Rotten on the inside – how to avoid a culture turning toxic

He has been publicly dealing with the fallout since Punks with Purpose (a group of former employees) released their open letter addressing the toxic culture, swiftly followed by mainstream media picking up the story and running with it.

The accusations vary, including a focus on growth at all costs, bullying, intimidation, over-work and deceit. All damning accusations. Furthermore, since the initial letter was released, a further 200 employees have signed it and the numbers keeps growing.

Mr Watt has since released ‘The Road Ahead for BrewDog’, which is his response tackling the issues raised. He has taken responsibility and is charting a clear action plan to address all the points raised with timelines. He is literally ticking all the right boxes.

However, the question is, how did a business like BrewDog end up here, under the media spotlight and being lambasted by hundreds of previous and current employees for its toxic culture?

The growth conundrum vs backlash

Unfortunately it appears that the rags to riches story of BrewDog is a victim of its own success, with James Watt becoming a leader whose drive to succeed led to its “culture of fear”.

From the outside, BrewDog had held an enviable position. The bootstrap start-up that was famously declined investment in the TV series Dragon’s Den, launched in a garage in Scotland. Prior to this news, the company was a pin-up example of a business acting with purpose and considered a great place to work. It seems that when you scratch beneath the surface their phenomenal rise to glory has in fact been at the expense of their people.

But BrewDog isn’t alone – they are not the only brand that has made mistakes and had their reputation tarnished by employee discontent. Uber’s cutthroat culture –– evident in Travis Kalanick’s motto, “Always be hustling” –– enabled toxicity because it rewarded growth at any cost. However, Uber’s IPO provided an unfiltered look at how bad it was. To the extent that the company finally admitted: “Our workplace culture and forward-leaning approach created significant operational and cultural challenges that have in the past harmed, and may in the future continue to harm our business results and financial condition.”

This demonstrates that a fine line needs treading between greed and growth. Business drive can still be achieved, but it requires a clear framework of culture and values to support the people that are making its business success possible.

Culture starts with leadership

One of the key oversights that many CEOs make is that they focus on growing the business and expect that the culture will take care of itself. They mistakenly believe that culture should be left to the HR department rather than taking ownership of it at a leadership level.

That’s the paradox of toxic cultures: As alluded to above, some of the most successful businesses are the ones grappling with the culture going south – they fail to read the signals.

The signs are usually evident, but sometimes are ignored. When a company witnesses an increase in staff departures or internal acrimony occurs, this is when to take heed. By being in denial, rewarding negative behaviours, or looking the other way, leaders become complicit of a toxic culture.

When leaders continually let harmful workplace behaviours linger, they’re rewarding toxicity. Just like a virus, if you don’t contain it early on, it will spread so fast, it will become unstoppable.

Listen, listen, listen

Best practice recommends that companies need to listen to employees – get a proper view from the front line and not just through an old-fashioned annual engagement survey.

The new workplace status quo requires companies to be more innovative in their approach to genuinely gather authentic insights. This incorporates a mix of in-person communication, pulse checks, focus groups and employee engagement strategies.

Psychological safety is a critical issue that has growing importance within workplaces. New initiatives need to be made available to encourage staff to provide their input in a secure and inclusive way. One such recommendation would be to adopt a hybrid of digital software and in-person forums to achieve a cross-section of opinions. Launching a third-party whistle-blowing platform or introducing a culture committee that represents a diverse spectrum of the workforce are just two examples of the options available.

Is your culture a strategic priority?

Management guru Peter Drucker was famously quoted as saying: “Culture eats strategy for breakfast.” As the world tries to reimagine the workplace in the new normal, this is more relevant than ever before.

According to Deloitte research, 62 percent of executives believe that “clearly defined and communicated core values and beliefs’’ are considered as factors that substantially contribute to a company’s success.

As we emerge from the global pandemic business leaders across the globe are under more pressure than ever to make the numbers work, can they do this and achieve a great culture at the same time?

One of the best things about building a positive culture is that it can be done with any budget, at any sized company and within any industry. As long as time is given to genuinely prioritise and invest in culture, their business will grow and thrive.

Investing in expertise

Ultimately culture happens. Whether planned or not, all companies have a culture. So why not create a culture that is an asset not a liability. An outstanding culture cannot be created overnight. It requires patience and perseverance.

Businesses need to invest in external third-party consultancy to deliver strategic advisory, implementation support and in-depth reviews of their culture rather than rely solely on internal assessments which can be subject to lack of employee trust.

What we know for certain is a toxic culture leads to three inevitable results of loss of key talent, poor performance and employee health issues. On the flip side a positive culture will offer you talent attraction and loyalty, improved performance, employee advocacy and reduced losses from health issues and attrition.

It can be lonely at the helm and it is never easy, but with the right focus and attention on culture, let’s hope that CEOs and companies like BrewDog can find the antidote.

Lucy d’Abo, brand culture expert and leadership advisor.