How to foster a non-toxic culture that is conducive to high performance
Tags: Manager Development, Leadership, Xcelerator, Leadership Development

How to foster a non-toxic culture that is conducive to high performance

The link between trust culture and performance, and steps you can take to build this culture.

“Culture is the soul of the organization — the beliefs and values, and how they are manifested. I think of the structure as the skeleton, and as the flesh and blood. And culture is the soul that holds the thing together and gives it life force.” — Henry Mintzberg

In 2001, the behemoth Enron collapsed in the largest bankruptcy known to American history at that time, wreaking havoc on the Wall Street. Besides drawing attention to accounting and corporate fraud, the Enron scandal exemplified how a culture permeated with fear and toxicity could not only bring a company down to its knees, but send it directly to its grave!

A toxic culture is known to have a negative impact on morale, productivity, and creativity due to the high levels of stress induced. Research shows that at a neural level, acute uncontrollable stress weakens the influence of the prefrontal cortex which is the control center for concentration, planning, decision-making, and judgment. But you don’t need research to know you can’t really show up as your best self or think straight when you’ve just been humiliated in front of your colleagues by your boss.

In the case of Enron, toxicity was reported to trickle down from the top levels of the company, with executives obsessively pushing for huge earnings’ growth at the expense of integrity and ethics — in some cases deriding employees for not being loyal when they refused to perform illegal accounting procedures. This built a fear-based culture where employees did not question authority to avoid punishment and consequently the prevalent fraud destroyed the company.

The link between trust and performance

Paul J. Zak, Harvard researcher and author of “The Trust Factor: The Science of Creating High Performing Companies,” discovered that “compared with people at low-trust companies, people at high-trust companies report 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, and 40% less burnout.”

His research also shows that high-trust companies also had one-half the employee turnover of low-trust companies and moving a company up one quartile in organizational trust results in the average employee producing an additional $10,185 in revenue every year.

In a different study code-named “Project Aristotle,” Google set out to determine what makes teams successful, and trust — or psychological safety — emerged as the most important factor. As mentioned in the insights from this research, “In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.”

As a leader, you need to foster a healthy trust culture and then continuously monitor it to make sure it doesn’t turn toxic. So the question is, how do you do this? What intentional steps can you take? Here are 2 steps to start off.

The first step to building a trust culture is to create transparency

Make important and relevant information easily accessible to both your clients and your team members. Not only does transparency improve trust, which leads to lower overall turnover rates, but it also improves productivity, as employees get more motivated when they feel like they’re in the loop.

While it may be tempting for you as a leader to give negative announcements a positive spin, such PR-laden comments can both be frustrating and patronizing to your employees. If the ship is sinking and the house is on fire, be honest about it, ask for help, and include your team in the discussions.

In his book, The Hard Thing About Hard Things, businessman and investor Ben Horowitz talks about transparency in a section titled, “CEOs should tell it like it is.” The benefits are many. Besides improving trust, there are simply more brains working on organization problems, resulting in faster solutions. Horowitz also writes that counterintuitively, it is indicative of a healthy culture for bad news to travel fast “as a company that discusses its problems freely and openly can quickly solve them. A company that covers up its problems frustrates everyone involved.”

Embody Core Values Within the Organization

It’s one thing to hang your company’s core values on the wall, but a totally different thing to bring them to life within an organization. Living company values usually starts from the top, with you leading by example and allowing those values to guide decisions on who to hire, fire and promote.

Our CEO, Fred Swaniker, recently published an article titled, 5 Reasons Not To Work With ALX to address common misalignments between personal and organizational values. The more employees are aligned with the company’s core values and mission, the more likely their productivity, levels of engagement and satisfaction would be higher. According to the report titled State of Employee Engagement, that compiled data from thousands of organizations across 157 countries worldwide, “33 percent of employees believe their company’s core values don’t align with their personal values”, which is bad news for job satisfaction and employee turnover.

Besides ensuring all new employees are made aware of the company’s core values during on-boarding, company values need to be reinforced in all communications and meetings. It is also important to recognize and reward values-centric behaviors through written recognition or peer-voting opportunities.

Having read all that, what is your company culture like? What steps are you taking to build trust within your organization?

About the author: Amina Islam is the Innovative Learning Lead at Xcelerator where she works with the product team to develop new programs. She received her Ph.D. from Masdar Institute of Science and Technology in 2017. Amina is always excited about new ideas and explores them in writing on her Linkedin profile and ahscribbles.com.

At Xcelerator, we are working with top global companies to develop managers into high impact leaders. Interested? Learn more.