How a Bad Company Culture Impacts Business Results

Bad Company Culture Definition
We define company culture as the way things actually get done in an organization.  Workplace culture reflects the way employees think, behave, and work.  Culture includes the known and unspoken values and assumptions that drive good and bad practices and behaviors.

Good or Bad Company Culture Definition
Cultures can be either good or bad for your workforce and aligned or unaligned with your strategy.  A healthy culture is characterized by positive employee engagement, high performance and leaders who live their values and hold employees accountable for doing the same.  A bad company culture definition is just the opposite.

Positive cultures can help companies perform at a high level (i.e. Southwest Airlines or Patagonia); bad cultures can hurt performance (i.e. The Department of Veterans Affairs, Wells Fargo and VW).

A Bad Company Culture
When a company culture goes bad it may be marked by political infighting, interpersonal conflict, discriminatory practices, and subpar performance.  But there can be an impact beyond a company’s bottom line and its employees.  When there is no “true north” or accountability for acting in a fair, open and ethical way, a bad company culture can promote unethical behavior that negatively affects not only the workforce but also a company’s customers.

An Example of a Bad Company Culture
As long ago as the 1970s, 3M knew their non-stick Teflon pans posed proven health dangers to humans ranging from an increased risk of cancer to a greater likelihood of heart attacks.  3M continued to produce the harmful compounds which were discovered in the 1990s to be everywhere in the food chain, from fish to humans.

How could a company act in such an unethical, unconscionable way over the years?  Because their toxic workplace culture allowed it.

3M – The Impact of a Negative Company Culture
Employees can become infected by a company’s negative culture.  Just as employees can be buoyed by a positive work environment, they can be sickened by unethical leadership.  Bad company cultures teach leaders and employees not to ask questions and encourage everyone to look the other way and disregard their own ethics when they check in at work.

Finally in 2014 the responsible chemical components were banned in the U.S. as a result of litigation and Environment Protection Agency investigations launched by an alarmed attorney.  But it took four decades.

Have you assessed your corporate culture lately?  What are you allowing to fester in your organization?

The Bottom Line
Don’t underestimate the power of organizational culture on the success or failure of your business.  How and why work gets done can be a powerful force for good or bad.  Make sure that the workplace culture that you are fostering protects openness, truth and cooperation and not cover-ups in the pursuit of greed.

To learn more about how to align your company’s culture with your strategy and your values, download The 3 Levels of a High Performance Culture to Get Right