Toxic Leaders: Why leaders and boards tend not to act

A basic principle in toxicology is "The dose makes the poison." Although the source of all life, even water, is toxic to humans in overdose—6 liters in 3 hours is lethal for an adult human—toxins are used on purpose in some medicines and cancer treatments. The dose makes the poison or the medicine.

The theme of toxic leaders and what makes leadership toxic is a regular topic in the media and social media. These conversations tend to gravitate around naming the bad behaviors of an individual but neglect to dwell on the systemic aspects that lead to a poisoned organization.

Symptoms of a poisoned organization

When it comes to the toxicity of leadership, instead of starting from the list of ingredients, I start with a non-exhaustive list of symptoms and consequences it brings to an organization that should ring a bell, trigger questions, and initiate action.

• High Turnover: Employees are more likely to leave the organization.
• Low Morale: Workers may feel undervalued, stressed, and demotivated.
• Decreased Productivity: The negative atmosphere can lead to less efficient and effective work.
• Poor Team Cohesion: Toxic behavior can create divisions and reduce collaboration.
• Reputation Damage: The organization’s reputation can suffer, affecting recruitment and client relations.

Why leaders and boards tend not to act - part 1

Despite the red flag facts in the symptom list above, the leaders of potentially toxic leaders tend to be slow to intervene. There are strong reasons why the C-suite and its boards tolerate organizational poisoning. Some organizational outcomes mask the toxicity in the practices that lead to these outcomes.

• Positive business results: A results-oriented approach can be seen as a mark of strong leadership, especially in competitive industries where performance is critical. Investors, shareholders, and business analysts often focus on financial metrics such as profitability, market share, and stock price, valuing leaders who deliver strong performance. However, these stakeholders typically lack insights—or do not even care—about how these results are generated.
• Charisma and Vision: Leaders with a compelling vision and charismatic personality can inspire loyalty and admiration, even if their behavior and methods are controversial.
• Market Disruption: Leaders who disrupt industries and set new business standards can be seen as pioneers and game-changers, earning respect for their impact on the broader market.

That is why all the big names in tech, from Musk to Zuckerberg, Jobs, Gates, and the long tail of their disciples, get so much credit and devotion despite the machiavellistic practices that might scaffold those "positive" outcomes. To quote Kara Swisher: "As it turned out, it was capitalism after all."

Unbalanced Ego

In conversations around toxic leadership, "too big ego" and "it's all about me first" often appear front-stage, giving Ego a bad name. But the thing is, a well-dosed ego makes the difference between a great leader and a toxic leader. The dose makes the poison and the medicine, remember?

Ego as medicine

Ego fosters self-confidence, enabling individuals to believe in their abilities and make decisions without excessive doubt. It contributes to resilience, helping people recover from setbacks and maintain a positive outlook on their capabilities. Ego drives ambition and the desire to achieve goals, pushing individuals to strive for success and improvement. A balanced ego ensures that people maintain self-respect and dignity, preventing them from being easily manipulated or taken advantage of. It enables assertiveness, allowing individuals to stand up for themselves and express their needs and desires clearly and confidently. A strong ego helps set healthy boundaries, ensuring one's personal space and values are respected.

Ego as poison

But ego can be toxic big time. An inflated ego can lead to arrogance and an exaggerated sense of self-importance, making one dismissive of others’ opinions and feelings. It can cause stubbornness, where individuals are unwilling to admit mistakes or consider alternative viewpoints. An overactive ego can lead to conflicts and strained relationships, as it might make someone less empathetic and more prone to arguments. Paradoxically, an overinflated ego can mask deep-seated insecurities, leading to constant validation-seeking behavior. Excessive ego can isolate individuals, as their need for superiority may push others away and prevent meaningful connections.

Keeping the balance

Balancing the ego involves a combination of self-awareness, empathy, and continuous personal growth. By practicing mindfulness, seeking feedback, engaging in mind-body practices, and fostering vulnerability, gratitude, and humility, individuals can maintain a healthy ego that supports positive self-esteem and harmonious relationships while mitigating negative ego traits like arrogance and stubbornness.

Why leaders and boards tend not to act - part 2

Leaders should not be left to their own devices to find and keep the balance. Every boss has a boss; VPs and C-level leaders have their CEO, CEOs have their boards, and boards have governments and regulatory instances. The "boss of the boss" has a huge responsibility to help their leaders keep the balance. The higher up the food chain, the higher the accountability, not only for achieving goals but also for achieving those sustainably for all stakeholders.

When a leader derails into toxicity, he bears great personal accountability. Still, we shouldn't forget how the system in which that toxic leader acts made it possible or even stimulated that person to turn to the dark side. And the bigger the system, the slower the course correction.

High up the food chain, touch with the shop floor gets lost. Value is created on the shop floor, not in the KPI dashboards and management presentations. If you look at a huge mountain at the horizon and measure it between your fingers, it is pretty small, but it becomes a different story when you must climb that mountain. The same goes for issues on the shop floor; those issues look neglectable from far away, but when you are in the midst of it, it becomes a different story. It's tempting not to zoom in and stay at a comfortable distance. A leader's zoom-in/zoom-out capability, knowing when to get involved and when to stay out of the way, is a highly underestimated leadership skill. The underdevelopment of that skill highly influences the efficiency and effectiveness of checks and balances mechanisms in organizations. The higher up the food chain, the bigger the positive or negative effect of leadership's zoom-in/zoom-out capability maturity.

The excuse to not act, which I hear the most in all of the organizations where toxic leadership appeared in some shape or form, is giving the mandate to the leader and giving the leader time to do things their way without calibration mechanisms. Sure, you do not want to micro-manage your leaders; you want them to do things and get results, even if they do it differently than you would. If you want to serve a different dish, apply a different recipe. You hired that leader to bring change. Change always comes with resistance and pain, so giving leaders autonomy and freedom to deliver their mission is important. But it does not absolve you from your responsibility to pick up the signals, provide feedback, and course correct before things derail.

That brings me to the last fertilizer for toxicity to flourish in organizations: a systemic lack of courage throughout all layers of leadership to provide and receive feedback and act upon it.

The vast majority of toxic leaders I met acted toxically from the start of their leadership mandate, and the more time and wiggling room they get, the worse it becomes, and the bigger the mess to clean up after they are long gone. Everyone makes casting mistakes; we're only human, which is ok. However, neglecting those mistakes and not taking corrective action promptly is a culpable omission.