Toxic Culture — What role does HR play?

“Either HR, market risk or f—ing fired. Which one is it?”

The topic of toxic culture is getting a lot of press at the moment due to two traders, who were sacked by ANZ Banking Group for inappropriate or offensive behaviour. Mr Alexiou and Mr O’Connor have filed lawsuits in the Federal Court against the Bank claiming a rampant culture of sex, drugs and alcohol was condoned among senior staff.

It’s common knowledge that certain industries such as financial services have an inherently toxic culture — think Wolf of Wall Street.  I’ve personally had conversations with people who have been told, ‘If a client puts a line of cocaine in front of you, you take it or you’re fired.’

It’s also well known that certain jobs and highly competitive industries tend to attract work hard/play hard types — bullies with a big case of misogyny and even bigger egos — and often a culture of ‘spend big to woo clients and use whatever “performance enhancers” necessary to get the job done’ is a draw card. 

And, if you aren’t part of this club and manage to have a successful career without compromising your values — you are one of the lucky ones, because many drop out and change direction or stay and assimilate.

Harvard Business School (HBR) researchers have profiled toxic workers, analysing data from 50,000 employees at 11 companies, and found toxic workers have several common traits including high productivity saying, “They are corrupt, but they excel in work performance.”

Despite this trade-off, the study found organisations are still better off avoiding toxic workers in terms of net profitability because the toxicity can lead to customer loss, loss of employee morale, increased turnover, and loss of legitimacy among important external stakeholders.

One of the other identifying traits the researchers found toxic workers shared is they tend to be strict rule followers saying, “It could also be the case that those who claim the rules should be followed are more Machiavellian in nature, purporting to embrace whatever rules, characteristics or beliefs that they believe are most likely to obtain them a job.”

For businesses like banks, it can be difficult to avoid toxic workers because their culture has always encouraged competitiveness which attracts these personality types and can breed a toxic culture if not actively managed.

Reading about the case of the two former ANZ traders, there seems to be a theme of hypocrisy.  It reminds me of the quote by Sir Thomas More:

“For if you suffer your people to be ill-educated, and their manners to be corrupted from their infancy, and then punish them for those crimes to which their first education disposed them, what else is to be concluded from this, but that you first make thieves and then punish them.”

Similarly, where does the blame lie if a company allows, encourages and even rewards staff for adhering to an off-the-record, unofficial company culture that contradicts the official company culture in every way, then later punishes the same staff for doing exactly what they were led to do? 

Leadership — or lack thereof — is at the core of a toxic workplace.  But which leadership level is to blame?

In the case of the ANZ story, Eddie Listorti, the new acting head of global markets, signed the termination letters of both traders and was cited at least three times by Mr Alexiou as acting inconsistently with ANZ’s code of conduct.

But Mr Listorti pointed the finger back to Mr Alexiou in his termination letter saying that as a “highly remunerated” senior executive, Mr Alexiou was responsible for setting the culture.

According to Mr Alexiou’s legal statement, Mr Listorti threatened him months before his termination saying: “Either HR, market risk or f—ing fired. Which one is it?”

In industries where bad behavior is commonplace, where does HR fit in?

According to the HBR study, it starts with identifying a “superstar” versus a toxic worker at the hiring stage - not an easy feat, as they both tend to be confident, high performers and can be easily confused. But, the researchers did find that toxic workers tend to be overconfident in their abilities, self-regarding, and claim rules should be followed.

I’d argue this is just a band-aid because toxic workers induce others to be toxic.  So, if an organisation and/or its existing leadership is inherently toxic, new employees may assimilate or bow out.  So, simply trying to screen out toxic staff at the recruitment level doesn’t solve the fundamental problem.

The direction of culture lies with the organisation’s leadership. If it’s toxic from the beginning, HR may be forced to turn a blind eye and only take action when it’s brought directly under your nose. However, this leaves you vulnerable because the blame finger can always point your way. 

If you really want to control your organisation’s culture, I believe HR has a responsibility to act as the organisation’s “Culture Police”, sniffing out culture crime and nipping bad behaviour in the bud no matter at what rung of the ladder the offender sits.  This just isn’t possible in all businesses. 

It seems that in the ANZ case, it’s a matter of a toxic culture that is happy to be toxic as long as no one on the outside knows about it.  Unfortunately, according to the SMH story, the news had started to leak. You might deduce that a few people had to be sacrificed — and they’re not going without a fight.

Read the SMH’s coverage of the story above, “Sacked ANZ trader says bank tolerated drugs, strip clubs.”