4 TYPES OF TOXIC CULTURES

by Matt Thomas

Last week we laid out four types of healthy organizational cultures. This week we’re going to hit on the other side of the spectrum, the four types of toxic cultures. In our contracts, we reserve the right to cancel an engagement in the first 30 days. The reason this clause exists is that on occasion while executing a culture assessment we surface significant dysfunction or toxicity that we believe we will not be able to overcome. In short, it is impossible for us to recruit with integrity if the organization we are recruiting for is ultimately a toxic environment. If we aren’t excited about the opportunity, then we can’t sell it. It is that simple. 

In short, it is impossible for us to recruit with integrity if the organization we are recruiting for is ultimately a toxic environment.

In some of our strategy and leadership engagements we have been brought in to identify the source of the toxicity and help the client lay out a path towards health. While toxicity can exist at every level of an organization it is no surprise that it is most detrimental at the leadership level. It is impossible for an organization to be a healthy vibrant place to work if the leadership is dysfunctional. Here are four types of toxic cultures:

Scarcity

A scarcity culture is one in which the organization is always in bootstrap mode. This is not a “lean” organization but rather one in which financial stress seems ever-present. The leadership is scared to make any investments in the growth of the organization because they are uncertain about the return. Team members are underpaid, marketing budgets are non-existent, and people generally operate day to day in a cloud of fear. We see this quite often in non-profits or underfunded startups. 

Team members are underpaid, marketing budgets are non-existent, and people generally operate day to day in a cloud of fear.

Autocratic

An autocratic culture has a leader at the top with a “my way or the highway” mentality. What he or she says goes. Period. End of discussion. There is very little collaboration and employees tend to do what they’re told or are shown the exit. As a pure business these organizations can be very profitable but they are less than desirable places to work. Most team members are viewed as cogs in the wheel, nothing more. We see this most often in large public companies led by big personalities. 

As a pure business these organizations can be very profitable but they are less than desirable places to work. Most team members are viewed as cogs in the wheel, nothing more.

Exploitative

If we had to pick the worst type of culture to work in this would be it. An exploitative culture is one in which employees are seen as resources to be leveraged for profit. Vulnerability and courage are squelched as everyone lives in a constant fear of being used by a manager. Very few team members will be willing to take a risk in these environments and thus innovation is minimal. We see this most often in old school founder led businesses where the leader doesn’t care about their people, clients, or vendors. 

Careless

A careless culture is one in which financial wisdom is lacking. Money is spent frivolously and financial stewardship is an afterthought. You’ll find these organizations often have a kegerator in their break room and have recently closed a new round of funding. Leaders are not worried about generating a profit, only making a name for themselves. We see this most often in tech startups or private equity groups. 

You’ll find these organizations often have a kegerator in their break room and have recently closed a new round of funding.

If you lead an organization that lands in one of these categories you need some help. It doesn’t have to be this way. If you work in one of these cultures, give us a shout.