbesBooks), which is now available to purchase on Amazon, Books A Million!, Target, Barnes & Noble, and thousands of other outlets around the world! Sign up for our newsletter for updates, insights, and other great content that you can use to up your CX game.

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