There is a growing incidence of toxic leadership in organisations across the world. This is clear from anecdotal evidence as well as research which suggests that one out of every five leaders is toxic. My own research shows that closer to three out of every ten leaders are toxic.

This cancer of toxicity threatens the well being of both individuals and organisations. It also affects the performance of a society and country. That’s why there is a pressing need for leaders to understand the nature, dynamics and evolution of toxic leadership and organisations.

The word “toxic” comes from the Greek “toxikon” which means “arrow poison”. In a literal sense, the term in its original form thus means to kill (poison) in a targeted way (arrow). Toxic organisations and leaders therefore are those who deliberately destroy the fabric of the institution.

What makes a toxic leader?

Toxic leadership represents the “dark” side of leadership. It affects individuals as well as organisations.

In the case of individuals toxic leadership refers to ongoing, deliberate, intentional actions – the “arrow” – by a leader to undermine the sense of dignity, self-worth and efficacy of an individual – the “poison”. This results in exploitative, destructive, devaluing and demeaning work experiences. These destructive actions may be physical, psychosocial or even spiritual when they diminish a person’s meaning and purpose.

A toxic organisation is one that erodes, disables and destroys the physiological, psychosocial and spiritual well being of the people who work in it in permanent and deliberate ways. In other words, an organisation becomes metaphorically a “poison pill” for employees.

Workplace bullying is similar to toxic leadership, but is just one form of it. Bullying is more centred on individual, one-on-one, physical or emotional abuse by any one individual, including a leader, on another person.

In contrast to toxic leadership, healthy, authentic leadership nurtures and affirms the dignity, worth and efficacy of an individual. It creates enabling, empowering and meaningful work experiences.

And a healthy, authentic organisation is one that nurtures and grows the physiological, psychosocial and spiritual well being of its organisational members.

Can toxic leaders be competent?

Leadership toxicity and incompetence are not directly related. Both competent – getting the desired results – and incompetent leadership can be toxic.

If a narrower definition of competence is used – only focusing on technical and professional competencies – a toxic leader may still be seen as competent because they are “delivering the goods”. This is particularly true if a short term view is taken. But over the longer term their short term success is unsustainable. This is because they are destroying their teams, departments or organisations in the process.

If a comprehensive, long term view is taken toxic leaders are incompetent because they are not competent across all domains of a well-rounded leader. Taking a comprehensive view, leadership qualities include personal attributes, technical and professional competencies, values and attitudes, and conduct.

I believe that toxic leaders, regardless of their level of technical and professional competence, are incompetent. After all, competent leadership is all about getting things done with people.

Typical toxic leaders

Five typical toxic leaders exist:

• The Cold Fish: the ends justifies the means. So any decision and action is justifiable in terms of the results desired.
• The Snake: the world serves me in the endeavour to satisfy my personal needs like greed, status and power.
• Glory Seeker: personal glory and public visibility at any cost, regardless of whether I have made any real and meaningful contribution.
• Puppet Master: absolute, centralised control over everything and anyone, under all circumstances.
• Monarch: ruling the organisation as if it is my kingdom. All of its assets are available for my personal use.

The more prolific these toxic leaders are in an organisation, the more toxic the organisation. The table below profiles these toxic leaders.

Typical toxic organisations

The typical manifestations of a toxic organisation resulting from toxic leadership are:

• Negative emotional moods and mood swings: anger, despair, despondency, frustration, pessimism and aggression.
• Unproductive and meaningless work.
• Destructive and counterproductive conduct.
• Employee physical and emotional disengagement and withdrawal such as absenteeism, lack of contribution, and turnover.
• Unethical, deviant conduct: theft, fraud and sabotage.
• Poor well-being and health.
• Low (team) morale and work satisfaction.
• Organisational dis-identification and low organisational commitment.
• General life dissatisfaction.

But organisations can be toxic in their own right through the organisational culture they have. Organisational culture refers to shared ways of seeing, interpreting and acting upon the world that becomes ingrained in an organisation’s DNA. It’s the glue holding it together and provides an organisation with a way of looking at and relating to the world.

When toxic patterns become ingrained into the DNA of an organisation the following patterns emerge:

• Paranoid: the defensive, afraid, suspicious, trusting no-one or nobody organisation.
• Compulsive: the over-planned and over-programmed organisation.
• Hyperactive: the impulsive, unfocused organisation, acting like an adolescent.
• Deflated: the energyless, depressed and impotent organisation.
• Delusional: the reality estranged, make-believe organisation, living in a world of its own.
• Conscienceless: the unethical, amoral organisation.

There appears to be a growing incidence of the cancer of toxic leadership and organisations. This is in no uncertain terms endangering the well being of organisational members, compromising future sustainable organisational, community and societal performance and success, as well as the very continued existence of them.

This article is based on a longer, more comprehensive academic paper.

Theo Veldsman, Professor and Head, Department of Industrial Psychology and People Management, University of Johannesburg

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Has capitalism taken us over the cliff? And why can’t we stop?

Marjorie Kelly‘s most recent book, Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises is one of the most important explanations of how wealth and power have created an unlivable world and sacrificed the future for the greed of a few.

Why aren’t the SDGs working? Why can’t our politicians do the right thing?

The first answer: wealth supremacy.

Wealth supremacy is defined as the cultural and political processes and attitudes by which persons of wealth accumulate and maintain prestige, privileges, and power that others lack.

The impact of wealth supremacy is everywhere.  Kelly explains:

It’s about status, in a culture where the wealthy are revered as the possessors of godlike powers. It’s about influence, including the power to control philanthropy. It’s about political and legal power-including the power to finance candidates, to influence lawmaking through lobbying, and to escape the justice system that ensnares those without wealth.

(And, in case you were wondering, Kelly shows us the link between wealth supremacy and white supremacy).

The second answer: capital bias.

Capital bias is defined as the idea of making as much money as possible, which primarily benefits those who are already wealthy.

Kelly explains that this bias is present in the systems and institutions that allow money to wield significant influence. Capital represents the active side of wealth. It’s the money that’s expected to keep growing endlessly. Capital is what drives wealth, and it does this through various means like making profits, setting the rules of accounting, and blurring the line between speculation and investment.

When you put wealth supremacy and capital bias together, you have the “DNA of our capital-centric economic system.” These intertwined biases shape how the system operates, grows, and sustains itself. The goal is to keep the rich at the top, safe and comfortable, and capital bias is the way they achieve this. Capital bias is the essence of the system, and this system is what we call capitalism.

The Root Cause of the Polycrisis

Kelly shows us that systemic wealth extraction has become “the deep force sapping the resilience of our society, driving, exacerbating, or profiting from the largest crises of our day.”

The interconnected world of systemic risks–climate change, biodiversity loss, deepening inequality, and rising authoritarianism are converging into what’s being called a polycrisis.  Kelly explains that while ecological overshoot is one root cause of the polycrisis, equally implicated is financial overshoot: the accumulation of too much financial wealth, even as the system remains intent on a limitless more. US financial assets are five times the size of GDP, a ballooning since the 1950s, when assets and GDP were roughly equal in size.

Kelly spells out the connections:

The long rise of irresponsible consumption has been driven by the corporate drive to maximize profits. Our efforts to tackle climate change have been blocked by the misdirection of fossil fuel companies and the capture of politics by monied interests.

As a global food crisis has unfolded, corporations have been out there using inflation to hide outsized price increases.? The white working class, left adrift by the loss of good jobs, finds its anger misdirected into racial and misogynistic hatred by the conservative forces determined to retain or reinstate the social order governed by wealth, by men, by whites.

Many of us don’t fully grasp how the complex, obscure, mathematical rules and norms of our extractive system lie behind these crises. It’s rarely explained to us how expanding pools of great wealth create and rely upon the precarity and indebtedness of the rest of us. Instead, our culture tends to view “wealth creation” as benign and wonderful. This bias toward wealth makes it difficult for us to digest the warnings of economists that the world is awash in far too much financial capital, just as the atmosphere is awash in too much carbon.

Naming the Disease that Ails Us

Kelly’s expose shows us the way out: the first step must be to name the disease, to in see how wealth supremacy lies at the very core of our economic system, and our mental map of reality itself.  The narratives we are taught perpetuate wealth supremacy – Kelly calls theme the myths of wealth supremacy.

The relentless financialization of everything leads to the decimation of workers, as capital drives labor income – and labor itself–out of the economy. She adds: Even more frightening is how the hard right, fueled by plutocratic dark money, now seeks to eradicate democracy in its quest to keep powering the machine that supports … the “unseen ruling class.”

The 7 Myths of Wealth Supremacy

Kelly maps out the seven myths of wealth supremacy—the bias that institutionalizes infinite extraction of wealth by and for the wealthy and is the hidden force behind the polycrisis:

1. The Myth of Maximizing—No amount of wealth is ever enough.
2. The Myth of Fiduciary Duty—Corporate managers’ most sacred duty is to expand capital.
3. The Myth of Corporate Governance—Corporate membership must be reserved for capital alone.
4. The Myth of the Income Statement—Income to capital must always be increased, while income to labor must always be decreased.
5. The Myth of Materiality—Profit—that is, material gain-alone is real, while social and environmental damages are not.
6. The Myth of Takings—The first duty of government must be the protection of private property.
7. The Myth of the Free Market—There should be no limits on the sphere of influence of corporations and capital.

Kelly’s explanation of how these myths block us from doing the right thing for the future is a tremendous contribution to the growing debate around regeneration, and a regenerative economy.  Kelly and Ted Howard defined the democratic economy in their book The Making of a Democratic Economy:

A democratic economy is an economy of the people, by the people, and for the people. It’s an economy that, in its fundamental design, aims to meet the essential needs of all of us, balance human consumption with the regenerative capacity of the earth, respond to the voices and concerns of regular people, and share prosperity without regard to race, gender, national origin, or wealth. At the core of a democratic economy is the Common Good, in keeping with the founding aims of democracy in politics.

The Steps towards a Democratic Economy

SO what must be done?  Kelly offers a blueprint for the shift we need:

1. Breaking the Trance: We Participate in System Change
   When We Change Our Minds
2. Pranks, New Naming, and Other Subversive Acts: Helping Others to Awaken
3. The Democratic Economy: Imagining Its Design, Seeing Its Models Demonstrated
4. Democratizing Finance: Pathways Toward a Next System of Capital
5. Beginning Where You Live: Building Community Wealth

Each of these steps is explored in detail in her magnificent book!

I’m especially struck by Kelly’s clear explanation of the differing visions we see in the politics of our time, not just in the US.  Here’s Kelly again:

“In the economic world envisioned by neoliberals, the rights-bearing citizens are corporations and investors. Democracy is about protecting human rights and the rights of nature.”

Which one do you choose?

Repurposing the Corporation

In our book on regeneration, we argue that the corporation is obsolete. Kelly agrees. Here’s her take on what needs to happen:

The challenge is to envision, and create, private enterprises and investing processes that remove capital bias. Enterprises may still be profit making; that’s an imperative of staying in business. What is dangerous, … is the unfettered aim of profit maximizing.

There’s much, much more.  We’re running out of time, and Kelly’s timely book is a force for the change we so desperately need.

About Marjorie Kelly

Marjorie Kelly is a Distinguished Senior Fellow with The Democracy Collaborative and has authored several books before this one, including The Making of a Democratic Economy with Ted Howard, Owning Our Future: The Emerging Ownership Revolution, and The Divine Right of Capital: Dethroning the Corporate Aristocracy

Kelly argues instead for the democratization of ownership: public ownership of vital services, worker-owned businesses, and more. And she sketches the outlines of a nonextractive capitalism that would be subordinate to the public interest. This is an ambitious reimagining of the very foundations of our economy and society.

Kelly and her colleagues at The Democracy Collaborative played a pivotal role in advising and designing the launch of the Fund for Employee Ownership, now hosted at the Evergreen Cooperatives in Cleveland. Originally consisting of a network of three worker-owned firms, the fund has expanded to include four new firms through conversions. Additionally, Kelly co-authored research on the role of capital in scaling up employee ownership and conducted research and convening on the model of 50 employee-owned firms that are also B Corporations, which she terms “next-generation enterprises.” Jay Coen Gilbert credits Kelly with inspiring the creation of the B Movement of B Corporations through her book “The Divine Right of Capital.” Prior to her current role, she served as a Fellow at the Tellus Institute and co-founded and served as president of Business Ethics magazine.

GET the BOOK >> Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises

Christian Sarkar is the co-author (with Philip Kotler and Enrico Foglia) of REGENERATION: The Future of Community in a Permacrisis World – IDEA BITE PRESS (May, 2023)

In yet another instance of disaster capitalism, private equity companies like Blackstone have found two ways to profit from the climate emergency: first by investing in fossil fuel infrastructure and then by buying up restoration companies that clean up after increasingly extreme weather events.

That’s one of the main takeaways from a report released Thursday by the Private Equity Stakeholder Project (PESP) and Resilience Force titled Private Equity Profits From Disaster at the Expense of Workers, Communities, and Climate.

“Firms like Blackstone should be ashamed of this sinister investment strategy that contributes to catastrophe and rebuilds after it strikes,” report co-author and PESP research coordinator Azani Creeks told Common Dreams.

“The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States.”

The report documents a shift that took place in the disaster recovery industry following Hurricane Katrina in 2005. Before that historic storm, cleanup work in a given area was usually done by smaller local companies.

“After the massive efforts required post-Hurricane Katrina and the increasing frequency and magnitude of climate disasters, private equity firms saw an opportunity to consolidate the market by buying up smaller companies,” Creeks wrote in the report.

And the trend continues. Private equity firms bought 72 restoration companies between January 2020 and June 2023, with the number of purchases rising each year. They acquired 13 in 2020, 20 in 2021, 25 in 2022, and 14 during just the first six months of 2023. If that pace continues through the end of the year, the 2023 total will rise to 28, more than double the yearly purchases three years ago.

The report includes a list of 14 major disaster relief companies owned by private equity firms, five of which also invest in fossil fuels. For example, Blackstone, which owns ServPro, also bought Ohio’s General James Gavin Power Plant—one of the leading single sources of coal pollution in the U.S.— in 2017.In another example, Louisiana-based disaster relief company the Lemoine Company also manages Lemoine Pipeline Services. The company is owned by the private equity firm Bernhard Capital Partners.

This profit-making strategy has major environmental justice implications.

“The investments Blackstone has made in both ServPro and its fossil fuel companies have long-term consequences that are borne primarily by already marginalized communities in the United States,” Creeks told Common Dreams, adding that ServPro often hires immigrants and people of color who are vulnerable to unfair and unsafe labor practices like wage theft.

“Furthermore,” Creek added, “Blackstone’s financing of fossil fuel assets also inflicts direct harm on these same communities, who bear the brunt of toxic emissions and climate disasters.”

Even if private equity firms aren’t funding fossil fuels, their acquisition of restoration companies still means they have a responsibility to workers and communities, the report argues.

As disaster restoration companies have consolidated and gone national, they have organized themselves in a series of franchises and subcontractors. Of the 72 companies acquired in the last three years, more than 80% of them were instances of larger companies buying up smaller ones. These often-opaque corporate structures can make it difficult for workers to challenge their employers over issues like wage theft or unsafe working conditions. Undocumented workers are especially vulnerable, because any complaint may be met with a threat to contact immigration authorities.

“Though issues with wage theft and worker health and safety have long existed in the construction and disaster restoration industries, with an investment from the world’s largest asset manager, you would expect to see these issues less frequently as more resources can be implemented to protect workers,” Creek said. “Instead, the problems at ServPro and other private equity-owned disaster restoration companies persist, with even less mechanisms for accountability and public scrutiny than before.”

One worker named Joél Salazar, who is also an organizer with Resilience Force, shared his experience ServPro subcontractor Royal Services. He said the company offered to pay his way from Florida to Colorado in early 2022 to help with wildfire recovery there, and promised him 40-hour workweeks and weekly paychecks when he arrived. But the travel costs never materialized, weeks started out closer to 20 hours, and the pay ended up being every other week instead.

“The company is stealing from me.”

What’s more, the payment was made via a Visa card. When Salazar said he had to return to Florida, the company canceled his card despite the fact that a significant amount of his earnings were still on it.

“The company is stealing from me,” he said in the report.

Salazar said he wanted private equity firms and investors to be aware of what their companies were doing.

“Investors, I’m calling to ask you to consider worker safety at the companies you invest in, especially the private equity firms you rely on for profits,” he said.

Another problem is unsafe working conditions. Companies owned by private equity firms racked up a total of 194 federal Occupational Safety and Health Administration violations between January 2015 and January 2022. The most common violations were exposing workers to asbestos and failing to provide them with respiratory protection, followed by failing to communicate dangers and protect workers from falls.

Recovery workers are organizing to protect themselves through the group Resilience Force, which says it is “building a strong, stable, inclusive, million-strong workforce that will be able to perform year-round climate preparation and adaptation work, as well as rebuild after disasters.”

The group’s founder and director Saket Soni said in the new report, “We must ensure that these companies, and their private equity backers who profit from disaster, pay and protect the resilience workers who are essential to helping communities adapt and recover.”

What’s better for workers will be better for the communities they help, as well. The report found that the private equity-owned firms engage in price gouging. For example, a ServPro franchise settled with the state of North Carolina for overcharging residents following Hurricane Florence.

The report highlights the legislative efforts of U.S. Rep. Pramilla Jayapal (D-Wash.), whose Climate Resilience Workforce Act would fund jobs and training through grants and make workers less vulnerable by providing a pathway to citizenship for immigrant workers and banning employers from asking about criminal history.

“The innovative Climate Resilience Workforce Act responds to the worsening climate crisis at the scale necessary by investing in a skilled workforce that is capable of not only responding to but preparing for the destructive impacts of climate change,” Jayapal said when the bill was introduced in 2022. “As we create millions of good-paying, union jobs and center the very communities who are disproportionately impacted, we are finally building back better, greener, and stronger.”

The report also issues recommendations to private equity firms to better protect the workers at the companies they own, such as setting up complaint lines, minimizing the use of subcontractors, funding programs to monitor their companies, and allowing their workers to unionize.

Finally, Creeks noted that firms like Blackstone manage public pensions, and have a responsibility to these workers as well.

“Public employees, such as teachers, nurses, and firefighters, have a right to know that their pension dollars are being used to purchase fossil fuel plants that are contributing to climate disasters all over the country,” Creeks told Common Dreams. “In turn, their retirement capital is also being used to buy companies that profit off of these very disasters.”

Olivia Rosane is a staff writer for Common Dreams. This article is republished under Creative Commons (CC BY-NC-ND 3.0). Image from The Visual Capitalist.