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From Toxic to Thriving: How Leadership Development Can Change Workplace Culture

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What is a Toxic Workplace Culture? · Factors Leading to Toxicity · The Leadership Role in Influencing Workplace Culture · The Wins from a Transformed Workplace Culture · Transforming a Toxic Workplace Culture · Conclusion

The Great Resignation, which swept the workplace over the last few years, has commonly been attributed to inadequate compensation. However, a breakthrough report from the MIT Sloan Management Review brings forth a very different perspective. According to the report, the low pay was not the primary reason for employees leaving. Instead, the toxic culture at the workplace was the chief culprit. Surprisingly, the report indicates that workers are 10.4 times more likely to quit a job because of a toxic environment than because of inadequate compensation.

A workplace becomes toxic when employees do not feel respected and unethical conduct is widespread. It often reflects a dearth of diversity, equity, and inclusion. These elements converge to create an unwelcoming atmosphere, significantly impacting the mental and emotional health of employees and a company’s overall effectiveness and growth.

Although the significance of employee well-being to organizational success is widely acknowledged, the willingness to tackle this issue remains worryingly low. As companies confronted the third year of the global pandemic in 2022, work-related stress levels soared, leading to a notable decrease in employee motivation and energy.

The concerning trend highlights the pressing necessity to address the problem of toxic work environments and shift towards cultivating a positive workplace culture that promotes thriving. It can be achieved through effective leadership development and other initiatives that foster diversity, equity, and inclusion and prioritize employee well-being.

What is a Toxic Workplace Culture?

The fundamental traits of a toxic workplace culture remain consistent across different industries despite its complexity. It is marked by an atmosphere where negativity, conflict, and unethical conduct are frequent, resulting in a lack of respect and inclusivity. Employees working in such an environment may find themselves in hostile and potentially abusive relationships with their colleagues. Consequently, they may experience discomfort and tension, leading to disengagement or quitting the organization altogether, even if they were previously committed to their job and the organization.

Factors Leading to Toxicity

Toxic workplace culture can develop slowly over time and can stem from various factors. Initially, it can begin with incidents of harassment or microaggressions that are not addressed effectively, leading to a culture where such behaviors become normalized. Unequal treatment of employees and inappropriate behavior by management can also contribute to a growing sense of disrespect and dissatisfaction among the workforce. A study conducted by MIT Sloan Management Review identified five key attributes that significantly impact employees’ perception of their workplace culture: disrespect, non-inclusion, unethical behavior, cutthroat competition, and abusive conduct.

The Leadership Role in Influencing Workplace Culture

According to research by Deloitte, the significance of a distinct corporate culture to the success of a business is widely recognized by executives and employees. The study found that 94% of executives and 88% of employees believe leadership is crucial in shaping workplace culture.

A fundamental step for leaders is establishing clear organizational core values, but the values must go beyond being etched on paper. Leaders must ensure they are effectively communicated to employees. To make these values a reality, they must be regularly discussed, exemplified in actions, and foster a sense of personal responsibility among the workforces.

Leaders should actively promote inclusivity as a core value in the workplace. A genuinely inclusive environment values and nurtures all employees, providing equal opportunities and access to perks and rewards. To champion inclusivity, leaders can engage in transparent communication and demonstrate visual affirmations that advocate diversity and equality, such as displaying signage promoting these values throughout the workplace.

To foster a thriving culture, leaders must prioritize employee engagement and motivation. It can be achieved by implementing equal treatment, clear goal-setting, and transparent progression policies. When employees have clarity on their performance indicators and see a fair path to advancement, it fosters a sense of motivation and reduces the potential for resentment. Leaders should also recognize and reward employee efforts, providing regular feedback and celebrating successes. It helps build a positive work environment and encourages employee commitment.

In essence, the power and responsibility to transform a workplace culture from toxic to thriving sit squarely on the shoulders of the Leadership team, with effective communication, demonstrated values, inclusivity, and employee engagement being the key tools in their arsenal.

toxic workplace culture

The Wins from a Transformed Workplace Culture

Transitioning from a toxic to a thriving workplace culture can create a virtuous cycle of positivity, productivity, and performance.

Research suggests that positive social connections at work can significantly impact employee well-being and productivity. A recent study found that employees in supportive work environments were 70% less likely to fall ill and displayed better cognitive performance. They also recovered more quickly from health issues, leading to improved productivity. Therefore, creating a positive workplace culture that values social connections can significantly impact both employees’ personal lives and the overall success of a business.

In addition, a leader’s behavior and actions particularly impact the overall mood of the workplace. When leaders display empathy and kindness, their employees respond positively. A brain imaging study has shown that recalling an empathetic boss activates areas of the brain associated with positive emotions. It reinforces the importance of leaders displaying kindness and empathy towards their employees, which can lead to a more positive and productive workplace culture.

A positive workplace culture increases job satisfaction and reduces turnover rates. Happy and fulfilled employees are more likely to stay with their current employer and recommend the organization to others. It can save the company substantial recruitment and training costs while building a strong employer brand. Moreover, a culture of trust and cooperation can lead to improved teamwork, innovation, and productivity, ultimately benefiting the bottom line.

Creating a workplace environment that fosters psychological safety and inclusivity enables employees to speak up, experiment, and ask for help without fear of negative consequences. Such an environment, coupled with employee empowerment and adequate training, can lead to superior performance outcomes, enhancing overall business performance.

Transforming a Toxic Workplace Culture

Transforming a toxic workplace culture into a thriving one creates a positive feedback loop where increased productivity, improved morale, and enhanced business performance reinforce each other, driving the organization toward sustainable success.

Effective leadership is crucial in this journey toward a thriving workplace culture, and executive coaching can be a valuable investment to equip leaders with the skills necessary to foster positivity, inclusivity, and productivity. However, choosing the right coaching firm is vital, as a poor choice could inadvertently hinder performance. Therefore, careful selection of an executive coaching consultancy is essential for translating leadership development into organizational transformation.


The challenge of toxic workplace culture is not just limited to a few industries or large corporations; it affects all sectors and can exist even in successful organizations. It can manifest in small, unnoticed pockets within a company’s culture, and leaders must be vigilant in identifying and addressing them. It requires proactive efforts to root out toxicity.

The challenge is significant, but with recognition and nurturing effective leadership, organizations undertake the transformational journey to a thriving culture that fosters employee well-being and drives business performance. It is not merely a strategic imperative but a moral one to ensure that every employee can contribute in a respectful, valued environment.

Author Bio:

Ratish Pandey is a Gold Level Business Coach from ActionCOACH, USA, and a Certified Executive Coach.

The Founder of Ethique Advisory, Pandey works with SMEs/MSMEs to address business challenges such as growth, productivity, and personal goals.

He was recently recognized by Entrepreneur India as the Acharya / Business Mentor of the Year 2022.

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