Is Your Company Toxic? Here are Five Red Flags

Is Your Company Toxic? Here are Five Red Flags

When we set out to own a company, we all imagine this happy beehive of successful employees and immeasurable growth. Yes, maybe that image is a little different for everyone, but one thing we don’t set out to do is create a toxic company. The problem is, so many businesses are toxic, and don’t realize it. You may have a notion when you notice your turnover rate is much higher than you’re comfortable with, or maybe you and your employees don’t have a great relationship, or maybe you see that your company doesn’t really grow unless you are firmly a part of a step in the process.

We mentioned turnover rate, and this is hugely important as an identifier of a toxic company. Happy people don’t leave, so if you’re looking for a place to start, this would be it. Other toxic red flags may not be as noticeable. How would you know?

1.    Nepotism

You may not realize it, but look at who you hire. Are most of your hires related to you in some form? Friends, family, fraternity brothers or sorority sisters? Did you hire them because they were familiar, or did you hire them because they were the best persons for the job? And what a coincidence if they were. Likely, your nepotism (or cronyism) has created a culture that is exclusive to anyone that works for you outside of this familiar network. Seek out diverse perspectives, higher people you don’t know, and encourage inclusivity between those you do and those you don’t.

2.    Communication (or lack thereof)

Do you feel like your employees are always giving you good news? Do they EVER say anything bad about you or the company or anything at all? If they don’t, this is a red flag. Your people should feel comfortable enough around you to tell you how they feel and when they don’t, this is an indicator that they don’t feel seen, heard, and chances are they are complaining amongst themselves and not to the people that can make the changes.

3.    Role Confusion

Do your employees know what everyone does? If there is confusion or uncertainty about boundaries, this can lead to chaos. Create a space where structure is clear and each person’s roles are defined clearly. The whole management team including the owner need to be defined by responsibilities, their roles, where they come in during processes, and what their role is in certain policies.

4.    Disengagement

When your team starts checking out, you know you have a definitive red flag. People who care are engaged. They communicate, they finish their jobs, and those that are the happiest will even make suggestions or talk to you about things that are outside of what you pay them for. Happy people will always go out of their way, and you should do the same for them. Your clients will feel disengagement, and if they don’t feel the love from your team, they won’t last long with your company.

5.    Lack of Confidence

Gossip can be a silent killer in a company. If your team is gossiping amongst themselves, and not being open and honest with leadership, this shows there is a lack of confidence in their leadership, their roles, and/or in the company as a whole. Leaders should address where the underlying problem is, and how to create a safe environment where everyone’s voice is heard.

The success of your company’s growth is entirely hinged on the environment you have created internally. It doesn’t matter how many clients you have if you can’t create an ecosystem where your team wants to be a part of that growth. Do an internal audit and find out if your company is toxic, or on it’s way to being a toxic environment. You’ll be amazed at how much a difference a safe work environment can make.  

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