From Toxic to Thriving: The Leader’s Guide to Healthy Organizations | Scott McCarthy | Episode 365

Scott McCarthy [00:00:01]:
Toxic organizations. There are definitely a lot of them out there. And yet there are also, I would argue, a lot where people think that they may have a toxic workplace. But the reality is maybe you don’t. Maybe it’s not nearly as bad as you think it is. So today we’re going to dive into five signs your organization is toxic and also the healthy anti science. Are you ready for this? Alright, let’s do it. Yes.

Scott McCarthy [00:01:32]:
Welcome one welcome all to the Peak Performance Leadership Podcast. It is your chief leadership officer, Scott McCarthy. And thanks for tuning in today’s episode, ladies and gentlemen, if you’re new to the show, welcome. Welcome for joining us here at this movement, at this podcast, this ecosystem, what have you. It’s great to have you here at the Peak Performance Leadership Podcast brought to you by Moving Forward Leadership, founded by myself, Scott McCarthy. And again, it’s so good to have you here. And before we dive into today’s episode, again, touching it with my own hands, my own copy of my own very real book. You don’t know shit about leadership and neither do I.

Scott McCarthy [00:02:19]:
It is on Amazon, it is on Google Play, it is on ibooks, it is basically everywhere. And, and I’m pushing to get it everywhere else where it’s not right now. And if you want your own copy, do it now. Go to lead don’tboss book.com buy and you can grab your copy, whether that is one from one of those sources I just mentioned or. Or if you want an autographed copy from myself directly to you, you can also order one of those on that website. Again, that is lead don’tboss book.com buy. All right, anyway, let’s dive into today’s topic that is toxic organizations. And I talk about them in the book.

Scott McCarthy [00:03:08]:
It’s actually near the beginning where I go into a couple different toxic organizations. Okay. And I wanted to hit on this. It just seems like a super relevant topic, especially right now as we come out of winter here in North America, especially Canada, and we get over the Christmas hump, the blue Monday hump, the winter blues, and, and the sky is slowly starting to open up more. The sun is starting to come out a bit more and things are just starting to, you know, feel a little bit better. And one of the things I find is a lot of organizations at this time of year. There’s a lot of issues around toxicity, burnout and all those types of problems. I just wanted to go after it today.

Scott McCarthy [00:03:58]:
I felt like, you know what, let’s talk about toxic organizations to help you identify whether or not you may have one or identify, hopefully the inverse, where you can go, hey, folks, you know what? We’re not toxic for the following reasons. Okay, so we got five signs in this list that will identify if your organization is toxic. And we’ll talk at near the end about how. How you have to still use your brain, okay? You just can’t simply go, well, here’s the list. Check, check, check. Yes, my organization’s toxic. It’s not necessarily that, you know, ones and zeros, binary per se. Okay, so first let’s talk about the five signs.

Scott McCarthy [00:04:48]:
The first one is people are leaving quietly. Okay? So if you’re noticing your top performers exiting you, your exit interviews being vague, your sick leave, like skyrocketing, and people avoiding sorry, hard conversations, that’s showing you that they’re voting with their feet, okay? That means they’re disengaged, they’re seeking other opportunities, they’re getting the heck out of dodge. That is definitely a sign that, you know, there could be an indicator that your organization is toxic. Now look at the anti side to that. Maybe people are actually advocating for your organization. Maybe people are bringing in friends and family to come work there. Come check it out. Alumni, people who formerly worked for your team are actually returning.

Scott McCarthy [00:05:51]:
And you’re seeing a desire for internal, internal mobility, which is outpacing and beating out external hiring. So people are looking, they want to go higher in the organization, they want to do more within it, vice going outside somewhere else. These are all great signs that your organization is actually healthy. So for you, the leader, your takeaway here is where you spend your time. Shows what matters. So spend it in on your interviews. Not just exits, but, you know, interview your team. Ask them what would tempt you to leave in the next six months and act on fixing that problem.

Scott McCarthy [00:06:36]:
Or you could even ask the inverse question, which is what I prefer. What’s keeping you around here? What is it that keeps you coming here every day? And double down on that. All right, so that is point one, sign. Two, gossip fills the gaps. All right? Rumors travel faster than facts. Blame and excuses replace accountability. And people say, you. You can’t say that here.

Scott McCarthy [00:07:10]:
Those are all signs that you may have some toxic traits in your organization. Now, the anti sign to that one is psychological safety and direct dialogue. So teams are using structured conversations to disagree. But professionally, and these issues surface early. And it’s in the meeting room, not necessarily in the hallway. So for you, the leader, you need to lead and not boss here. Lead, don’t boss. Set the rule.

Scott McCarthy [00:07:49]:
Know about Them without them, okay? Don’t talk about other people without them. Present. Redirect hallway chatter into facility. FAC facilitated conversation within 24 hours. Go and actually seek to have conversations around the tables that are appropriate and solve the problems. This is how you can get after this type of issue. If you see it, okay? That is sign number two. Sign number three, burnout is the norm, okay? And keep that in mind, the norm.

Scott McCarthy [00:08:34]:
Long hours are expected, anxiety is high, Emotional outbursts, passive aggressive notes, presenteeism issues, minimum recovery. All those classic sides of burnout, if that is the norm, is that’s how you operate within your organization. Now you might be a toxic organization, okay? But the anti sign to that is this sustainable pace but visible recovery. You know, you may have periods where it’s high peak and then you ratchet back down, you peak up high and then you go back down. That is normal. You give visible recovery periods. You set clear priorities, you make the workload sane and you give public permission to rest. You know, you value mental health, you value sick time.

Scott McCarthy [00:09:34]:
You protect your leaders, your, your team. You protect them and enable them to basically set boundaries, celebrate the outcomes and not necessarily just focus on the hours, right? So that’s what you as a leader you need to do. So just keep the takeaway for you here is that discipline beats motivation every time, day in, day out. Create that stop list. Find things that you need to kill, kill the low value. Work every week, protect one meeting, free block for the team every week and, and enable them to feel that pressure, just release, okay? And that’s what you want to try to do. So that is sign number three. Sign number four, ideas get shut down.

Scott McCarthy [00:10:34]:
All right, so toxic organizations kind of similar to the previous one. All right, Suggestions get dismissed. Micromanagement is rampant. You know, that’s not how we do things done for when people are trying to make things better. Okay, not necessarily if they’re doing something wrong. There’s a way to use that saying in being accountable. But I mean basically people are saying we don’t do things like that here because they don’t want to change. And then finally people stop speaking up.

Scott McCarthy [00:11:10]:
These are all signs of ideas being shut down, which can lead to a toxic environment for your team. Now the anti signs, so the things you want to look for to show that you’re actually not a toxic organization is empowerment experiments. Teams are trusted to go ahead and try things out. Small tests are easy to run. Wins and misses are shared without shame. You learn from them, learn from the misses, implement the wins and the Way you go, effort and learning are acknowledged, not just perfect outcomes. You know, you identify the things that we did well, we fix on the things that we didn’t do so well, but we don’t necessarily worry about the perfect outcome. So for you, the leader, it’s important for you to realize that there are no cookie cutter solutions.

Scott McCarthy [00:12:06]:
You want to enforce a 10% rule for improvement experiments and every team runs one test per quarter and shares results. Try it out. And what you’re doing here is you’re enabling that innovation, you’re enabling psychological safety and you’re enabling communication within your team. And then the final one, which is definitely a clear indicator and you hear this all the time, favorites win, values lose. So if favoritism is rampant, if inconsistent standards are applied and workarounds for quote unquote untouchables, your ethics end up bending under pressure. And I talk about that in my book huge. You don’t know shit about leadership and neither do I. Okay, so what do you want to do? Or what do you want to look for? Because those are all toxic signs.

Scott McCarthy [00:13:11]:
Some anti signs which show that you’re not necessarily toxic is that you have values based accountability. No one is above the rules. No one, not even you. If you’re the top leader of the organization, you, you’re not above the rules. Standards apply to everyone, especially at the top. And recognition is tied to values in action, not politics. So for you, the leader, here are some things that you want to take away and that is leadership is about leaving a legacy, not just hitting targets. You want to publish three non negotiable behaviors and, and consequences for breaching them and follow through.

Scott McCarthy [00:13:55]:
You say, you know, this action will result in immediate termination and someone does it, you best follow up with immediate termination, full stop. Doesn’t matter if it’s your top performer, full stop. You have to follow up with what you said it. Okay, now let’s. We talked about the five different signs and their anti signs, but let’s not look at this binary, right? As I said earlier. So let’s go back to number one. You know, people are leaving quietly. You have to look at, you know, why are they leaving? This is why exit interviews are so important.

Scott McCarthy [00:14:41]:
I went through a period where I had a bunch of people leave, but when you looked at them in isolation, they all had valid reasons why they were leaving. And actually maybe you think for a bit like oh my God, are we toxic? But suddenly a bunch of people were leaving. But one had an opportunity elsewhere. Someone had a different opportunity that fit their Lifestyle better. Someone else decided it was time for them to retire. And it kept going on and on and on and it was just like, okay. When I looked at them all in isolation, the reasons and rationale made sense. It was just a big sandwich to eat right there because there was a number of people leaving at the same time.

Scott McCarthy [00:15:22]:
But it made me question, okay, whether or not gossip, you have to realize that yes, eliminate it the best you can. But the reality is people love to talk and some people will just talk about people no matter what. So I’m not saying don’t bother to try to eliminate it. However, manage your expectations of how well you are going to be successful with this. Certain demographics will go down this line much more than others. It is just a fact of life. And that’s all you can do is do what you can. Okay, burnout, again, I kind of hinted at this as I was talking about it, but, but you know, each your, your, your, your business or your organization, it has a cycle, There are peaks and valleys and burnout will be more prevalent through that cycle.

Scott McCarthy [00:16:20]:
And that cycle will get overlapped with the life cycle, as in, you know, the different periods of the year and when stress is up, naturally. When stress is lower naturally. So again, look at that. Ideas getting shut down. Sometimes people believe that’s to be true, but when it’s not actually true, and sometimes it’s a communication issue. So sometimes, you know, you actually listen to the people’s ideas, but you don’t necessarily take action on them because maybe it’s not the best idea or maybe there are reasons why you can’t actually follow up with that idea. That’s okay, but it becomes a communication issue when people don’t get the feedback of the reasons why you can’t actually implement that idea. So maybe look at that instead and then favoritism, you know, sometimes it’s a perception issue and again, it goes back to kind of gossip being linked in that people will fill voids they don’t know.

Scott McCarthy [00:17:23]:
And I’ll tell you, depending on the size of your organization, you may not be able to simply explain every single decision that you make. And that is totally okay, nor do I expect you. But as long as you hold true to your values, you will win this in the end. So if people think someone’s being favored, but the reality is they’re doing certain things because of their role, they’re, they’re getting opportunities because of their role, not because they’re favorite or not, it’s just due to their role. Explain that hold through to the values so that when those other opportunities arise, you know, someone else gets the opportunity it is. Now, if you look at this and the final thing, what I’ll say to you about toxic organizations and these five signs is, okay, so you looked at them all and you go, okay, here you’re saying, however, I’m certain I have two of these. Does that mean you’re a toxic organization? No, it doesn’t. It means you just have some work to do on those two areas.

Scott McCarthy [00:18:31]:
Guess what? No organization is perfect. It’s normal. So you work on those two areas. If you have three where you go, clearly these are issues for us, okay, you might be getting toxic now, but again, that doesn’t mean you absolutely are 100% toxic. I would say if you get four or more of these where you go, okay, definitely have these issues here, then you need to work on your organization big time. And there’s definitely toxicity going through. And sometimes it’s not necessarily the organization, but it could be certain people and it could be not necessarily a matter of people doing it on purpose, but for. But rather they just don’t know any better.

Scott McCarthy [00:19:18]:
So the final thing in the show is how do you go about fixing it? It is identifying the areas of improvement and then setting the standard and modeling that standard out of the gate immediately. So, for example, if you notice there is actual gossiping going on about people, don’t be in the hallways talking to others. You know, tell your leadership team, tell your organization, we don’t do that here. And then don’t do it ever yourself. And when you witness it occurring, interrupt and say, folks, it appears like we are gossiping here. We don’t do that. We do not do that. So that’s not how we do things.

Scott McCarthy [00:20:10]:
If you don’t have them here, we don’t talk about them. You have to nail these things down as quick as possible. You may have to come across a little bit authoritarian again and go back to leadership style spectrum. You have to balance over there, but at the end of the day, you will achieve success. So that’s. Ladies and gentlemen, that is it. Again, those five signs with their anti signs, okay, people are leaving quietly. Is the toxic sign.

Scott McCarthy [00:20:43]:
The anti sign being advocacy and referrals gossip in the gaps. All right, that’s the toxic sign with the anti sign being psychological safety and direct dialogue. Now, number three is burnout is the norm, but the anti sign is sustainable pace but visible recovery. Number four ideas get shut down, anti sign empowerment and experiments. And then finally, five favorites wins, values lose. Anti sign values based economy. If this hit a note with you, I’d love to hear it. Reach out to me on LinkedIn, on email, drop a line wherever you see me over social and as always, lead dump boss.

Scott McCarthy [00:21:31]:
Take care now.