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The 5 attributes of a toxic work culture, according to a Wharton organizational psychologist

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Wharton Organization Psychologist Adam Grant joins Yahoo Finance Live to discuss the upside to a hybrid work environment, toxic work culture in the U.S., normalizing mental health, recession fears, and the outlook for employers.

Video Transcript

[MUSIC PLAYING]

- Companies are still feeling the fallout of the COVID-19 pandemic with a lineup of challenges now including a potential recession. But one headwind not in the headlines is a toxic work culture. I spoke with Adam Grant, organizational psychologist and author of "Think Again. He was able to shed light on this work culture. Take a listen.

- I don't think we should eliminate offices altogether, but I think the evidence is really clear that as long as people show up half the week, they can work from anywhere the other half and they're more productive, more satisfied, more likely to stay. There are no known costs to collaboration or relationships. So I don't know why we're so eager to have everybody on site all the time, but I think it's something we need to rethink.

- So hybrid's the future?

- I think hybrid is the present actually also. There are a lot of companies that committed to return to office and then doubled back and said, wait a minute, this is not working for us. Let's agree on a two or three day plan.

- "Toxic," that's a strong word. What is making the environment toxic right now?

- So there's a great study that Donald Sell just finished with his colleagues where he looked at five attributes of toxic culture and they break down to disrespect, exclusion, abuse, selfish and unethical behavior, and some kind of cutthroat or lack of inclusion tendency. And I think that fundamentally, this is not necessarily perpetrated by the majority of people, but we know empirically that bad is stronger than good. So all it takes is one or two leaders who don't necessarily care about other people or may not be thinking about the long term to begin to undermine a culture. And I think, sadly, those leaders are often the ones that get ahead.

- Is this at this moment in time-- look, we're still dealing with the COVID-19 pandemic, now we have folks worried about a recession and layoffs. Is this the most toxic culture you've ever seen inside corporate America?

- I think I've seen worse, but I've seen some really terrible moments, I guess, but also some really encouraging ones, right? I saw a manager not too long ago say, look, it's OK to call in sick, it's also OK to call in sad. And what I thought was powerful about that message was not the idea that we're going to give you five sad days a year. And if you don't use them up by December, they're gone, right? It was the thought that we needed to normalize mental health as part of health.

And that just as you would take some time for yourself if you broke your leg or you got long COVID, that if you're burned out, if you're languishing, if you're depressed or anxious, we want to try to take care of you. And I think one of the few silver linings of the pandemic is that more people at a leadership and management level are starting to recognize that if you do not care about people's quality of life, you don't get quality work.

- If you're a leader, how do you spot these toxic behaviors in the workplace?

- Well, I think the first thing to do is to recognize that people often have a hard time speaking up. So your job is to create an environment of what Amy Edmondson has called psychological safety, which is the sense that I could take a risk without being punished. And one of the ways that a lot of leaders try to do that is they say, hey, if you see any concerns or issues, please let me know.

It's like in an airport, see something, say something. What I found in my recent research is that's not enough because when I say, hey, let me know if you see a problem, you don't know how I'm going to respond to that problem. I might bite your head off, I might ignore you, or I might address it.

What I've found is much more effective is to actually go the extra step and talk about the problems that you see. So if I say here are some, maybe, cultural shortcomings that I think we might want to work on, what do you think of these, I'm not just claiming that I'm open to feedback, I'm actually proving that I could take it.

- What is the impact? I mentioned earlier, we're now looking at a down the barrel of a potential recession here, what impact psychologically is that having on the workforce?

- Well, we know that when people have faced recessions they tend to fall into a threat rigidity response. They focus narrowly on trying to protect their jobs instead of broadly on trying to help their organizations flourish. And I think this is a good moment to say when things get really difficult, we've got to ask what if we were in a situation where our company couldn't survive.

There's a great exercise that I saw consultant, Lisa Bodell, do called kill the company where she likes to take management teams and ask them to try to put their own company out of business. I have to tell you, I've never seen a more energized group of executives in my life than when we go through that.

But what's so interesting is people come out of that exercise and they're much more creative on offense than defense. If you run save the company, you get a bunch of boring conventional ideas, whereas kill the company people drill into possibilities they never would have voiced otherwise. And the psychological safety is built in there, right? When my job is to put the company out of business, there is no problem that's unsafe for me to voice. And so, I think a recession is obviously a threat, it's also an opportunity to reconsider some of your best practices that were built for a world that just does not exist anymore.

- Is there a way? There are people watching this probably likely concern about their own jobs. Is there a way for them to recession-proof their own selves?

- Well, I think there's a little bit of the COVID effect that's already added some recession-proofing, right? Which is it's easier to get a job anywhere than it was before now that so many companies are doing hybrid and remote work. So I think being open to working outside your location is something we should all be aware of.

I think the other thing I would say in terms of recession-proofing is if you look at the values that companies are putting on the table for job descriptions right now, we have a huge premium on soft skills. So the most sought-after skill right now is actually the ability to communicate. And I think the sad reality is that a lot of people don't know how to showcase that.

First thing I would do is I would say, OK, sit down and rewrite your resume and your LinkedIn profile to show that you can communicate in a way that makes you stand out. And I think it's a great opportunity then to not only attract interest from outside, but also remind your existing employer of what you bring to the table.