Workplace politics and a toxic culture could be harming your business more than you think. In our recent report on the culture economy, we found that poor company culture is costing the UK economy a massive £23.6 billion per year.

If you’ve been operating purely with your focus on the bottom line, then chances are you’re also growing a toxic culture and that is the easiest way to lose your smartest and most capable people.

Now we live in a digital age with far greater transparency than ever before. As a result, businesses with a toxic culture are being exposed (Weinstein, Uber and many more). Consumers are choosing to buy with increasing integrity. Employees are choosing employers with corporate social responsibility programmes, and a company culture they fit into.

As a result, more and more SMEs in the UK are wising up to the idea that workplace culture is the key to competitive advantage and success. So, what is company culture, how do you know when it’s toxic and how can you change it for the better?

What is company culture?

Ask any business leader for a definition of what company culture is and they’ll all give you a different answer. The fact is, company culture doesn’t have an exact definition. It encompasses many aspects of a business. And a company’s culture can be good or bad for a great many different reasons.

Some say company culture refers to the mission statement of a business, along with the values and beliefs upheld by its founders. Others refer to company culture as a collective force made up from employees, interactions and the environment in which they work. Many refer to company culture as the DNA, the soul or the personality of the business.

We know that good company culture involves trust, respect, and the opportunity for employees to participate in shared values and love what they do. It’s something that develops organically from the top down. It isn’t something a business can buy in, though there are many means that can help, such as systems and consultants. Company culture is like an eco-system that needs to be nurtured in order to thrive.

Signs your company culture is toxic

In most cases, a toxic company culture evolves insidiously. It’s usually either because leadership is focused solely on results, because a culture wasn’t created in the first place, or because the culture already in place needs to mature. So, what are the signs your company culture is turning toxic?

1. Communication is non-existent

Poor communication in any business leads to a general feeling of nervousness and fear amongst employees. A lack of clear communication also accelerates gossip. Taboos against speaking up have a further negative influence.

2. Disrespectful or weak leadership

Incivility and bullying from the boss is a sure sign the company has a negative culture. This creates a fearful environment. Disrespect breeds disrespect. Bullying and a culture of blame doesn’t encourage accountability, respect or collaboration.

Even weak leadership can be the cause of a toxic company culture. With no sense of direction, enthusiasm across the board wanes. This leads to apathy and poor performance.

3. Discrimination

When employees get treated differently in terms of pay, opportunities and promotions, or are on the receiving end of discrimination, sexual harassment and unprofessional behaviour, you can be sure your company culture is toxic.

4. Inflexibility

A lack of trust by leadership leads to inflexible working practices. If employers lack empathy and offer no flexibility, employees stop caring as well.

5. Micro-management and zero praise

People are disempowered when they aren’t trusted to do their job. Micro-management kills the concept of opportunity because staff are too afraid to take risks, even though those risks could be advantageous or present mistakes that instigate a change for the better.

People at work need a certain level of autonomy. Employees need genuine praise. A disregard of feedback and ideas is another clear sign of a bad company culture.

A broken culture isn't good for anyone. A good company culture is good for business, employees and the community. And it's a powerful vehicle for social change.

Culture economy