“I felt a great disturbance in the force …

I fear something terrible has happened.”

— Obi-Wan Kenobi, Star Wars (1977).

Between April and September 2021, 24 million Americans left their jobs, an all-time record for attrition. Leaders continue to reflect and seek to understand WHY employees left at such a breakneck (and bottom-line breaking) pace with a goal to developing solutions to avoid such staggering losses in the future.

Why do employees quit?

Many people believe compensation is the main contributor to employee departures, but according to an MIT study, compensation didn’t even make the top 5. The number one reason employees quit is CULTURE. In fact, culture was 10 times more influential than compensation to predict the rate of attrition.

Think about that.

Your own CULTURE is driving your employees out the door.

And if employees stay in a toxic culture, it can be equally or more harmful.

Mental unwellness. Employees who experience a toxic corporate culture are more likely to suffer from greater stress, anxiety, depression and burnout.
Costly. Dysfunctional or toxic corporate culture has a detrimental impact on productivity and expenses due to employee disengagement, health care costs, absenteeism, disability and turnover.
Reputational Harm. In our highly connected world, employees have any number of very public platforms (e.g., Glassdoor, Indeed, LinkedIn) on which to share their negative feedback on company culture. So your organization’s toxicity isn’t just an isolated, insular issue, it has the potential to go VIRAL.

↗ Culture = ↗ Financial Performance

More than 90% of CEOs and CFOs believe there is a direct correlation between a healthy corporate culture and strong financial performance, and consider culture more important than all other factors, including strategy, innovation, and brand in terms of its impact on company results. Culture was ranked the highest element that contributes to long-term company value. Executives consider culture as the foundation from which they make decisions on ethics, innovation and value creation. And while culture is considered the most important aspect of a business in all respects, more than 80% of CEOs and CFOs confess their organization’s culture is not as healthy as it should be.

So let’s make this really clear.

CEOs and CFOs know culture is the most important factor to

FINANCIAL PERFORMANCE

AND

they have the solution - IMPROVE CULTURE.

What is stopping them?

“The Force”

Corporate culture is like “The Force.”

It’s a mysterious energy that binds people together, inspiring them, and creating a deep commitment to the values and direction of the organization.

So, wielding “The Force,” (fixing a toxic culture) seems ambiguous and arduous (not to mention dangerous with all those lightsabers in the office).

This explains why organizational leadership is paralyzed. Where do executives even begin?

To translate “The Force” into more tangible factors, corporate culture can be based on: shared values, attitudes, operating standards and beliefs that are rooted in organizational goals, strategies, structures and approaches to labor. But even defining culture with more specificity leaves leaders scratching their heads in wonder when strategizing solutions to fix a toxic corporate culture.

Let’s break it down even further, shall we?

MIT identified and synthesized 11 meta-analyses on toxic culture and found the three most powerful predictors:

toxic LEADERSHIP,

toxic SOCIAL NORMS,

poor WORK DESIGN.

Leadership.

“Named must your fear be before banish it you can.”

— Yoda

It is not surprising that toxic leadership is the best predictor of toxic culture. Leaders assign the work, lead the communication, set expectations, reward or discipline, and otherwise model behavior to their direct reports and onlookers. The truth is that leaders cannot improve culture unless they are willing to do the work themselves – hold themselves and other leaders accountable for toxic behavior. The “tone from the top” is outdated and needs to be upgraded by incorporating effort on the part of leaders to “action from the top.”

The Sith used the dark side of The Force (culture) by indulging in raw emotions such as anger, greed, fear of change, the inability to let go. They were consumed with gaining power, no matter the cost. This behavior bred holistic suffering.

***Alternatively, the Jedi used the light side of The Force (culture) to foster calmness, selflessness. They listened to The Force for knowledge and defense.***

“Being a Jedi is not just about power, or lightsabers, or even skill with The Force. It is about connection. Being part of something bigger. I am stronger as part of the Jedi Order than I could ever be alone.”

— Obi-Wan Kenobi

Question: Are you ready to look in the mirror, find imperfections, and make some changes to model healthy behavior for the employees observing you?

“Try not. Do … or do not. There is no try.”

— Yoda

Social Norms.

“You will never find a more wretched hive of scum and villainy.”

— Obi Wan Kenobi

According to MIT, the second predictor of toxic culture is social norms. Social norms define what behavior is expected and accepted among employees. Social norms should reflect the organization’s values. Values statements are words that organizations believe represent how they conduct business.

But do organizations live their values?

Organizational values should be operationalized within team behavior, which in turn create social norms. If values function correctly, we should be able to walk into an organization and feel “The Force.” If people are an organization’s most important asset, shouldn’t we know how our employees experience organizational values?

Question: Are you ready to ask employees how your company values are demonstrated to them and then develop new social norms to improve employee experience?

Work Design.

“Use the Force, Luke”.

— Obi Wan Kenobi

Lastly, the third predictor to a toxic culture, according to MIT, is work design, which is defined as the content and configuration of one’s work tasks, activities, relationships, and responsibilities. Think of work design in “The Force” as the flow of a river. Is it strong, unimpeded, and clear OR murky and filled with obstructions? Work design that contributes to a toxic culture include factors like: micromanagement, vague expectations, uncertain deadlines, lack of feedback, unmanageable workload, and inflexibility.

Question: Are you ready to streamline work and remove unnecessary or redundant tasks; provide clear responsibilities and expectations; offer some autonomy and teach employees how to manage stress and anxiety through mental health skills training?

Evolution Starts with the C-Suite

“Stay on Target”.

— Gold Five

Research shows the CEO is the single most important factor in setting corporate culture. Only the C-suite has complete and transparent access to the levers that contribute to culture: employment decisions, investing in interventions, key performance indicators, and the ability to influence the implementation and commitment to the action plan. It can be humbling for senior leaders to acknowledge they may contribute to a negative culture in implicit and explicit ways. But, acknowledging one’s own contribution to a problem is the most important step to correcting it.

Because organizations vary greatly, e.g., industry, people, location, circumstances, business model, there is not a single solution leaders can employ to improve culture. It requires a targeted assessment, evaluation, and customized action plan. It also requires senior leadership to be fully committed to the process and the action plan – including their own personal action plan.

So, corporate executive, business leader, HR professional, are you ready to invest in your business in a new and meaningful way? Let’s get started.

“May The Force be With You.”

— Princess Organa Leia

Toxic Corporate Culture - the Force is NOT with you.