Toxic Leadership in Companies – The Impact of Poor Leaders
Toxic Leadership and How Poor Leadership Destroys Companies and Motivation
Are you considering changing your company and wondering if the new place has a good corporate and leadership culture or if toxic leadership prevails?
You can learn a lot by looking at the top of the company about how things are likely to be at other hierarchical levels.
We all know the saying:
“The fish stinks from the head.”
Researcher Kai C. Bormann from the University of Bielefeld and Christina Horn, Michael Grafits, and Christopher Hansen have studied this topic in depth. Their research report not only considered toxic leadership cultures but also examined whether there is a difference when a company is a family business.
And the saying seems to have a kernel of truth…
Definition: What is Toxic Leadership?
Toxic leadership refers to the behavior of leaders who use pressure, fear, lies, slander, bullying, etc., to lead others and focus on their own advantage. They exhibit egocentric behavior and greed, with “walking over corpses” being part of the leadership culture. Toxic leaders communicate little, are easily irritable, aggressive, and never take blame.
Toxic Leadership is Contagious
What happens to the best leaders and employees when they are constantly exposed to a toxic leadership culture?
Once they realize that they don’t want to work in a company with such a leadership NON-culture, some of these leaders and employees will leave the company fairly quickly.
Other employees will internally resist the poisoned atmosphere. They will reject it and orient themselves according to their own inner and moral compass.
But what does such an employee, such a leader, do when the higher leadership levels constantly rule with pressure and fear?
At first, they will still resist and try to hold a mirror up to these toxic leaders.
But since this doesn’t help, they will eventually stop doing so.
They will continue to try to lead their own employees in a motivating, engaging, and positive way. However, as soon as performance does not meet expectations, they will get a stern talking-to from their direct superior.
And it goes further:
In toxic leadership cultures, a superior will not miss the opportunity to personally make an example of someone or at least scold their team or department and threaten consequences.
I regularly encounter this in leadership training sessions and also receive messages from participants in my online training courses for leaders that they continue to strive to be good leaders despite a poisoned corporate climate and not to become infected.
But with increasing pressure, especially during economic difficulties, this becomes almost unbearable.
Our good leader then has to absorb all the “poison” and not pass it on to their employees.
A Herculean task.
Therefore, the danger is very high that our good leader will slowly but surely become desensitized and adopt at least slightly toxic behaviors themselves.
Toxic Leadership and the Stanford Prison Experiment
Do you know the Stanford Prison Experiment? This was the psychological experiment conducted from August 14-20, 1971, under the direction of psychology professor Philip Zimbardo, which was stopped due to its shocking course.
In this experiment, ordinary students were randomly assigned to be either prisoners or prison guards. Within a very short time, the prison guards (students!) turned into sadists who tortured and mistreated their “prisoners.”
Anyone who believes they can resist a toxic corporate and leadership culture in the long term should revisit this experiment.
You can find the experiment here: https://www.youtube.com/watch?v=sZwfNs1pqG0&rco=1
Toxic Leadership Can Be Tempting
Toxic leadership is not only dangerous because it is contagious in the long run.
It is also incredibly dangerous because there are often very successful entrepreneurs and leaders who are extremely successful despite their toxic leadership styles.
People who are obviously only interested in one thing: their personal success.
However, this pursuit of personal success means that, for example, a company led by such a toxic CEO behaves very aggressively in the market, burns out employees in large numbers, and rolls over the competition.
And thus, at least measured by revenue, profit, or market presence, is very successful.
Can we then blame a young leader for wondering why they themselves shouldn’t act just as aggressively and selfishly?
Why shouldn’t they demand the impossible from employees, drive them to burnout, and rule only with fear and pressure?
Especially when their toxic behavior also attracts the positive attention of the boss, all dams break.
In a time when one wonders who still credibly conveys and exemplifies moral values, toxic leadership is very tempting.
https://elements.envato.com/pondering-business-strategies-77AUPLM
Toxic Leadership is Accepted for Too Long
A partner in a consulting firm once told me about another partner at the firm. This partner treated his own employees like dirt.
He called employees at 11 PM or on weekends and expected any task he demanded to be done immediately.
And if it was picking up his shirts from the cleaners. Not a single employee wanted to work for this partner. But they had to.
All the other partners saw this behavior and also noticed how it destroyed the morale and motivation of the employees.
But nothing happened.
Because this partner was an absolute revenue machine. He was the cash cow of the consulting firm and achieved margins no one else could.
Until one day, clients complained, and the partnership was forced to part ways with him.
And suddenly it turned out that no client really liked working with the partner, but they had fallen for his charm.
On the other hand, he delivered results so quickly and so well that his impossible behavior was accepted.
The fact that these results were only so quick and good because he ruthlessly squeezed the internal team was something no one wanted to see.
With the departure of the toxic partner, the entire climate changed abruptly. Both among the employees and among the other partners. And the business developed better than ever before.
Toxic Leadership is Often Accepted for Too Long
According to a study by Kai C. Bormann, which used more than 35,000 data sets from the rating platform kununu.com, toxic leadership behavior could be detected in 85% of German companies.
Not everywhere consistently, not everywhere at all levels, and often only in individual corporate areas.Nevertheless, 85% is an incredible percentage.
In one out of five companies, there is even a pronounced toxic leadership climate – regardless of the company’s size.
Toxic Leadership Harms Performance
As mentioned in the example of the consulting firm, a company can be very successful despite a toxic leader. However, only if viewed in the short term.
Looking at the whole picture, a toxic leadership culture can, among other things, lead to:
- High costs for recruiting new employees due to significantly increased turnover.
- Employees not bringing problems to the attention of leadership because leadership does not want to hear about problems – leading to dramatic consequences in the end (as with Boeing’s fatal 737MAX fiasco).
- Employees shirking responsibility, with the aftermath only becoming visible years later – when the toxic leader is no longer in the company.
- Employees suffering long-term illness or burnout due to psychological stress, resulting in the company having to pay compensation.
- Leaders and employees interpreting or breaking rules and laws very creatively, causing enormous image and economic damage to the company, up to the collapse of the company (e.g., Wirecard or the Diesel scandal).
Additionally, toxic leadership requires enormous effort to intimidate and “monitor” employees. This not only incurs costs but also significantly reduces the productivity and innovation capacity of the entire workforce.
Conclusion on Toxic Leadership
Unfortunately, toxic leadership is very common. Given economic difficulties, an increasingly aggressive attitude in entire segments of the population, and “role models” who can even become presidents of countries with their aggressive “me-first” culture, we will likely see an increase in toxic leadership behavior.
But you don’t have to join in!
Ensure that you team up with people, employees, and other leaders and set an example of honest, motivating, transparent, yet also consistent leadership.
Because one thing we must not forget:
Bearing leadership responsibility is not a popularity contest.
As leaders, we must also make tough decisions. Decisions that some employees will not support.
But making tough decisions is not toxic; it’s part of the leadership task.
Further Information on Toxic Leadership:
You can access the research report by Kai C. Bormann and colleagues here:
A Trickle-down Model of Abusive Supervision and Firm Performance in Family and Non-Family Firms
You can find a quick summary here:
