Companies that were swallowed alive by toxic culture

Corporate failures usually do not start in boardrooms. They are deeply rooted in the company’s culture and what the company values.

And it’s much more than that Ping Pong table kept in the cafeteria, or a library where your employees can spend some time reconfiguring themselves.

While these may be a sub-set of your company culture, they’re by no means all it takes.

And this is where culture gets intriguing in organizations.

Uber, the American ride-hailing giant (among loads of other services) once admitted, “Our workplace culture and forward-leaning approach created significant operational and cultural challenges that have in the past harmed, and may in the future continue to harm, our business results and financial condition. A failure to rehabilitate our brand and reputation will cause our business to suffer.”

Additionally, Kalanick’s motto, “always be hustling”—didn’t help the growing workplace toxicity.

So, what was wrong with Uber’s culture?%

Uber has been a classic example of “Culture flows top-down”. It’s former CEO Travis Kalanick was often criticized for his remarks and his behavior towards his employees. He was once famously caught on film yelling at one of his company’s drivers. One other Director was heard denigrating and making homophobic slurs on a subordinate during a heated argument. While some instances were pointing towards sexual harassment cases brought to light by one of its female employees back in 2017, some other similar allegations were being made by Uber customers on their drivers at different times.

The #DeleteUber campaign that took the entire social media by storm in January 2017 prompted hundreds of thousands of consumers to stop using their platform within days.

Uber has had to face tremendous flack because of its negative culture both in the media and internally – not being able to hold on to the much-needed talent at times. When Bozoma Saint John quit Uber as Chief Brand Officer just a year after she was hired, she released a statement saying “Uber still had more work to do on its company culture.”

Another thriving company that had to give in to the culture of failure was IBM. Heralded as probably one of the smartest companies of the world, and with 2 Nobel Prize (Physics) winners in their team of researchers, IBM took pride in calling their culture as one of innovation. But there are times when glaring cultural slips are noticeable only to those on the outside. The ‘invulnerable’ company soon fell prey to stifling middle-level bureaucracy and red-tapism. The leadership was completely unaware, and competitors soon took their market share away; and by the early 1990s, IBM was wobbling at the edge of bankruptcy. It took the then Chairman, Lou Gerstner 5 years to turn the company around.

America’s Delta Airlines encountered a similar fate when its leaders decided to gash corporate training budgets and employee perks in their ‘crusade’ to introduce cost-effective measures. In just three years, Delta filed for bankruptcy from being one of the nation’s most loved airlines. It took the new leadership years to rebuild the culture that Delta was once synonymous with, but it never regained its past glory.

However, it would be naïve to believe that seeds of cultural failures only stem internally. Sometimes, a nation’s culture can also dictate the culture of its organizations -and the outcomes could be devastating.

By the end of the 1990s, Korean Air had more plane crashes than almost any other airline in the world. And the reasons were NOT old planes or badly trained pilots.

In more than one instance, it was found that Korea’s inherent culture of deference contributed to these crashes. It was found that junior officers’ apparent timidity to voice their concerns to the captain at the face of disaster was the primary reason for a crash in 1999. “Authoritarian culture in the cockpit,” remarked CNN after the Korean Air crash in Guam in 1997. Korea’s hierarchical culture of reluctance to point out a superior’s mistakes also gave way to a certain preference to retired military fliers over civilian pilots, which also in turn manifested in a lack of civilian-military cooperation in the cockpit.

There are tons of examples of poor culture ultimately bringing down corporations and it can very well be held up as a sort of high water mark when it comes to the impact toxic culture has on organizations.

So, next time when you see disengagement between employees, lack of teamwork, creativity, and innovation, or where a select few carry the burden of many – know that it’s time to rebuild your culture.

Hindsight is a beautiful thing, and although corporate culture may be clearer with the benefit of time, it may not always be the wisest thing to do. Culture is something you are. It’s something you do every day.

How would you call your company’s culture – Elite or Toxic?

Leave your comments.

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