By Candace Coleman, CultureWise Content Manager
Workplace dysfunction is a slow burn. It often starts when a few people’s unproductive attitudes and habits slowly spread to the coworkers around them. Then, a growing group of employees starts to lose confidence and the desire to work together for common goals. Eventually, the unhealthy environment can influence almost everyone, and the entire team can start to get off-track.
The signs of deterioration can be subtle, and sub-par conditions may not flare up into a full-blown toxic atmosphere. But a dysfunctional workplace can still be a significant drain on employees’ enthusiasm—and eventually the company’s bottom line.
It can be challenging for a business leader to pinpoint a cause behind a mixture of seemingly unrelated misfires. But there is a common thread in every dysfunctional workplace: a weak corporate culture.
Why does Workplace Dysfunction Happen?
A dysfunctional workplace has various symptoms, but the underlying cause is a mixture of insecurity and mistrust. Essentially, the weaker aspects of human nature trigger the problem.
“Teams are dysfunctional because they are made up of human beings with varied interests and frailties. When you put them together and leave them to their own devices, even the most well-intentioned people will usually deviate toward dysfunctional, unproductive behavior. And because most leaders and managers are not schooled in the art of building teams, small problems are left untreated and spiral further and further into ugliness and politics.”
Lencioni asserts that trust is the most critical element of a cohesive workforce. People’s insecurities erode trust and lead to the behaviors that create workplace dysfunction.
Too often, leaders don’t make the connection between insecurities and dysfunction, or they don’t perceive insecurities as treatable work challenges.
Organizational psychologist Mark Scullard makes this observation:
“We ignore insecurities as either a non-issue, or as a minor nuisance, or, at most, as a natural occurring condition that we simply have to work around.”
Despite our human tendencies, Lencioni and Scullard maintain that leaders can successfully address these intrinsic characteristics and that dysfunction isn’t inevitable.
If leaders create a cohesive model for collaboration and communication, they can help build trust and unify their teams.
How to Diagnose a Dysfunctional Workplace
Leaders wanting to get a grip on an underperforming team should assess patterns of behavior in the workplace. There is usually more than one negative trend.
These are some of the hallmarks of an out-of-sync team that Scullard says are brought on by insecurity:
- Risk aversion
- Hiding mistakes
- Resistance to change
- Passive-aggressive and indirect communication
- Withholding information
- Avoiding feedback
- False consensus (agreeing with a decision when you privately don’t)
The above indicators of dysfunction lead to:
- Reduced accountability
- Lack of focus
- More mistakes
- Duplicated efforts
- Sluggish performance
- Wasted time
- Lower morale
- A self-over-team mentality
Regardless of how good a company’s goods and services are, conditions like these can undermine success. As CultureWise Founder and CEO David Friedman notes:
“Leaders may have a brilliant strategy, but if they have a dysfunctional group of employees, they’re not going to get very far.”
The Ultimate Cost
The behaviors that cause a steady deterioration of functionality cost money. Even if the outflow is happening so slowly that it’s hard to quantify, it adds up drip by drip. Left unchecked, the stream of inefficient actions and attitudes can lead to issues that bear a much higher price tag.
These are the five most expensive problems that spring from uncontrolled dysfunction:
- Project Failure
- Employee Turnover
- Customer Dissatisfaction
- Failure to Attract Top Talent
Ongoing dysfunction can generate so much tension that it often evolves into outright conflict among coworkers. When that happens, team mentality dissolves in an atmosphere of blame and hostility, and management is forced to intervene to keep the peace.
A study cited by CPP Inc. in its 2008 Global Human Capital Report said that U.S. workers spent approximately 2.8 hours involved in conflict every week. Based on average hourly earnings of $17.95, that equals around $359 in paid hours that could have been spent on productive work.
The same study found that 25% of employees reported that conflict had led to work absences. Stress-related medical issues or simply avoidance of uncomfortable situations caused the lost days on the job. Based on the above hourly rate, a business will spend $700 to cover the cost of just one employee who misses five workdays a year due to conflict.
Tangential to the lost productive time for team members are the hours that management spends mediating issues. Time is money.
Workplace dysfunction can be a significant contributor to project failure. Many of the items on Scullard’s list can lead to a breakdown in communication, which significantly contributes to delayed or poorly executed projects. Communication failure has many manifestations:
- Silo mentality—individuals or groups declining to share information to further their own agendas or because they’ve failed to acknowledge other’s people’s need for it
- Ongoing indifference to sharing ideas brought on by slumping morale
- Failure to actively listen to other people involved in a project
- Unwillingness to speak up when problems are detected due to fear of a negative response
Raconteur reports that:
- 30% of failed projects stem from poor communication
- $122 million of every $1 billion companies spend on projects is wasted on poor performance
- 32% of organizations say projects are “never or sometimes” completed on time
Aside from immediate costs incurred from project failure, long-term financial drains include a decline in a company’s reputation and loss of business.
The combination of an unpleasant atmosphere and people’s inability to perform effectively in a dysfunctional workplace leads to employee disengagement. Unengaged workers have little or no commitment to the organization and its goals, affecting how vested they are in their job roles. If their disinterest plummets to unhappiness, they look elsewhere for work.
- The annual overall turnover rate in the U.S. in 2017 was 26.3%, based on the Bureau of Labor Statistics.
- The cost of replacing an individual employee can range from one-half to two times the employee’s annual salary.
That means that a 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.
Also factored into the cost of turnover is the time it takes to train replacements. It often takes months for new hires to get up to speed, and that negatively impacts productivity.
Ultimately, dysfunction affects the customer experience. Tensions among employees, poor service, and missed commitments will drive customers away.
An Acquia report states that more than 70% of consumers would move on after just one bad experience. Even a strong workforce can have occasional dissatisfied customers. But the chance of that happening increases exponentially with a dysfunctional team, and the costs are staggering.
Research by NewVoiceMedia in 2018 indicated that U.S. companies were losing $75 billion a year due to poor customer experiences.
After polling people who encountered poor customer service, their researchers concluded that:
- 39% would never use the offending company again
- 37% would change suppliers
- 36% would write a complaint email/letter
- 28% would post an online review
- 26% would complain publicly via social media
- Only 7% would take no action.
Large corporations may be able to absorb statistics like this, but they can be devastating to a small business. For companies with 500 or fewer employees, a successful transaction record is critical for survival.
Failure to Attract Top Talent
Qualified and talented job-seekers actively research an employer’s reputation. Just as high customer satisfaction positively influences a company’s public image, happy and engaged employees signify an exemplary workplace. The converse is also true.
According to Wade Burgess, Vice President of LinkedIn Talent Solutions, having a dysfunctional team was among the top three factors contributing to a bad reputation as a place to work. The data he commissioned also showed that companies spend millions of dollars in additional wages to make up for poor reputations. He notes:
“Based on an average U.S. salary of $47,230 and the minimum 10 percent pay increase our research showed as necessary to convince a candidate to take a job at such a company, it would cost about $4,723 more per hire.”
He added that even a 10 percent raise would only tempt 28 percent of talented job seekers. If the best candidates avoid working for a dysfunctional workplace, companies with a poor reputation wind up taking less qualified people who become continuations of the problem.
The Role of Culture in a Dysfunctional Workplace
Articles have been written about how a dysfunctional workplace chips away at a company’s culture. But that assessment isn’t entirely accurate. Organizational culture is comprised of the behavioral norms within an organization.
A dysfunctional workplace doesn’t impair a company’s culture—it is the culture.
The good news is that culture isn’t a fixed entity—it can change, and it can improve. Organizations that take measures to inspire healthy behaviors can help dispel the insecurities and mistrust that cause dysfunction.
Leaders can build, enhance, and even transform culture through an intentional process, such as the one developed by David Friedman. The basis of his methodology is to:
- Identify the preferred behaviors that will make a workplace thrive
- Model and teach the behaviors in multiple, impactful ways
- Encourage and assist employees to regularly discuss and practice the behaviors until they become second nature
Because these behaviors are explicitly defined and communicated, there is no question about how people should interact. Employees are provided with a “blueprint” and coached to use a common language that describes behavioral expectations. This process gets everyone is rowing in the same direction and strengthens team unity.
For such a culture initiative like this to be effective, it must be ongoing. Over time, behaviors that bring out the best in people will replace the detrimental actions and attitudes that cause workplace dysfunction.
How CultureWise Can Help Solve the Problem
Friedman explains the overwhelmingly effective method described above in Culture by Design. The book outlines his eight-step framework to create, drive, and sustain a highly functional culture. Learn more with a free two-chapter download.
After he wrote the book, Friedman expanded on his concept by developing CultureWise. Using a suite of innovative tools and a unique delivery method, this groundbreaking system operationalizes his method to improve culture.
Both the book and CultureWise can help organizations struggling with dysfunctional teams educate their way to a meaningful change.
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