Why I’m Secretly Glad This Company Failed—And What Their Failure Can Teach Us About Culture
Backstabbing. Scapegoating. A lack of accountability. Low morale. Negative cliques. Playing favorites. Persistently poor communication. These are a few telltale signs of a toxic work culture.
We observed many of these traits during our interactions with a client we’ll refer to as Company X. Leaders at Company X hired us to help them with their performance marketing a few years back.
We were initially excited to work with the company, it was operating in a dramatically growing industry with a lot of momentum behind it. In fact, the macroeconomics of its industry was so strong that several of the largest players had recently gone public.
Even though they were the client and we were the vendor, the company’s employees often spoke down to our team disrespectfully and showed little regard for our time.
Examples included continually asking for work clearly out of scope and repeatedly not showing up for scheduled meetings. On one conference call their team even hit “mute” to have a side conversation about our team. The client contact was also perpetually late in getting necessary information to us that our team needed to hit deadlines.
In one scenario, our contact’s boss got on the phone and screamed at our team members, accusing us of not doing our job because we didn’t “manage” our contact or divulge his lack of responsiveness to his superior, despite the superior being copied on all communications.
I never wish for anyone to fail, but I have to say it was at validating to learn that Company X went out of business within the year. It confirmed for me that even a company with a good product in a hot industry cannot achieve sustainable success if its leadership creates a culture that encourages blame and backstabbing as opposed to accountability, respect, and collaboration.
The crux of the issue is that, all too often, growth companies are fixated on their growth and products rather than their underlying culture and sustainability. As a result, these companies often soar in the short term but struggle to experience lasting success.
It’s like steroids: They’ll help a person build muscle fast, but the long-term consequences (e.g., health problems, aggressive behaviors, and inhibited growth) far outweigh the short-term results. In many ways, the only hope for such companies is to be acquired; they are not set up to survive in the long run.
Culture exists in every organization, whether by design or by default. While it’s in everyone’s interest to maintain a healthy, collaborative, productive, respectful, and, dare I say, nice culture, one of the key responsibilities of the leader is to direct it and cultivate it with intention.
Culture is the operating system that runs the business. If your company’s culture isn’t carefully nurtured and cultivated, it can quickly become your biggest liability and ruin even the grandest vision. We’ve seen this firsthand.
In the age of companies like Glassdoor, an anonymous company feedback website, employees are able to share what they like, and really don’t like, about working for a company. This can make it very difficult, or even impossible, to recruit quality candidates if those reviews reflect a toxic company culture.
So what can growth companies that are expanding their teams and developing their identities do to avoid a toxic work culture?
Core values are a set of vital and timeless guiding principles for your company. They are not aspirational; rather, your core values should define your culture and who you truly are, both individually and collectively. They are the DNA of your best people. To quote the book “Traction: Get a Grip on Your Business” by Gino Wickman: “When your core values are clear, you’ll attract like-minded people to your organization.
You will also find that when they are applied in your organization, they will weed out the people that don’t fit. Once they’re defined, you must hire, fire, review, reward, and recognize people based on these core values.”
For example, one of our core values at Acceleration Partners is “Embrace Relationships.”
After reading this description, you can probably ascertain the degree of difficulty we had working with Company X. Its culture was in complete opposition to one of our core values (two, actually as you will see below). When the initial project was over, we ran as fast as we could.
Not having established core values can result in good people thinking that it’s inconsequential to behave in bad ways because the default culture is to emulate the bad behavior that is tolerated or modeled.
According to a recent study of nearly 20,000 employees around the world, conducted by Harvard Business Review and Tony Schwartz, no other leader behavior had a bigger impact on employees than being treated with respect. Cultivating a workplace culture that embraces respect includes:
“Own It” is another one of our core values. Here’s what it means to us:
Toxic cultures often don’t value accountability. Another Harvard Business Review study reported that 46 percent of high-level managers were rated poorly on the measure “holds people accountable, firm when they don’t deliver.” In the case of Company X managers, instead of holding their own people accountable, they chose to blame a vendor for the performance if their own team.
Not holding employees accountable, or yourself, for that matter, is a key ingredient for creating a toxic work environment. Holding people accountable does not mean micromanaging them, but it does mean setting fair expectations with them as to what’s needed, valuing accountability and results, and rewarding amenable behavior.
Consistently seeking feedback from everyone in the company is what will make it possible for you to flexibly adapt to market changes and be an industry leader. One tool that we use is an anonymous platform for employee feedback and suggestions called TINYpulse.
A particularly great feature is the “Cheers” section within TINYpulse. Cheers can be given to recognize the work peers are doing, to thank colleagues for their contributions, or to make co-workers feel valued and appreciated.
This quote by Doug Conant, former CEO and president of the Campbell Soup Company and founder of Conant Leadership, says it all.
I am sure it won’t surprise you that a few years later, a former leader of that company contacted me about working together a project at a new company, oblivious to our past experience. I also learned quickly that he had overstated the involvement of people in this new company that I knew well. Culture starts at the top and rolls downhill.
To make it in the long run, you will need to illuminate your vision for others, commit to your company’s values, show respect for yourself and those around you, and hold your team members accountable.
Robert Glazer is the founder and CEO of Acceleration Partners, an award-winning performance marketing agency ranked #4 on Glassdoor’s best places to work. Robert was also named to Glassdoor’s list of Top CEOs of Small and Medium Companies in the US, ranking #2.
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Why I’m Secretly Glad This Company Failed—And What Their Failure Can Teach Us About Culture
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