When I was an adjunct at NYU in 2018, we taught a business school case on Boeing. The central theme of the case (for me) was that Boeing was a company with serious internal cultural problems, well before its planes started flying apart in the last two or three years.

Boeing’s financial metrics have also been shaky recently. But I think ugly numbers on the income statement and balance sheet are lagging indicators of a company’s health. I could have told you back in 2018 that this was a company headed for trouble, and that opinion was based on public information we were able to gather for the case. The current indicator was that the company’s culture was rotten.

How did the culture become rotten? I don’t know exactly, but my strong suspicion is that the rot was a result of infection from the senior leadership of the firm. My thesis: if financials are a lagging indicator of a company’s health, then leadership is the leading indicator.

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This is the introductory piece of a seven-part series on how unmanaged and unprocessed emotions in leaders manifest as toxic behavior in the workplace, and how that behavior undermines the work product of employees and ultimately the entire firm. In essence, it’s a description of how small-scale antisocial actions crack the foundation of a large enterprise.

Does Toxic Leadership Matter?

You might be thinking, “Sure, some leaders are assholes. But does this really hurt the bottom line?” I think, in most cases, it does. And I’ll die on this hill.

Fundamentally, leadership is about organizing and regulating the behavior of others. Behavior is largely (entirely?) driven by emotional states. As a leader, I can’t get the organization to move in the direction that I want without being deliberate about how I want people in the organization to feel.

I’ll speak for myself. I’ve observed a large divergence in how well I work depending on my emotional state. I can lose hours if I have some negative emotional interaction—I can be sitting at a desk, and to an outside observer look like I am working, but my internal mental state is a mess and I am not actually getting anything done.

As a leader, I want to avoid putting my people into that mental state. And as a leader I have enormous influence over the emotional states of the people who report to me. I can choose whether I want to put them into constructive or destructive states.

Constructive =/= Nice

Constructive leadership doesn’t mean being nice. Work isn’t play. It is going to be hard and uncomfortable at times. Work is work.

Work environments need to reflect the emotional state necessary to accomplish whatever the organization’s objectives are. If I’m in command of Seal Team Six, I do not want it to feel like a day at the spa. If I am running a weekend retreat for yoga teachers, I probably DO want it to feel like a day at the spa.

In my current role, I am a “leader” in my own classroom. The environment I want to cultivate in my organization serves the outcomes I want the organization to achieve: increased self-confidence, professionalism and financial knowledge for my students. The emotional state I want to put them in is one of light-heartedness and curiosity, where they feel they have permission to take risks and express their own ideas. That emotional state serves learning.

There’s also a part of my class which is less pleasant. We practice professionalism as well—being on time, being prepared for class and being actively engaged. I create pressure and emotional stress around that objective—punishment for being late, not saying anything, etc. That is not nice! It’s stern. But people respect the behavior I ask for because they understand why I am asking for it.

(And people hate my exams. My response: quit whining. The exam is way easier than anything you’ll do at Goldman Sachs.[1])

The Six Behaviors That Create Chronic, Maladaptive Stress

Over the next six weeks, we’ll be doing a deep dive into six destructive behaviors that dysregulate teams and erode the foundations of companies over the long run. We’ll talk about the behavior itself, how it manifests in a work environment, what is going on emotionally for the leader engaging in the behavior and how it affects teams.

The six behaviors we’ll cover are:

1.      Dishonesty

2.      Bullying

3.      Scapegoating

4.      Micromanagement

5.      Conflict Avoidance

6.      Favoritism

Three concluding points:

First, this isn’t the full list of harmful behaviors leaders can engage in. Hypocrisy, undermining subordinates, and sexual misbehavior also show up in professional environments and can rupture the fabric of the organization. Why am I not talking about those? They either overlap already with the other behaviors, or they are so distinct—like sexual misconduct—that they need another framework for analysis that includes legal and ethical dimensions.

Second, these behaviors can exist anywhere in the organization, not just at the executive level. As a CEO, even if I am emotionally regulated enough to avoid these behaviors myself, I still think it’s my responsibility to stamp them out of the rest of the organization.

Finally, I think incompetence is worse than all of these things. An incompetent leader will destroy a business quickly, while a toxic leader will damage it over the long run. Of the two, I’ll take the toxic leader. But these two things are not mutually exclusive—I don’t see any tradeoff between IQ and EQ. In fact, I suspect the latter. People who function well in one domain have a stable foundation to build up the other domain. (Sadly many people capable in one area choose not to build up the other.)

Next week, we’ll dive into dishonesty. Perhaps the most common, and most corrosive, of all the toxic behaviors.

Exercise

There is no exercise this week. Enjoy your break!

[1] That actually isn’t true. I’ve shown the test to colleagues and even they think it’s hard. I guess I just take pride in giving a very difficult exam 😊