‘He’s like smoke. It’s difficult to describe. If I try to address his behavior he always explains it away and I end up feeling confused.’

‘I’ve tried to talk to her. But she gets upset. I’m afraid if I push too hard, she’ll leave and take some of our best people with her.’

These are signs of toxicity.

More specifically, they are signs that one person’s poor behavior is beginning to affect others.

In nature, something is toxic when its presence causes damage to the larger system around it. A toxic employee has a similar effect. Their individual performance may be strong, but their presence causes the team or organization to perform less well.

This distinction matters. Being toxic isn’t primarily about individual performance. It’s about an individual’s impact on the whole team or organization.

I worked with one client who had an executive responsible for nearly a third of the company. He had been there for decades and was viewed as loyal, deeply knowledgeable about the business and, despite some quirks, highly valuable.

Eventually, concerns about culture and turnover brought critical issues to the surface, and the executive was terminated.

Only then did the company begin to understand the depressive effect he had had on the business for years.

Untold millions had been lost. Former employees began reaching out asking if they could come back now that he was gone. Performance in the department improved almost immediately. They also began discovering ways he had stolen from both the company and his employees, including literally taking employee awards and incentives.

He had hurt not just the owners but his entire team. The owners just didn’t see it.

Leaders must deal with toxic employees to protect their teams

Leaders are responsible for protecting and building their teams, organizations and customers.

Toxic employees damage others not only because of their behavior, but because leaders often tolerate it. That tolerance is usually interpreted, accurately, as permission. The leader may not intend to permit the behavior, but failing to address it communicates more than any stated value or policy.

There is no way to avoid the cost. If the leader does not confront the problem, the consequences are simply pushed onto someone else. Co-workers, customers, managers or the organization itself are expected to absorb them.

This is especially difficult when the employee is otherwise valuable, well connected or likely to react badly to confrontation. But avoiding the conversation does not remove the problem. It only changes who pays for it.

What do toxic behaviors look like?

Toxicity can show up in many ways. Common behaviors include:

• Disrespect
• Gossip
• Excluding others from information, decisions or participation
• Chronic negativity
• Blame, minimization or rationalization
• Aggression or anger
• Withholding effort or intentional underperformance
• Manipulation
• Retaliation or threats
• Sabotage

Any of these behaviors can happen occasionally without making someone a toxic employee. People get frustrated, gossip or become defensive.

The issue is chronic patterns and, more importantly, their impact.

When these behaviors begin to consistently damage other people, interfere with normal leadership or reduce the performance of the larger team, the problem is no longer limited to the individual. It has become toxic to the organization.

Why leaders let it continue

Why would a leader allow toxicity to continue?

Often because the most damaging employees are also highly valued employees. They may be very smart, productive, charming or knowledgeable about the business. They may hold important relationships or have years of history with the company.

An underperforming employee who is difficult to work with is relatively easy to address. A high performer with deep roots who is toxic can feel complicated.

Sometimes leaders simply do not see the problem. Toxic employees are often skilled at managing upward. They may be viewed very differently by senior leaders than by the people who work beside or beneath them.

And sometimes leaders see the problem clearly but are afraid of what will happen if they address it. Will the employee quit? Take key people with them? Retaliate? Create a bigger problem?

That fear is what creates the hostage dynamic: normal, appropriate leadership decisions stop happening because leaders begin managing around one employee’s reactions.

The next step is to get honest about what that tolerance is already costing you.

Get honest about the real cost

I worked with a company doing about $50 million in revenue. Its margins routinely hovered around 1-2%. From what I could see, the signs pointed toward this being primarily due to one individual.

Whenever I pushed on this, company executives explained how tough the market was (it isn’t) and the risk of what might happen if they confronted him. Their fear was that he would leave and take his team with him.

My response was, ‘Who cares? What do you have to lose? The whole group is providing you more risk than value.’

That is what it looks like to be taken hostage. From the outside, the costs and signs can be obvious. From the inside, everything seems reasonable and the status quo goes unchallenged.

Toxic employees always incur a cost. That is the definition of toxicity.

The challenge is that the cost is often significant but indirect. There is no line on your financial statement that says, ‘Lost productivity due to toxic employee’ or ‘Additional costs associated with employee turnover.’ Often the cost is better understood as depressed performance. Results should have been better but weren’t.

The signs show up elsewhere: good employees threatening to leave, higher-than-normal turnover, weak financial performance, normal management decisions being delayed, or exceptions continually being made for one individual or team.

Stop evaluating that employee, especially if they are in management, only by what they produce or by what confrontation might cost. Evaluate them by their system-wide impact.

In my experience, when these situations are finally confronted, and often when the individual is removed, the organization experiences a quick lift. Morale and performance improve. Former employees may even begin asking whether they can come back.

Often, the supposed ‘high performance’ also looks different once the person is gone. It often turns out to be more spin than results. Additionally, problems that had been hidden, rationalized or blamed on others become easy to see.

You can work with toxic individuals, confront their behavior and give them opportunities to change. In my experience, most won’t respond or will only respond long enough to get your attention off them. But don’t place a higher priority on their restoration than on protecting your team or customers.

Leadership means protecting the team, even when doing so is uncomfortable. The perceived cost of doing the right thing is rarely as high as the cost you are already incurring by tolerating toxicity.

Take good care,

Christian