How to turn around a toxic workplace culture

This is an audio transcript of the Working It podcast episode: ‘How to turn around a toxic workplace culture’

Isabel Berwick
Hello. Before we dive into this week’s Working It podcast, I wanted to let you know about a free FT virtual event. I’m hosting a live chat about handling your finances, talking to my FT colleague Claire Barrett, host of the Money Clinic podcast on Friday, April the 21st. Claire will be talking about her new book What They Don’t Teach You About Money, and it’s packed with tips on how to manage your personal finances. You can register for free online and put your questions to us ahead of the event. Just visit ft.com/moneyevent to reserve your virtual ticket.

Ann Francke
If you are preaching inclusivity and diversity and fronting all of these campaigns, but you don’t hold your own senior leadership to account or you allow, routinely allow transgressions to happen, then all of that is for naught because culture isn’t a slogan on the wall, it’s not the campaigns you front. It’s how you behave every day to your colleagues.

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Isabel Berwick
Hello and welcome to Working It from the Financial Times with me, Isabel Berwick. The voice you just heard was Ann Francke. She’s chief executive at the UK’s Chartered Management Institute, and I was talking to her about how organisations can go about turning around a toxic workplace culture.

So how can leaders fix workplaces where things have gone very publicly wrong? It’s a question being asked right now at the UK’s leading business lobby organisation, the CBI. It’s reeling from the firing of its leader over sexual harassment claims. Three other employees have been suspended over separate allegations of sexual misconduct and harassment within the group.

We’ll come back to Ann Francke a little later. But first, let’s hear from Frances Frei. She’s a Harvard Business School professor and has personal experience of working with top companies after a crisis. Back in 2017, she was brought in to sort out the ride-hailing app Uber. It was in turmoil. A former employee called Susan Fowler had made accusations of sexual harassment and mismanagement in a blog post that went viral and had a huge global impact. Susan Fowler was named the FT’s most notable person of the year in 2017. Frances left her prestigious academic post at Harvard to go into Uber and work as its senior vice-president for leadership and strategy.

Frances Frei
I left Harvard, which I never thought I would, to go there and help it navigate its very public crisis.

Isabel Berwick
Did they ask you in?

Frances Frei
Oh, yes. And indeed, I said no upon first being asked because I read everything in the newspaper and I was like, what? I don’t help bad people win, I only help good people win. And I was suspicious. But then after meeting with everyone — and I met with 1,500 employees of the 13,000, so I met a lot to convince myself of two things. One, that they were genuinely good people; and two, that what I could do could be helpful. And when I was convinced of that, I switched from Harvard to Uber full-time.

Isabel Berwick
Could you paint us a picture for the listeners of what you found when you got there and what you did first?

Frances Frei
So the culture was damaged and so I went in there to find out what’s the root of the problem. Like, is the root of the problem it’s, you know, bad apples, like is it bad people behaving badly? And if you have that, you need exorcism for it. There’s not a redemption story there. If there’s good people behaving badly, culture can fix that. And so we wanted to see if it was sort of intentional bad behaviour or unintentional or more systemic bad behaviour. And what we found would happen to be the case at Uber is that while we did separate with 20 people in June of 2017, it was 20 out of 13,000. And so the culture was completely turned around with largely the same people.

And there were two roots of the problem that we found. One is that Uber had a what we would call a serious empathy wobble. So Uber was not very empathetic to the drivers, was not very empathetic to the regulators, was not necessarily empathetic to the shareholders. And so it had one problem manifesting in lots of different ways, which is actually comforting to me, because you can solve it once and then apply it more times. So they had an empathy problem on trust.

It also, when we looked at the complaints in the organisation, well north of 95 per cent of them could be categorised as interactions that somebody was having with their direct manager. And so there were 3,000 direct managers at the time. So we were either gonna find, you know, 3,000 bad people or we were gonna find a system where no one had ever been trained and taught on how to be a manager. And management is a skill. The Harvard Business School, we think it’s a skill that you can readily teach. But, and so what we found is that new junior people were hired as individual contributors because of the hypergrowth of the organisation. Five minutes later, they were promoted to managers and five minutes after that they were promoted to managers of managers. So we had all of these people who had never been taught how to manage. And so when the complaints were there, I mean, again, very few bad people, but people didn’t systematically know how to manage. So we just like flooded the place with a very large influx of education, of how to lead. What are the fundamentals of management?

Isabel Berwick
Was it a long, drawn-out process?

Frances Frei
A lot of people and a lot of organisations make the mistake of this is really big, so it’s gonna take a long time, and it’s simply wrong. This is really big, it’s really important and thus we need to do it with urgency. And we did at Uber. The culture was turned around I would say completely in nine months and you would never hear of the problems that they had again. And that has sustained with, you know, the wonderful leadership of Dara Khosrowshahi and all of the other people at the organisation. That’s what happened at Uber.

Isabel Berwick
So Dara Khosrowshahi was the CEO brought in a few months after you joined and one blog by a former engineer kicked off all the troubles at Uber. And in the UK, the CBI business trade body, you know, one woman initially came forward with sexual harassment allegations and the dominoes started from there. Frances, do you think all organisations are just one whistleblower away from a massive loss of trust?

Frances Frei
No. But I would say that all organisations that haven’t been deliberate and attentive to their culture probably are. So that’s, I think, the issue. I would like people to do fire prevention. I get brought in a lot for firefighting, but if you do fire prevention, you’ll never have to firefight.

Isabel Berwick
So what should organisations be doing to prevent a fire breaking out in the first place?

Frances Frei
I would say if you want a quick fix, there is a technology that’s called Vault Platform. And what it does is it allows people to record any . . . like they can submit any problem that they’re having until you need a really robust submission system. The issue for this one on sexual harassment and worse is that a lot of women or people for whom it happens to, we don’t want to be responsible for ruining somebody else’s career. And we also think we’re the only one. If we knew there were others, we would surely take action. But we don’t know there are others, and so many of us are hesitant. So what Vault Technologies did is they created this feature, which is called Go Together. It just means you can create, like if something happened, you can real-time take pictures of it. And it’s great technology and, you know, screen chat and take notes and all of that. But you don’t actually submit it to the company. You submit it so it’s time-stamped into the cloud and it doesn’t get released to the company until there are additional similar complaints. I think that’s a beautiful thing to do as a quick fix. And so that keen insight has been an amazing breakthrough.

Isabel Berwick
Yeah. So the harnessing technology to improve corporate culture.

Frances Frei
Yes, I would say that in my experience there are very few bad apples at the root of these sorts of things, and there are very large systemic challenges. And I have never, ever met anyone who, after they’ve done a successful turnround, has said, I wish I had done less and I wish I had taken longer. So please do it all and begin right now.

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Isabel Berwick
So that’s one inside story of how Francis Frei went into Uber and helped turn the culture around. But I wanted to know why these problems emerge in the first place. And I spoke to Ann Francke from the Chartered Management Institute. She’s also been a senior executive at a number of big blue-chip companies, and she’s been watching events unfold at the CBI. I mean, it’s sort of extraordinary how something that appears to be well-managed and inclusive can suffer such a collapse in trust. Have you seen that happen before and what’s underlying that?

Ann Francke
Yeah, I think it’s a really interesting illustration of something that we all know but we don’t often see brought into such sharp relief. Now, the CBI as we know has campaigned extensively for inclusive leadership, for diversity. They front a number of campaigns and do some really quite excellent thought leadership and research in this area. But the bottom line is that culture is about behaviour and if you are preaching inclusivity and diversity and fronting all of these campaigns, but you don’t hold your own senior leadership to account or you allow, routinely allow transgressions to happen, then all of that is for naught because culture isn’t a slogan on the wall, it’s not the campaigns you front. It’s how you behave every day to your colleagues. And this is especially true for senior managers and leaders. You create the culture and you are responsible and accountable for whether or not it’s actually observed in everyday behaviours. And that’s the real paradox of the CBI, which makes this situation all the more difficult.

Isabel Berwick
So in the case of the CBI and other instances I’ve seen, there’s been a lot of talk on social media about “woke washing”, in inverted commas. So that’s essentially the difference between what this organisation is saying in public, its commitments to diversity and inclusion, particularly in the case of the CBI that was very strong on this, and what was actually alleged to be going on. What would you say to listeners about that? I think you call this the say-do gap, don’t you, Ann?

Ann Francke
Bingo Isabel, it’s the say-do gap and this is a classic case of that say-do gap in action and boy look at the repercussions when you know, you get that wrong in a big way. But alas, I would love to say it’s unique to this instance, but it is not. CMI’s research has found that this is very widespread, that the majority of managers will say, of course my organisation is inclusive when it comes to X, you know, gender equity, racial equity, whatever it is. But then you say, OK, so can you tell me one concrete thing you’re doing about it? And suddenly, you know, the percentage of people that say their organisation and inclusive maybe 90 per cent, but less than 25 per cent can name any specific instance of something going on. So, really what our collective responsibility as organisations is, no matter where we’re working and what we’re doing, do our bit to close that say-do gap so that we actually walk our own talk.

Isabel Berwick
Is the answer to take these things out of a specific diversity department or HR and to make them sit with individual managers?

Ann Francke
I completely endorse that. At CMI we believe that it is the responsibility of every competent leader and manager to do exactly that. It’s part of how you lead and manage every day. It is not HR’s job and it’s not the DEI person’s job. It’s your job. How are you behaving? How are you including your team? How are you role modelling good behaviour and how are you dealing swiftly and robustly with bad behaviour?

Isabel Berwick
And looking longer term, you know, more generally, how can leaders start to repair trust when it’s been broken? What would you advise people listening to this to do?

Ann Francke
Well, it isn’t easy. It’s one of the most difficult things to do to restore trust. And it takes time and it takes a lot of effort and concerted effort, and it has to be above all sincere. And, you know, I think it has to start with acknowledging we’ve lost trust, we need to take a very hard look at ourselves. We need to listen and find out what’s really going on. We need to make sure that we, as the leaders of the organisation, are understanding what is the everyday lived experience of the people working in this organisation and others, and how are we going to hold ourselves to account to these values and slogans in our annual report in terms of our everyday behaviour. And in that regard Isabel, I think, you know, we all like to highlight aspects of good behaviour, but the real test of trust is, how do you deal with the bad behaviour? Because that’s what sticks in so many employees’ minds is, you know, how did they let that person or group get away with that? And that is very damaging to trust.

Isabel Berwick
So there’ll be a lot of people listening to this who, you know, might be terrified that there are things going on in their organisations that they don’t know about or that had been hushed up in particular departments. You know, can a well-managed company still suffer a reputational crisis or scandal?

Ann Francke
Well, of course they can. And you know, the thing is one of the characteristics of culture that will help to mitigate this is openness and transparency. And that’s where you create a situation where managers and leaders at every level know that they are not only encouraged but expected to raise things that aren’t right. And in so many organisations there’s a fear that, oh gosh, if I highlight this, it’s going to have bad repercussions for me. My career will suffer. This is why a lot of women do not report, for example, sexual harassment because they feel — and unfortunately they are often right — that nothing will be done about it and then it will somehow boomerang back on to them. And the best thing that you can do if you’re trying to create a culture of trust is to make absolutely clear that that’s not going to happen and that you want people to come to you with the problems, at warts and all, and not just with the good news, and that those problems, if they are serious, will be dealt with swiftly. And that means that you have to deal with toxicity.

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Isabel Berwick
So the takeaways here are that leaders have to walk the talk with regard to ethical behaviour and if you’re making claims about diversity and inclusion and equality, you have to actually perform those within the company. It’s not enough to put them on your website or have your HR department have meetings about them. You know, it doesn’t seem that hard, but apparently it is. Now how do you open up your culture so that people can talk freely? I was particularly taken with the preventive measure that Frances talked about, which is, you know, using technology to help people report misdeeds. Yeah, I think this is gonna really transform things because the culture of whistleblowing is, you know, it’s very hard to bring allegations against your manager. And changing corporate culture can be done. And as Ann said, some leaders will have to leave, but most people want to do the right thing. They might be caught up in an unethical company culture, but they want to do the right thing. And if leaders can show them that way. I think, you know, a lot of these problems could be avoided.

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My thanks to Frances Frei and Ann Francke for this episode. If you’re enjoying the podcast, we’d really appreciate it if you left us a rating and review on Apple Podcasts. And please do get in touch with us. We’re at workingit@ft.com or I’m Isabel Berwick on LinkedIn. If you’re an FT subscriber, please sign up for our Working It newsletter. We’ve got the best workplace and management stories from across the FT. Sign up at ft.com/newsletters. This episode of Working It was produced by Audrey Tinline. The executive producer is Manuela Saragosa with mix from Jake Fielding. Cheryl Brumley is the FT’s head of audio. Thanks for listening.

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