Written by Jason Montoya. Posted in Leadership.

If You're In A Worsening Toxic Business Situation, It's Time To Stop Tolerating Bad Behavior and Move On

This post is your reality check.

First, I'll explain a toxic business situation, what’s required to turn it around, and why it may be time to accept the inevitable that you already know.

Only you can decide to leave, but hopefully, this guide will give you some insight into how to understand and act.

snearing employees

Toxic Working Situations

How do you know the situation is toxic?

You probably know, but here are some clarifying insights to make it more obvious.

Leadership Team Dynamics: On the Way Down Versus On the Way Up

The following comes from Jim Collins’ book, How The Mighty Fall (affiliate link). This table provides a helpful picture of what a healthy growing (healthy) team looks like and what a dying (toxic) one looks like.

Teams on the Way Down	Teams on the Way Up
People shield those in power from grim facts, fearful of penalty and criticism for shining light on the harsh realities.	People bring forth unpleasant facts - "Come here, look, man, this is ugly" - to be discussed; leaders never criticize those who bring forth harsh realities.
People assert strong opinions without providing data, evidence, or a solid argument.	People bring data, evidence, logic, and solid arguments to the discussion.
The team leader has a very low questions-to-statements ratio, avoiding critical input and/or allowing sloppy reasoning and unsupported opinions.	The team leader employs a Socratic style, using a high questions-to-statements ratio, challenging people, and pushing for penetrating insight.
Team members acquiesce to a decision yet do not unify to make the decision successful, or worse, undermine the decision after the fact.	Team members unify behind a decision once made and work to make the decision succeed, even if they vigorously disagreed with the decision.
Team members seek as much credit as possible for themselves yet do not enjoy the confidence and admiration of their peers.	Each team member credits other people for success yet enjoys the confidence and admiration of his or her peers.
Team members argue to look smart or to improve their own interests rather than argue to find the best answers to support the overall cause.	Team members argue to look smart Team members argue and debate, not to improve their personal position, but to find the best answers to support the overall cause.

No team is perfect, but you should be able to quickly gauge if your team and organization fall more into the left column or right column.

And if this has been going on for years, without change, it’s likely not going to change because change usually requires buy-in from those in authority.

Toxic Leader Cultures

Ryan Gott Fredson provides additional insights on the matter. Ryan says the cultures that seem to foster more toxic leaders have the following characteristics (which are largely driven by the executive team):

They care more about “talent” than learning and development (strong fixed mindset).
They care more about results and outcomes than about culture (strong results-focused promotion mindset).
They care more about hitting short-term milestones than long-term milestones.
They have a strong fear of looking bad or failing.
There is a lot of competition in the culture.
There is little psychological safety.

Does any of that sound like the organization you are working with?

If either of these lists clarifies some things for you, you'll want to understand what's truly required to change it so you know how to do so or move on (because you don't need or want to).

This is the next step of your reality check.

What’s Truly Required to Rectify a Toxic Situation?

"Tolerating a problem has the same consequences as failing to identify it. Whether you tolerate it because you believe it cannot be solved, because you don't care enough to solve it, or because you can't muster enough of whatever it takes to solve it, if you don't have the will to succeed, then your situation is hopeless. You need to develop a fierce intolerance of badness of any kind, regardless of its severity." - Ray Dalio

If you're not sure you're ready to leave or you want to see if you can make a difference, here are a few things to consider.

If you're going to embark on a difficult adventure decide if this is the one to embark on. When I shut down my company, I had to reckon with the reality that rebooting the agency, was going to be hard and require a large amount of focus and energy. I decided to allocate that effort elsewhere instead.

So yeah leadership is tough, especially in tough situations. In toxic situations, good people usually leave or are ejected. Because of how hard it is, it’s not often that change happens from the inside without dramatic business losses.

The tactics I share below can help, but it does require a full commitment. Whether you want to go through that for the possibility of a turnaround comes down to a variety of factors. Sometimes it’s not worth it or not our place and we're better off leaving the situation.

So, here are two examples of how to resolve the toxic situation. Again, it's hard, requires a deeply grounded level of maturity, and will likely require leadership participation. These two examples, that leverage the same strategic approach.

This first example comes from Patrick Lencioni in an article titled, The Dilemma of the Difficult Employee. His advice comes down to this quote.

“What that manager needs to do is as foolproof as it is difficult: inform the difficult employee that he is being, well, difficult, and continue to remind him again and again and again until one of three good things happens.”

Persistent accountability is required. Lencioni goes on to describe that the employee either changes, quits, or doesn't leave and then you fire them. This redemptive approach provides clarity and opportunity.

There is a dramatically different power dynamic when we're the authority and dealing with a subordinate. The problem with toxic situations is usually a manager, senior leadership or the founder/CEO is the toxic one. There is also a much greater risk when the problem comes from above, But if you're going to leave anyway, what do you have to lose?

So here's another example with the power dynamic flipped. An adult child and her father. This comes from an interview with pastor Tim Keller, where he describes how this woman has a relationship with her emotionally abusive father.

“An adult woman who had a verbally abusive father, told me this. She said to her father, I'm going to call you every Tuesday night, because you're my dad. If you abuse me, I'm not going to tell you stop it or get angry, I'm going to hang up. And then I'm going to call you back next week because I'm not mad at you. I'm just trying to help you and its not right for you to do that. 3-4 weeks in a row, her dad did it and she hung up, and eventually, it changed him.”

There's no guarantee this persistent approach will work. And it could get you fired. But if you are committed to changing things and you have nothing to lose, it's one of the few options you have to make that change happen.

If this approach sounds scary, even with leadership support, I'll leave you with this inspirational and insightful Ted talk from Margaret Heffernan titled, Dare to Disagree.

Staying and trying to change things will be hard. Is this the hard thing you want to do, and if it doesn't work out, will you be content with the outcome?

People are valuable as we are and we should not tolerate being treated like trash. That means not tolerating toxic behavior against ourselves or people we’re responsible for and care about.

Sometimes we allow people to treat us badly because they have power over something we want or an insecurity. When we have something to lose, we become tolerant of being treated like trash (or allowing others to be treated poorly). So that brings us to our next topic.

Something To Lose: Discovering Our Motivations

Sometimes, we're staying in a toxic situation because we're getting something or anticipating a reward for staying. This could be as simple as unused paid time off or as deeply entrenched as business equity, both of which could be lost in a breakup.

Whatever it is, consider how you might cash out on any rewards you've earned. But, be honest and realistic. I've known people who stayed years longer than they wanted to cash out on paid time off and paid sabbaticals.

If you can't cash out your benefits or the cost is too high to do so, you need to accept and grieve what you are losing. If you're close to the end, you probably are already doing this but have not consciously recognized it. Suppose you've invested years of your life for a possible payout, equity, or the opportunity to lead the organization. In that case, it can be devastating to discover the reality is not what you expected or hoped for. False hope is a way for us to procrastinate our grief.

Acceptance and grief are the way forward. This will allow you to judge the situation and how best to move forward more effectively. Holding on at the end often leads to a messier break.

Several years ago, I had a client situation that unraveled and I tried to contain the fallout of it, which would have let me protect my paid engagement. I ended up making some poor decisions as a result and ended up losing the client anyway. Thankfully, it ended up being a good thing. I regret some of those poor decisions, but I made them because I held onto what I didn’t want to lose but was going to lose anyway.

What I have learned is that whatever we lose, God does have a way of restoring in other ways. Immediately, I got a new much healthier, and better-paying client.

Is It Time To Move On?

No normal amount of communication and accountability is likely to change a super toxic situation (or it would have changed already) where you have no authority.

It’s also not going to magically change on its own (change in this situation will probably ultimately require the approach I examined above and for authority figures to assert the change). So expect the descent into hell to continue and get worse. You could get drained by this black hole which means you’re being hindered from channeling that energy to healthy and receptive outlets that will appreciate your work.

One easy way to assess the situation on this front is to ask if you didn't work for this company and you knew everything you now know, would you choose to work with them?