Ruthless and abusive leaders are often defended on the grounds that they produce results. Yes, a few eggs get broken, but the omelet comes out great. Profile after profile of Steve Jobs, Charlie Ergen, and Harvey Weinstein note their tough personalities before breezily moving on to the good news: a growth in profits, a big uptick in new satellite TV subscribers, Academy Awards, et cetera. Despite these well-worn examples, there is growing evidence that mean isn’t effective and that unrelenting incivility in the workplace can have disastrous effects on a company.
It Hurts the Brand and Drives Away Customers
Most of us think twice about patronizing companies that treat their employees badly. University of Southern California marketing professors Debbie MacInnis and Valerie Folkes set up an experiment in which half the participants witnessed a supposed bank representative publicly reprimanding another for a minor infraction such as incorrectly presenting credit card information. Only twenty percent of those who’d seen the encounter said that they would use the bank’s services in the future, compared with eighty percent of those who hadn’t. And nearly two-thirds of those who’d seen the exchange said that they would feel anxious dealing with any employee of the bank. The results were not affected by the employee’s competence, whether the reprimand was public or private, or even whether the employee had done something questionable or illegal, such as park in a disabled spot.
Research also finds that abused employees often pay the ill will forward. In a poll of eight hundred managers and employees from seventeen industries, twenty-five percent of workers who’d been on the receiving end of incivility admitted to taking their frustration out on customers.
It Undermines Morale
There’s a growing body of empirical research that shows just how much tyrannical behavior can undermine morale. The poll mentioned above comes from a 2012 study in the Journal of Applied Psychology, which documented the full range of ways that incivility can undermine morale, and the results are striking. The poll showed these findings among workers who’d been on the receiving end of incivility:
- 48% intentionally decreased their work effort.
- 47% intentionally decreased the time spent at work.
- 38% intentionally decreased the quality of their work.
- 80% lost work time worrying about the incident.
- 63% lost work time avoiding the offender.
- 66% said that their performance declined.
- 78% said that their commitment to the organization declined.
- 12% said that they left their job because of the incivility.
It Sabotages Teamwork
Effective teams are crucial to successful organizations, but mean leaders tend to sabotage teamwork in a variety of ways: from creating a hostile environment to pitting employees against each other to turning a healthy competition into a toxic internal feud. Internal schisms can be extremely damaging to companies, and they’re more likely to emerge under a Machiavellian leader who takes a dog-eat-dog view of the world.
If employees feel as though they are in opposing camps, it’s very difficult for them to get any clarity about an organization’s overall mission or goals, which stymies successful strategic planning.
It Drives Away Talent
However unethical it is, a fast-food restaurant, retail store, or other commoditized service may be able to get away with an authoritarian workplace—with mean leadership—because these types of businesses don’t have to compete as hard for their employees. But it’s a different story in companies that need to recruit workers who are in high demand.
These days, Internet sites, like Glassdoor, that allow employees to dish dirt anonymously can provide a window into the company culture. Spend a few minutes on Zynga’s page, for example, and you won’t want to work there, particularly once you know that the founding CEO who is responsible for that culture is back in the saddle.
Toxic workplaces don’t just repel talent, they hemorrhage it, and this can be even more damaging to a company’s bottom line. If a top engineer or executive walks away at a crucial moment, a company can face big problems in terms of developing products and following through on initiatives. That’s all the more likely to happen in industries where the competition for talent is intense, and headhunters are constantly trying to get sought-after workers to jump ship for the promise of higher pay or a better work environment.
It Scares Away Investors and Partners
It’s not just employees who may steer clear of companies run by mean men but also investors, partners, and other players—the kind of powerful allies that enable companies to grow or can provide for a lucrative exit for the CEO.
These players understand that organizational culture is paramount in terms of future growth and profitability. They know how much it affects employee morale, which in turn affects creativity and productivity. If a company has a reputation for being a snake pit, potential investors or acquirers may decide to stay away.
It Blocks Innovation
Mean leaders can undermine or block innovation—crucial to all successful companies—in different ways.
First, their need for control can make it hard for those below them to take initiative. Mean men don’t build up and empower others; they tear them down and leave them feeling frustrated and impotent.
The drive for control can block innovation even more directly when a leader stops new projects that threaten their vision for the company or their status within it. Henry Ford infamously smashed the prototype of a new car that his people had developed when he was overseas and away from the company.
Abusive leadership can undermine creativity in other ways too. Steve Jobs is famous for being an innovator, but he was also famous at Apple for squelching new ideas. People think twice about freewheeling brainstorming when the reward is harsh ridiculing of their ideas.