In my experience, dysfunctional organizations tend to have a lot of commonality. The most harmful thing I see consistently in the culture of dysfunctional orgs, though, is this:
A lack of honesty and feedback.
As companies grow, once the initial teeth honed on ruthlessly pursuing a shared vision are dulled by time, effort and new hires, groupthink tends to become extremely prevalent. The most terrifying part? This happens without many people realizing. One day, you’ll discover that your culture of “support and kindness” has reached the point where a collective, powerful group will hunt down and slaughter any thoughts that run counter to the popular narrative of said support and kindness. (If you are a CEO, you are in fact responsible for this very narrative, and that terror should run deeper.)
You’ve heard of toxic positivity, and that’s exactly what this is—but within company culture, I like to refer to it as toxic empathy.
Toxic empathy kills the ingenuity of individuals and the spirits of entire teams. It leads to a Keynesian style of thought, where the primary way to win is to predict what others will think—or, more specifically, to predict what the CEO will think. It’s the behavior of movie villains that you once thought purely fiction: a founder punishing underlings for questioning her, for disagreeing with her statements or for delivering bad news. And yet, one day, many leaders will see this fantasy play out in real life.
It’s easy to understand why. Your people are often dependent on their livelihoods for survival. Vesting schedules only incentivize, with golden handcuffs, the decision to “shut up and vest.” Likely without realizing it, you’ve built a structure that strongly rewards yes men and sycophants, and thus, it’s easy to surround yourself with them. Then it becomes a hard problem. Your resulting longing for truth and authenticity will drive you as The Founder to join CEO support groups and hire executive coaches—just to hear the right amount of pushback that’s tailored precisely to your ego.
It would be hilarious, if it wasn’t a circlejerk to which so many Founder CEOs fall prey.
The only company culture that can withstand toxic empathy is one of total honesty. To come by it naturally, you’ll need to hire only strong individuals who won’t alter their views based upon the risk of losing their livelihood—a herculean task. To build this culture, you must honor the core tenets of empathy and kindness. True empathy is deep understanding. True kindness is an unhindered ability to tell the truth.
To me, the greatest tragedy isn’t sycophancy toward management (although that’s an atrocity in itself). The true tragedy of toxic empathy is indifference to your reports. As a leader, you are responsible for the development of every person that works for you. As a manager, you are responsible for sharing candid feedback regarding performance with each of your direct reports. And as an employee, you owe it to the people with whom you interact on a daily basis to reflect your perception of reality to them. They owe you the same.
So in a world of deep understanding and truth-telling, what makes for effective feedback? For starters, fast timing is essential. As soon as an insight is generated, it must be written down, and specificity is paramount. When under par work is submitted, it needs to be delivered back with an explanation of the faults. When I interned at a large PE shop, one of my fellow interns submitted a model to an associate that was blatantly wrong. The numbers quite literally didn’t add up. The intern received the paper back with errors circled in red ink, and in large, capital letters on the top, the word “SHITTY.” In today’s coddled environment, someone’s getting reported to HR—but to my friend, the message was received.
Compare this situation to an alternative version: the associate silently corrects the errors, then sets up a conversation a few weeks later where he gives the intern “some comments” on the poor quality of work. Imagine the work that has continued to be done between initial delivery and feedback conversation! Imagine the intern’s confusion around hearing that his work has been terrible and no one told him until now! This happens all the time.
One of my favorite lines from Ray Dalio emphasizes the necessity of true feedback: “Pain plus reflection equals progress.” Leaders who can tap into true kindness, call out sloppy work and set a high standard for conduct in the workplace are the gold standard here. Without feeling the pain of failure, there can be no growth. Feedback isn’t a power play. Ultimately, the point of giving and delivering feedback is to help people change their behavior and improve, not for the messenger to feel good about delivering pain.
True feedback should hurt. The painful truths we hide from ourselves hurt. There’s a reason that Feynman’s first principle is that “you must not fool yourself, and you are the easiest person to fool.” In today’s world, we frequently get the opposite. Hearts and likes give us the illusion of consistent love and adoration. Algorithms tailored to deliver exactly what we want to hear strengthen our convictions that our truth is the truth. Confirmation bias at its finest, and it’s not easy to escape. True leaders both seek out and hear feedback about themselves, and deliver it to others in a way that matters and can make a difference.
As an employee at any level, it’s not kind to withhold your opinions and allow the company to make poor decisions. It’s not empathetic to hold back transparent feedback and allow a colleague to work on something they’ll later regret. It’s not thoughtful to bite back your candor and let one of your reports produce poor-quality work that stunts their career growth and eventually results in their firing.
Toxic empathy is perhaps the least kind culture you can build at any level in your company because it allows people to fail without recourse. Set a standard and be ruthless in your manifestation of it. Make sure people know when they come up short. Aggressively communicate when they do. Most of all, create the high-performance culture where failure is an expected pathway to success—not the culture that fears failure.
Culture comes from the top. The reason Founders can be so effective is they are unique in the company. They cut through resistance and align the company around their vision. You want a performance culture? Mandate it. Monitor it. Most importantly, manifest it through your actions.
This culture won’t be for everyone. The best cultures aren’t. The idea that everyone can act exactly as they’d like and live up to the expectations of a high-performing culture is ridiculous. Go forth and execute on the waves of feedback, and you’ll drive your culture towards incredible performance and success.