7 Signs Your Culture Is Dysfunctional

Here's how to know when your business is going in the wrong directions.
May 24, 2012

In times of stress and change, the business world is not an easy place to be. There are the usual challenges of longer hours and heavier workloads. However, when your culture is dysfunctional, your organization will not last long. Whether you're a concerned leader, an owner or an employee who’s questioning your own judgment, here are seven signs to watch out for. 

1. Your internal competition is worse than your external competition. Although some competition is healthy, teams that constantly fight with one another over executive support and resources impede progress. A culture in which employees criticize and belittle those in other groups, or target one department as the source of all angst (“You have to work with finance on that? I’m so sorry!”) is also disastrous for morale.

2. Management refuses to change with the times. Organizations that have been in business a long time are often guilty of doing things a certain way because that’s the way they’ve always been done. Even though Darwin said that we must adapt or die, some leaders won’t take off their blinders long enough to read, listen and recognize obvious and sensible solutions.

3. You’ve lost 20 percent of your workforce to voluntary turnover, and you haven’t replaced anyone. Having this many people departing for greener pastures in a job market that still isn’t that strong says something negative, but if the business isn’t replenishing any of this labor, it’s a big warning signal. It means that things are so chaotic that managers can’t proceed with the hiring program and/or they don’t care that each employee is doing the work of three.

4. The “stories from the trenches” are legendary. No happy hour shall pass without rehashing the CEO’s epic blowup at last month’s user conference or the time one department didn’t go home or sleep for two days in order to meet a last-minute deadline. If these are the type of anecdotes circulating around your organization, it’s time to create some positive buzz.

5. Direction from the top is the flavor of the week. Strategy is always changing based on the latest management or culture fad, and occasionally, because one person thinks it’s a good idea, management decides to “change things up a bit” and play fast and loose with the organizational structure. Given that reorganizations cause mass confusion and diminished productivity, they should be reserved for only the most essential circumstances.

6. Bureaucracy reigns supreme. Efficient processes and procedures are necessary in a well-run organization. But if your approval cycles are too long, involve too many or too few people or are always changing, you may need to rethink them. Similarly, if your groups are always revisiting the same conversations and reporting the same information in a different format, your culture is bound to feel counterproductive and stifling.

7. Innovation isn’t really valued. I’ve seen this in so many companies. Organizations like to think they appreciate creative and entrepreneurial thinking, but their actions suggest that they’d be much happier if employees stayed in their little boxes and did their jobs without complaint. When the values you tout publicly don’t match up with what you reward internally, your culture isn’t going to be a very pleasant place to work.

If your business has a dysfunctional culture, fear not. The first step in resolving any problem is to recognize that one exists. Check out the recent Culture Beat column on fostering a strong culture for tips on getting started.

Alexandra Levit is a former nationally-syndicated business and workplace columnist for The Wall Street Journal and the author of Blind Spots: The 10 Business Myths You Can’t Afford to Believe on Your New Path to SuccessMoney magazine’s Online Career Expert of the Year, she regularly speaks at organizations and conferences on issues facing modern employees.

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