The cost of bad leaders

Leaders who act inappropriately or contemptuously toward staff can put their organizations at risk of attrition and litigation.

Less than a decade ago, one of the largest employers in Canada was dragged, kicking and screaming, into the world of diversity.

A senior manager sent what he thought was an innocuous memo referencing “the ghetto boy” in the mailroom who happened to be black. The memo went public and then viral. Within a year, this leading employer was forced to hire a full-time director of diversity. Earning a six-figure salary, the individual was tasked with creating a multi-year diversity strategy that included standardized sensitivity training for every manager in the organization. It was a classic case of a death-bed conversion.

Organizations that tolerate offensive behaviour fall into a common trap, which occurs when individuals reach positions of influence and few employees have the power to tell them about their unacceptable conduct without fear of reprisal. This leads to a continuation and possible escalation of the behaviour, causing employees to either leave the organization or, if forced to stay for monetary or other reasons, mentally quit their jobs.

Correcting obnoxious, inappropriate leadership behaviour doesn’t just rest with managers; organizations bear the responsibility for setting the tone for acceptable conduct in the workplace as well. Some companies think that diversity initiatives alone are enough, but they are not.

For several years our firm has been the measurement partner for Canada’s Best Diversity Employers, a competition handled by employment publisher Mediacorp and The Globe and Mail that recognizes Canadian employers with above-average workplace diversity and inclusiveness programs. In this role we have seen hundreds of initiatives organizations use to try to improve the diversity in their workplaces: everything from serving curry lunches in the cafeteria to creating employee resource groups to improving policies on outreach and selection. In several cases, however, the behaviour of leaders was virtually ignored.

In one case, a very senior leader was known for making sarcastic jokes that were often based on outdated gender, racial and socioeconomic stereotypes. This leader often bragged about his weekend at his million-dollar cottage or ski chalet and could not help but add some put-downs about affordability to his staff, who often left meetings publicly shamed. Another senior leader, who was known for his public pronouncements about corporate integrity, frequently turned the other way as the rules were stretched on his favourite staff members’ expense accounts.

A while back I learned about Stanford professor Robert Sutton’s bestselling book The No A**hole Rule, in which he describes a group of leaders in the workplace known as “boss-holes.” These managers routinely leave others feeling demeaned, disrespected and demotivated. They show a consistent pattern of contempt for those with less status and power; often, you can calculate to the penny the hard and soft costs of their behaviour. These costs are caused by preventable attrition, wasted training dollars for those high performers who prematurely leave and, of course, avoidable legal litigation.

In my experience, the most effective diversity and inclusion initiative available is identifying the most offensive leaders — such as those I saw while conducting measurements for the diversity employers competition — and helping them move out of their incompetence in the way they treat people. As the old adage, which has been attributed to Ralph Waldo Emerson, goes, “What you do speaks so loud, I cannot hear what you are saying.”