Bad company: fixing a toxic company culture

Your company culture has a major impact on the health of your company.

When your company culture is toxic, it will be difficult for your team to show up to do their best work.

By Sonia Thompson

In June this year, Netflix let go of its communications chief for “his descriptive use of the N-word on at least two occasions at work”, according to an internal memo sent by CEO Reed Hastings. The former employee had been with the company more than six years.

It reminded me of the drama surrounding the revival and subsequent axing of Roseanne – the show ABC cancelled after Roseanne Barr made a “racist joke” on Twitter about former presidential adviser Valerie Jarrett. Last year, investors asked Uber’s co-founder and CEO Travis Kalanick to step down after a series of scandals and reports of a toxic company culture. 

Your company culture has a major impact on the health of your company. Because business is about belonging, when your company culture is toxic and unhealthy, it will be difficult for your employees to do their best work individually, operate as a high-performing team, or deliver remarkable experiences to your customers. 

The forceful actions taken by Netflix, Disney (ABC’s parent company), and eventually Uber to sever relationships with key people within their companies demonstrates not only that company culture is important enough to be prioritised and protected, but that it also heavily influenced by people in top positions. 

"If you don't deal with the core beliefs of people at the top it's just going to trickle down." Sam Murray, OneDigital

Sam Murray is the managing director at OneDigital, an employee benefits company. She has spent years counselling, coaching, and training executives, particularly after they have behaved badly. She told me what she’s observed about how leadership behaviour impacts company culture: “If you don’t deal with the core beliefs of the people at the top, it’s just going to trickle down... [these companies] had policies, they trained people, but the people at the top are the ones that are the most guilty of that behaviour and people see that.

Employees recognise inauthentic behaviour, and so then pretty soon nobody’s behaving correctly, even though the policy is written. Everybody signs their documents that they are trained, but once you allow it at the highest level it eventually becomes a virus in the company.” 

To build and nurture a company culture that is healthy and serves as a source of competitive advantage, make sure your leadership leads by example. 

Here are three high-level steps to do it: 

1. Declare your mission, vision and values.

The memo Hastings sent explained that he fired the communications chief because his behaviour “showed unacceptably low racial awareness and sensitivity and is not in line with our values as a company.” 

To get your employees to embody the values of your company, be deliberate about declaring those values and making sure everyone on your team knows what they are and what they look like in practice. Document your values. Communicate them to everyone on the team often. Then, consistently celebrate team members who embody those values, so all are aware of what good looks like. 

Professional Development: Being a positive leader: learn how to motivate, communicate and navigate changes when they occur in the professional environment.

2. Seize teachable moments.

We’re all human. As such, there will be plenty of times when we make mistakes. But with the right mindset, mistakes are really just opportunities for us to learn. As a leader, those learnings should translate into teachable moments that help everyone in your company grow. 

Let’s go back to the Hastings memo, wherein the Netflix chief admits he missed a teachable moment after the communication chief’s first use of the N-word: “As I reflect on this, at this first incident, I should have done more to use it as a learning moment for everyone at Netflix about how painful and ugly that word is, and that it should not be used. 

"I realise that my privilege has made me intellectualise or otherwise minimise race issues like this. I need to set a better example by learning and listening more so I can be the leader we need.” 

3. Don't tolerate behaviour that violates your values.

Once your team is clear on your values, and you’ve corrected behaviour that isn’t aligned with those values, you’ve got to take action to preserve them. As in the case of the companies previously mentioned, that may mean separating employees from the company. 

Early in my corporate career, a senior leader apologised to me after a company leader in another division had made racially insensitive comments. Nothing happened to the offender. Because no action was taken, I didn’t feel like I belonged at the company. 

I was in a much junior position than the person who’d made the inappropriate comments, and remember feeling like the company wasn’t really serious about stamping out bad behaviour if it came from someone with an “important enough role”. Eventually, I left the company. 

Work to create a safe space within your company, so everyone on the team feels valued and like they belong. That may mean having difficult conversations or making tough decisions. But protecting and nurturing a thriving culture is worth it.

This article was originally published on

Read next: 5 myths about corporate business culture

Like what you're reading? Enter your email to receive the INTHEBLACK e-newsletter.
October 2018
October 2018

Read the October issue

Each month we select the must-reads from the current issue of INTHEBLACK. Read more now.