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How a toxic workplace culture can lead to disaster

One senior ANZ trader, who was dismissed following an internal investigation, filed an unfair dismissal claim against the bank claiming that he was forced to behave badly because of the bank’s abysmal corporate culture. (Another trader has also filed a separate suit.) The claim alleges that the bank itself created, supported and encouraged a toxic and unsafe culture that allowed its leaders to send obscene emails, enter strip clubs and tolerate substance abuse.

This is taking place alongside civil penalty proceedings against the ANZ over the alleged manipulation of the bank bill swap rate between 2007 and 2013. ASIC has criticised the bank’s corporate culture, describing it as “poor” and their behaviour “absolutely appalling”.

So the question must be asked: is the culture of an organisation an excuse for poor behaviour and what is the role of leaders in establishing workplace culture?

What is workplace culture?

During February and March, the IML Leadership Outlook Series delivered workshops in 12 locations across Australia to explore leadership and workplace culture. More than 700 people attended these sessions, including 550 IML Members. Presented by Jerome Parisse-Brassens, Asia Pacific director for global culture consultancy Walking the Talk, the workshop examined why leaders shape culture and how they can influence culture change.

Parisse-Brassens described culture as the patterns of behaviour by people and systems that are encouraged, discouraged or tolerated over time. A workplace’s culture is created through unspoken messages that people receive about what is valued in an organisation. If a leader doesn’t discourage substance abuse and tolerates poor behaviour, those around them will follow.

So were the ANZ leaders responsible for setting the culture or were they themselves victims of the culture?

The shadow that leaders cast over their staff is often not realised or recognised by the leaders themselves. However, a leader’s behaviour is critical to establishing and maintaining a workplace culture.

The 3 ways leaders can change culture

Parisse-Brassens described three behaviours that are core leadership qualities for culture change. First, leaders must take responsibility for their own actions. The victim mentality is often seen in workplaces where it’s always “someone else’s fault”. This situation cannot be tolerated. Leaders and managers must understand that they have choices and should be proactive in taking responsibility for their actions. They should also be encouraging those around them to be responsible for their own actions.

Second, a leader must be principled. If it’s perceived that a leader says one thing and does another, this is highly damaging to their credibility. But being a values-led leader, guided by sound principles, encourages others to share those values. The most successful results usually occur when a leader’s personal values align with those of the company.

A leader must be principled. If it’s perceived that a leader says one thing and does another, this is highly damaging to their credibility.

Finally, openness is a leadership quality that fosters positive culture change. It helps an organisation if leaders are humble and curious in their actions. Being an open leader who exhibits learning and listening skills is an essential ingredient in changing workplace culture.

Leaders blaming the culture of an organisation for their own misbehaviour should be seriously questioned. Did they take responsibility for their actions? Was their behaviour principled and values-led? Were they open, humble or curious?

The “culture made me do it” excuse cannot be taken seriously when leaders (by their own standards of behaviour) encourage, discourage or, in worst-case scenarios, tolerate certain behaviours.

It’s the responsibility of all leaders and managers to fix toxic elements in a workplace. No leader can call themselves a leader if they turn a blind eye to a toxic work culture. It’s often said that the standard you walk past is the standard you accept. To the credit of ANZ’s leaders, they did move immediately in an attempt to stamp out these types of behaviours.

No doubt ASIC will be attempting to enforce higher standards in its crackdown on corporate culture. Let the battle begin.

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