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How Leadership Teams Can Recover from Toxicity

Toxic or even moderately dysfunctional leadership teams can cause long-term harm to leadership team members and their employees. Here's a look at how leadership teams can recover from toxic environments.

Building a great leadership team is hard work, which is made even harder when teams and individual team members struggle to move on from past toxic experiences. Here’s a look at how leadership teams can recover from toxic environments. We start by presenting the symptoms of toxicity and our view on what leads to these unhealthy and unproductive environments and then we discuss what actions can be taken to help leadership teams recover.

Toxic or even moderately dysfunctional leadership teams can cause long-term harm to leadership team members and their employees. Symptoms of toxic leadership team environments might include cynicism, defensiveness, lack of trust, heightened reactions to minor issues, avoidance, and passive aggressiveness, among other destructive behaviors. Individuals develop coping mechanisms in these environments which often become new ways of operating. The following are a few examples drawn from our client work: ‘if you make sacrifices for the good of the company it will hurt your department’; ‘if you reveal a weakness the CEO will hold it against you’; ‘in order to get approval from the CFO you have to act like it was his idea’. Even when well-intentioned efforts are made to address toxic environments such as replacing the leader, terminating toxic teammates or restructuring, the path to recovery can be quite challenging.

Toxic Leadership Teams

In our experience there are three common issues that contribute to toxic leadership team environments. One of the most pervasive and perhaps one of the most destructive issues is tolerance of bad behavior from high performers – ‘As long as Bob keeps hitting his numbers, we can overlook his arrogant behavior.’ In essence leadership teams wind up living by two sets of rules which leads to frustration, resentment and infighting. Another factor that contributes to leadership team toxicity is destructive CEO behavior. CEOs set the tone for their leadership teams and when they micromanage, lash out emotionally, always need to be right, don’t like to be challenged, or hold grudges, their teams suffer greatly. In fact, executive coaching guru Marshall Goldsmith devoted an entire book to the 20 Bad Habits of Senior Leaders in his book “What Got You Here Won’t Get You There.” Bad CEO behavior can stifle team member development, hinder innovation, and lead to unhealthy competition among team members and their departments. A third common issue that fuels toxic leadership team environments is a focus on ‘what gets done’ at the expense of ‘how something gets done’ – ‘We can clean up the mess later, let’s just get it done.’ This ‘results at any cost’ mantra can be extremely dangerous as it often leads to a common practice of short cuts and circumventing rules. Short-term focus can also hinder a leadership team’s ability to pay attention to emerging trends and strategic actions that enable organizations to compete and grow.

The Path to Recovery

Beyond obvious business impacts, the long-term effects stemming from leadership team toxicity are hard to overcome. New ways of operating that individuals establish to cope with challenging environments coupled with ingrained assumptions teammates make about one another become strong barriers to recovery. A key to moving from a toxic environment to building a great team that is resilient, laser focused on results, and productively addresses increasingly complex challenges is acknowledgement. CEOs must help their teams recognize that structural solutions alone – termination, tweaking roles, changing the structure—will not be sufficient. Recovery requires a commitment to addressing damaged relational dynamics including recalibrating ingrained assumptions and rebuilding trust, which are both easy to say but really hard to do!

Ingrained assumptions must be dealt with for a team to start on the path to recovery. The challenge is that while sometimes assumptions are true often times they are not. Teammates might assume, for example, that the CFO is arrogant and aloof because she keeps to herself and just seems to ignore the dysfunction. But what if the assumption is wrong and the CFO has a tough time with conflict and deals with dysfunction best by digging into to her work? An even bigger challenge is when assumptions are right on target – ‘Bob always seems to renegotiate team decisions with the CEO.’ When Bob finally recognizes the impact of this bad behavior, many teammates will maintain their original assumptions and not trust any attempts Bob makes to change. Recalibrating assumptions is a key factor in repairing trust on toxic leadership teams.

The balance of this article describes how you can reduce the lingering impacts of toxic leadership team environments after they have taken initial steps to address bad behaviors.

Step One – Leadership

The first step in the path to recovery is strong leadership. CEOs need to help their teams acknowledge that they are all likely still suffering from the impacts of an unhealthy and unproductive environment. CEOs also have to emphasize that the work now is to look forward and do whatever it takes to build a great team with a healthy environment. Another crucial step CEOs have to take is to acknowledge their role in the dysfunction and begin to model new behaviors such as committing to listen to feedback, empowering team members, and holding individuals accountable to the same set of rules. When team members see the CEO demonstrating vulnerability – admitting mistakes and committing to change – they are much more likely to take steps to change themselves.


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