How to fix culture and end the Great Resignation

According to new research released in MIT Sloan Management Review, the three most potent predictors of toxic workplace behavior are toxic leadership, harmful social norms, and work design. By identifying and addressing these factors, leaders can dramatically improve employees’ experiences and minimize unwanted attrition, disengagement, negative word of mouth, and other costs associated with a toxic workplace.

The authors’ previous research identified toxic culture as the primary driver of the Great Resignation, more than ten times as decisive a factor as compensation.

“Toxic workplaces are far too common. Approximately 1 in 10 workers view their workplace culture as toxic, and they are sending a clear signal,” said coauthor Donald Sull, a senior lecturer at the MIT Sloan School of Management and cofounder of CultureX. “They will no longer tolerate disrespect, exclusionary behavior, abuse, and other toxic behaviors. Organizational leaders face two choices: detox their corporate culture or lose the war for talent.”

More than 90% of North American CEOs and CFOs believe improving their corporate culture would boost financial performance. Yet, most executives acknowledge that their organization’s culture is not as healthy as it should be.

If the corporate culture is critical and needs work, why don’t top leaders do more to improve it? Many aren’t sure where to start, but time is crucial as the toxicity from a bad boss can linger long after they depart a leadership position.

Building on the previous research, Sull and coauthor Charles Sull, cofounder of CultureX, use AI to measure and improve corporate culture. In “How to Fix a Toxic Culture,” they share an authoritative, evidence-based framework that managers can use to perform a cultural detox in their organizations.

This includes interventions across the three main drivers of the toxic culture

• Leadership: Leaders cannot improve corporate culture unless they are willing to hold themselves and their colleagues accountable for toxic behavior. CEOs can keep cultural detox on the agenda by linking cultural improvements to bottom-line benefits, such as lower attrition. Middle managers are 2.5 times more important in predicting employee misconduct than companywide factors.
• Social Norms: Social norms, defined as behavior expected and acceptable in day-to-day social interactions, exist within organizations, specific teams, or departments, and they shape subcultures within the company. Toxic social norms increase the odds that even good people will behave poorly. Promoting uncollaborative employees to management can foster cutthroat subcultures that ultimately hurt the bottom line. Toxic leadership can negatively reshape social norms and influence behavior far beyond any jerk manager’s tenure, persisting through multiple leadership changes.
• Work Design: More than a century of research has pinpointed a handful of work design elements, such as overall workload and conflicting job demands, that consistently predict critical outcomes, including toxic behavior. Dozens of factors go into work design, but a few specific aspects are fundamental in predicting employee stress. When rethinking work design, it’s best to focus on elements of the job known to influence employee stress, such as reducing nuisance work, clarifying job descriptions and responsibilities, giving employees more control, and helping to reduce stress and improve sleep.

“Cultural change requires a holistic approach incorporating multiple interventions and a sustained focus over time. Without a commitment from the top team, any organization-wide culture change — including a cultural detox — is destined to fail,” commented Sull.

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