Normally, when organisations are formed either locally or internationally, the common driving force behind their formation is profit making or how they can create an impact on a society. And when they start experiencing challenges of poor performance, the common focus to solve the challenge is to focus on how they can get additional finance to save the situation.
But this was recently debunked when we hosted a group of executives on a leadership programme at Strathmore University Business School. During that session, we were struck by the sheer volume of concerns raised regarding the difficulties they normally experience working with their leaders. We narrowed down the various concerns to the common challenge of toxic leaders in organisations.
The participants gave numerous examples of the leaders they encountered daily. These included: leaders who do not encourage alternative voices; leaders who fail to listen, creating a stifling environment; leaders who take credit for subordinates’ work, leaders who criticise without offering constructive feedback, leaders who dismiss or ignore ideas and leaders who show blatant favouritism for their friends and boot lickers.
This feedback highlights the pervasive challenge of toxic leadership in many organisations and the need to understand this unfortunate leadership phenomenon. Toxic leadership has attracted many to research on it as its existence has undisputable negative consequences.
In a journal article by Chamorro-Premuzic published by the Harvard Business Review in 2016, Chamorro wrote that toxic leadership is normally characterised by behaviours that undermines the team morale, stifle innovation, and hinders productivity. According to him, leaders that exhibit toxic traits often prioritise their own needs over those of their team members, leading to a range of negative outcomes.
This has been affirmed by a recent research article published in the Creighton Journal of Interdisciplinary Leadership under title: ‘A descriptive literature review of harmful leadership styles: Definitions, commonalities, measurements, negative impacts, and ways to improve these harmful leadership styles’ , where they explained that toxic leaders normally create an unfriendly work environment where employees feel undervalued and disengaged, which in turn affects their performance and overall job satisfaction .
The presence of systemic toxic leadership within an organisation erodes the fundamentals of organisational cohesion, leading to a deterioration of the collective workplace environment and consequently negatively affects performance in our organisations. Some of the consequences of working in environments where the leadership is toxic include, decreased motivation and engagement.
When leaders do not encourage alternative voices, employees feel that their contributions are not valued, and this eventually leads to demotivation and a significant decline in engagement. A Gallup study found that disengaged employees are less productive, more likely to leave the company, and can negatively influence their coworkers.
Toxic leadership also leads to increased turnover. When leaders fail to recognise and reward contributions fairly, or when they consistently take credit for their team’s work, employees are likely to seek employment elsewhere.
The Society for Human Resource Management (SHRM) estimates that replacing an employee can cost a company up to 200 percent of the employee’s annual salary.
The big downside of toxic leadership is its detrimental impact on mental health. The American Psychological Association highlights that workplace stress, often exacerbated by poor leadership, is a major contributor to mental health problems. Constant criticism without constructive feedback and dismissal of ideas can contribute to stress, anxiety, and other mental health issues among employees. A toxic work environment stifles creativity and innovation.
Stressed out and harassed employees are less likely to contribute innovative ideas, and this can hinder the organisation’s ability to stay competitive in a rapidly changing market.
From the clear negative impacts of toxic leadership, there is an urgent need to equip organisations in the ways they can eliminate toxic leadership issues to promote a healthy and productive work environment. Eliminating toxic leadership has clearly defined benefits such as enhanced employee engagement and staff retention. Studies have shown that engaged employees are 17 percent more productive and experience 41 percent lower absenteeism.
Alongside improved engagement, there is likely to be improved team performance, effective collaboration, and overall profitability. Research by McKinsey & Company indicates that companies with ethical transformative leadership are 25 percent more likely to achieve above-average profitability. Innovation is another by product of positive nontoxic leadership.
By creating a psychologically safe environment, employees feel comfortable sharing their ideas and an innovation culture develops. Encouraging diverse perspectives and valuing creative contributions can lead to breakthrough innovations that drive the organisation forward.
Within a healthier workplace where employees feel supported and valued, employees experience less stress and anxiety, leading to improved overall well-being and higher job satisfaction. Deloitte & Touche organisation explains that an organisation that prioritise mental health can easily experience a positive return of $4 for every dollar spent on mental health initiatives due to increased productivity and reduced absenteeism.
Since much evidence is clearly showing how toxic leadership has far-reaching negative consequences, leaders in organizations need to develop an honest self-awareness of their leadership style and eliminate any tendencies that contribute to toxic leadership. By eliminating the said tendencies, they will transform their work environments into thriving, productive, and innovative spaces which contribute to a thriving nation.
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