Detoxing Corporate America

Christy Parker

National University

2011

What Toxic Leadership Is

• Leadership by those who are “maladjusted, malcontent…malevolent…[and] malicious.”

• Those who “rise to their situations in life over the carcasses of those who work for them.”

• Leaders who by inflicting “pain…[strip] people of their self esteem.”

Consequences of Toxic Leadership

• Humiliation, belittling & berating behavior destroys creativity, collaboration and job satisfaction.

• Public embarrassment and harassment lead to mental and emotional breakdowns and deviant behavior by subordinates

• Productivity slowed down or halted as subordinates try to emotionally recover or exhibit deviant behavior to stop from being controlled (e.g. –depression, fear, sabotage, absenteeism, and withholding effort)

• Destroys group morale over time with broken trust in the leaders ability to cope with and work well with others

Enron: Organizational Break Down

• Bullying, “explosive tantrums”, relentless criticism, disrespect, ruthlessness, callousness, shunning, manipulation, coercion, control and arrogance.

• Brutal appraisal system called “rank and yank”

• Enron corporation destroyed itself systemically, along with the financial firm Arthur Anderson

• Further research is needed to learn how this can be prevented in the future

The Army: A Change from Top Down

• Lower levels of toxic leadership in last 10 to 20 years due to creation of

Fieldbook 22-100

• 360 degree evaluations & climate surveys pros and cons

• Systemic and mandatory handbooks, training and certification for every level of leadership

• An understanding of how toxic leadership destroys units and productivity

• Board of Review with strong punitive ability/consistently applied to prevent inappropriate (toxic) leadership.

Military & Professional World Compared

Military Toxic Level

• 1/3 to 1/2 of military audiences stated they have had a toxic leader (Reed, 2010)

Professional World Toxic Level

• 1/3 to 85% range of people working in the corporate world stated having toxic leaders

• 90% of nurses reported verbal abuse by physicians

• 100% of banking profession stated having had a toxic leader – (Reed, 2009; Reed,2010)

Current Business Ethical Guidelines

• EEOC – prevents discrimination only

• BBB – oversees “consumer-to-business” and “business-to-business” complaints only

• Legal Court System – No capacity to systemically prevent psychologically abusive leaders and managers from retaining leadership positions

Other Professions Compared

• Required Licensing (e.g. – psychotherapy, physician, professor, accountant, engineer, nurse, police officer, pilot, lawyer…)

• Training and Certification (e.g. – (above) including trades as construction, tile setting, brick laying, cabinetry making…)

• codes of ethics strictly enforced by an objective board of ethics to ensure they do “no harm”

What Corporate World Is Missing

• Code of Ethics not systemic throughout corporate America

• Profession of leadership and management has no current law mandating licensing, training or certification

• No objective Board of Ethics

Review Boards & Systemic Objective Enforcement

Army

• Army Review Board Agency provides unified, objective governing body

• Mandatory training for each level of leadership

• Required certification

• Unethical and abusive behavior punished

Medical Field

• State medical boards

• Medical Agency & Hospital Boards

• Regular mandatory re-training and certification within specialty

• Unethical and abusive behavior punished by objective system

Call for Research

• Government Leadership & Management Act?

• State Board of Leadership & Management?

• Independent training and certifying agencies

• Mandatory licensing, training and certification with annual or regular renewal

Literary Findings

• Business & corporate world have no adequate system in place to diminish or prevent toxic leadership systemically throughout corporate America.

• Almost every other profession in the US has mandated licensing, training & certification backed by boards who uphold and objectively punish unethical behavior as outlined in their codes of ethics or codes of conduct.

• Unethical behavior including toxic leadership in the work place will not be controlled and diminished in corporate America until some punishableform of standardized licensing, training and certification becomes systemically required, in order to hold certain positions of leadership and management accountable.

Research Interviews

• Labor Laws first established in 1938 help protect children, establish minimum wage and protect employees from abuse and usury by their employers

• Just as important to protect their psychological health

• Research interview designed to obtain information from managers and leaders on current training programs and consequences for toxic leaders

• Inquiry into whether or not they felt mandated training, certification and licensing of leaders or additional laws added to labor laws would be beneficial

Toxic Consequences

• consistent pattern of stress leave• frequent illness• frustration• higher levels of stress at multiple levels• difficulty communicating• difficulty challenging or asking questions• Loss in productivity• lower moral• lack of motivation• more toxic office gossip• employee retention problems• monetary costs in the thousands• extra recruiting and training costs• psychological abuse leading to physical abuse• costs for training managers with executive coaches ($20,000)

• work not getting done• loss in sales• loss in customers• breakdown in office communication• more relational complaints filed• not focused on work (more mistakes)• more work related injures• lack of trust• workers comp• blame instead of solving problems• less creative• less likely to work overtime• vengeance• sabotage• exorbitant costs (surveillance systems needed to deter sabotage)

• What managers and leaders had to say about what they’ve seen in theirs and other organizations who were lead by toxic leaders.

Positive Outcomes from Training

• Better Communication• More creativity• Fewer complaints• Employees solving their own relational problems• Better teamwork• Higher employee retention• Fewer mistakes• Higher standards being met• Productivity up (by 93% in some cases)• Reduction in customer-care expenses (up by $20 Million at Sprint)• Higher trust levels• Fewer illnesses and reports of stress• Better collaboration

Staying Viable in the Global Market

U.S. competing with more countries in the global marketplace

Cost effective emerging countries able to cut U.S. out of the market due to low cost of labor

U.S. must stay competitive by being innovative AND cost effective

U.S. has a better chance of staying viable in the global market place by creating psychologically safe work environments which deter and lower costs, and increase production and revenue

(Research supports this)

Labor Laws Stuck

• Labor Laws stuck on the first two levels of human hierarchical needs of providing physical safety, and basic monetary survival needs (Maslow, 1968)

• We need to broaden our perception of what every U.S. citizen is entitled to, including the right to work in psychologically safe environments

• Are we willing to protect the psychological health of our greatest asset, our citizens, as much as their physical health and pocket book

• There is a difference between a boss who is tough on us, who asks for better, and a toxic boss who belittles, humiliates and berates. We need to define the difference and set a standard that managers and leaders are not allowed to go below

Managers Disagree then Agree

• At first managers were afraid of mandated laws and licensing of leadership

• Concerned about whether or not they would be protected from angry employees that didn’t like them

• After being reminded that labor laws such as minimum wage and work place safety would not have come about unless mandated, they conceded that mandated certification and licensing had its place

• Agreed with certification and additional labor laws to cover psychological abuse but do not feel we are ready to start managing the entire business world through licensing yet; but plausible in the future

• One manager felt that certification and training should be mandatory while another manager finally relented that adding it to the labor laws and requiring certification would bring the topic to the publics attention

Manager Concerns

• What does psychological abuse look like?

• How consistent does it have to be?

• Would there need to be a witness or others who were also abused?

• Who would the offending leaders be accountable too?

• Would there be a state run board if it became a law?

• Would re-certification be necessary regularly?

• Would the leader or the organization be fined?

• Fear of losing license to practice held strong emotional reaction!

Interview Findings of Managers who use Training

• Training found to make considerable difference

• Toxic leadership and behavior minimized

• Company became more viable and competitive in the marketplace

• Production improved

• Costs lowered

Problem and Further Research

• Whether or not to see the need for psychologically healthy work environments as a law with negative consequences or as a suggestion with altruistic rewards or incentives?

• Performing research interviews with only management, and not consulting taxpayers who are in subordinate level positions, creates a bias one sided view, based on fear, of whether or not there is a need for standardization and regulation in the field of leadership

• Further research would need to be performed in order to ascertain what subordinates think on the subject

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