Corporate culture might be led from the top, but it doesn’t stop there. So when things go bad and the CEO is replaced, how can the new CEO deal with the legacy of a toxic corporate culture?

For the sixth article in our collaboration with Culture Amp, we explore how a new CEO can address toxic corporate culture with Kate Le Gallez. The original article first featured here.

Unsurprisingly, there’s no easy fix (to bad culture). In this article, we’ll look at some of the key ways to rebuild corporate culture, like dealing with the followers left behind and investments that need to be made. We’ll also look at one example from Your Call that shows just how much effort a new CEO needs to put in to turn things around.

Previous posts in this series: 

  1. What is sexual harassment in the workplace?
  2. Why don’t people report sexual harassment?
  3. How can you create a reporting culture?
  4. How can you plan to respond to sexual harassment at your workplace?
  5. What are the red flags to look for?

A toxic corporate culture doesn’t just leave with the CEO

While the influence of the CEO on corporate culture is strong, when things really turn toxic it’s not usually as easy as replacing the CEO and all will be well. Research has shown that it’s just as important to find out whether followers of the former CEO remain and make necessary changes so that history doesn’t repeat.

According to one study, it’s the “conformers” and “colluders” that organizations need to look out for. Conformers are people who are prone to obedience because of personal insecurity, rigid adherence to hierarchies or willingness to turn a blind eye to protect themselves.

Colluders are different. They actively align themselves with a cancerous leader either for personal gain or because they personally share the leader’s views and beliefs.

Turning corporate culture around means dealing with these two groups. The authors of the study suggest that colluders remain a threat to the business and should be let go. But conformers can often remain and positively contribute to the new corporate culture, they just need to be shown how. In particular, they need to be encouraged to challenge more and hold leaders accountable, while working on psychological safety will help bystanders feel empowered to speak up, rather than turn away.

Invest in change

A change in leadership is a strong signal, both internally and externally, that the organization is committed to cultural renewal. But it needs to be backed up by further action. When a corporate culture is truly toxic, it’s not about tweaks, it’s about wholesale change and that often means spending money.

Brian Kropp, from research and consulting firm Gartner, told The Atlantic, “A lot of companies try to talk themselves out of these sorts of cultural challenges. They’ll write memos, send notes, make presentations, saying things need to change. But at the end of the day, if you’re not spending money to try to change the problem, the likelihood that you’re actually able to change the corporate culture is incredibly low.”

Kropp says long-term initiatives, like training around new expectations and behaviors, creating new roles and hiring new people who will support the new corporate culture, all require ongoing investment. This is alongside investment in the policies and procedures to support a speak up corporate culture, which we’ve talked about before.

These measures, and the constant investment they require, aren’t just for show, although that’s part of it. They’re about creating new ways of behaving and working that will replace the old cultural DNA and prevent it from re-emerging.

An example of what it takes

Click here to read more.