Identifying toxic leaders appears to be a burning topic in business today. Many of you downloaded our Toxic Leadership Checklist to better understand how to do this.
We heard a lot of interest in addressing two key questions that logically follow:
- What are the economic consequences of toxic leaders?
- If we have a toxic leader, is it worth investing in his or her development?
Indeed, there are serious economic consequences from toxic leaders. According to the Workplace Bullying Project (2013), the financial cost to business is between $6 and $13 billion per year that includes decreased productivity, absenteeism, staff turnover and morale problems. The workplace stress caused by bully bosses often leads to higher medical costs and creates a serious risk of litigation.
The Company’s Obligation
Once employees report the harmful impact of a toxic leader, the company has an obligation to investigate, determine the legitimacy of the claim, mitigate the risks and protect employees from the venomous behavior and its consequences. However, deciding what response to take is not easy. If the toxic leader has received high performance ratings and achieved outstanding results, you have two questions to ask: “Can this leader be saved?” and “Will it be worth it?”
Hundreds of thousands of dollars are invested to help “fix” the bad behavior of leaders and managers each year. However, unless the person in question sees the need and is willing to change his or her behavior, the investment is a waste of company resources.
Making the Decision
When determining whether or not to invest in a leader, consider the following:
- Is this the first time the leader has been reported or received negative feedback?
- Has the leader asked for help and expressed a desire to change?
- Is it possible for this leader to recover with his or her peers and/or direct reports?
If you can answer “YES” to these questions, consider investing in the person’s development. If you answered “NO,” remember that toxic leaders cost money and breed a negative chain reaction in businesses, non-profits, governments, educational and religious institutions.
One way to help you determine the cost of “bad behavior” is to add up the financial impact the leader has caused, e.g., from people lost or the business results that were impacted. If two entry-level employees quit and you have to recruit two new ones, the cost of replacing them might range from 10-15k. However, if an employee files some type of harassment suit, you would then need to add in the following potential costs: legal fees, financial settlements, recruiting fees, medical fees, time off, lost productivity, management time, onboarding new employees, etc.
A Path Forward – Assuring Readiness and Selecting a Coach
If you decide the cost is palatable, then to ensure a successful coaching engagement you need to determine whether or not the person is open and ready for coaching. If they are, conduct a rigorous coach selection process to ensure that the coach will be a good fit for the leader’s specific needs.
Please download a copy of our checklist to use yourself
Is This Leader Ready for Development? Checklist.
You might also want to read our coaching book, Leadership Coaching: Fast Track to Effectiveness, to learn other helpful strategies to maximize your development investment.
For additional information, contact Becky Ripley.