5 strategies for SMEs to combat toxic culture

The supposedly unstoppable basketball team, the LA Lakers, managed to let a whopping 14 out of 17 games slip right through their fingers after a chaotic 2019 season.

How does this relate, you wonder? Well, this reportedly wasn’t because of bad luck – or even a lack of skill.

After an attempted trade of their whole roster (trying to change the entire team) a toxic, dysfunctional leadership & a culture of intimidation, mistrust & bullying was to blame. (Allegedly – we’re not trying to get sued by the Lakers, just highlighting the damage that can be done when leadership & culture are mismatched.)

We know that leadership and culture are closely linked – so for a thriving, supportive culture, leaders will need to be firmly on board and perpetuating the values the organisation wants to have.

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How co-creating culture can transform your SME

How leadership teams shape & influence culture

What is co-creation?

Lizzie Benton's 5 plays to put into action

What is authority bias?

The dangers of authority bias

How co-creating culture can transform your SME

In the latest edition of our People First Culture Series – ‘How co-creating culture can transform your SME’, we’ve gathered essential research findings from surveying 1241 SME employees*, as well as insights from top Company Culture Coach, Lizzie Benton.

The playbook focuses on how to co-create a healthy workplace culture and involve employees in creating their organisational cultures & values - alongside leadership, instead of simply filtering down from the top.

We’ve delved into the importance of co-creating your culture with your team (rather than senior leaders making these decisions alone) and how to keep toxic traits like authority bias at bay.

In this blog, we’ve included a set of Lizzie’s practical plays for SMEs to put into action.

How leadership teams shape & influence culture

We know that leadership directly impacts culture, and how employees feel about their jobs.

In a research study on nurses, the actions of leaders were found to have a measurable effect on morale. There was also a correlating relationship between leadership behaviour & job satisfaction.

Culture filters down from the top, and leaders have the power to create psychological safety amongst employees. Leadership sets the tone for organisational culture – and it’s important that everyone feels their opinion is valued.

It’s no secret that people work best under strong, supportive leadership that trusts team members with the autonomy to make decisions & grow in their roles.

But how can a culture get to that stage – and why is it so important to co-create the key cultural elements of your organisation?

What is co-creation?

Whilst leaders have a strong influence on the culture of their organisation, decisions shouldn’t ever entirely filter down from senior leadership.

According to our latest People First Culture Series research, 51% of SME employees reported not being involved at all in creating their organisation's values. Company Culture Coach, Lizzie Benton, argues that co-creation in organisations is beneficial for everyone – but looking at the data, there’s still a long way to go for SMEs.

“The lack of co-creation around values in SMEs shows that there is an autocratic approach present in how we build and evolve company culture. When the creation of values comes from only the top management, a natural bias exists.

When values are imposed onto people, they quickly become disengaged. They feel like the values are being pushed on them, rather than created with them. People ignore the values, and in worst-case scenarios of the extremely unhappy employees, actively work against them...

When we get to be heard, make a contribution and participate in creation, we are far more likely to feel a sense of connection and ownership, and therefore take responsibility for the things we’ve created.”

Lizzie Benton, Company Culture Coach       

Moving from an organisational model which includes people’s contributions, rather than telling them what to do, is a definite way to engage & motivate your team.

And it’s a win-win – Lizzie also shares how businesses could save time & resources, if they weren’t trying to dictate values, and instead adopted a co-creative approach.

But we know that this is often easier said than done – so Lizzie’s put 5 plays together to help SMEs actively inspire co-creation:

Lizzie’s 5 plays to put into action:

1. To have great ideas, people need information – so start creating greater levels of transparency in your organisation. Begin by simplifying organisational reports and making them accessible to everyone. Opening up information in this way builds trust, and helps people to have the knowledge they need for problem solving. You might begin with a simple quarterly report sharing numbers of sales, or customer service metrics. Make it simple to understand and relevant to your team's work.

   
   

2. Create a clear and open feedback/suggestion process to help people bring their ideas to life. This doesn’t include a suggestion box – that’s a graveyard for creative concepts. A clear feedback process should enable people to pitch their ideas or suggestions and then be able to either implement that idea, or understand why it can’t be implemented at present. Giving people clarity on a suggestion process, and autonomy to see it through themselves creates a greater sense of ownership and connectedness. For example, an individual might share that the reception feels unwelcoming to customers, so they pitch some suggestions on how it could be improved. If the pitch is successful, they are given the responsibility and tools to take action on their ideas.

   
   

3. Ditch any managerial privileges in your company culture. Privileges for senior management, such as designated parking, or special treatment, only creates a greater barrier between top leadership and other employees. Another common example is when leaders restructure teams without consulting with the team first. Whether privileges of power or symbols, the ‘them vs us’ culture is toxic and does nothing to create an inclusive environment where everyone feels valued.

   
   

4. Host a Q&A session with senior management where people can ask them anything. And really this means anything. This demonstration of transparency builds a deeper sense of trust between leaders and teams, and begins to bridge the gap on any power divides.

   
   

5. Switch up how you run meetings. Meetings are a perfect example of how inclusive and participative your company culture truly is. Too often one person dominates the airtime while others have to sit and listen. This isn’t a meeting, it’s a lecture. Try a circle meeting, where everyone in the room has to add something to the conversation before someone else can go. There’s no interrupting while someone is speaking. Even this simple method of conversational turn-taking allows everyone in the room to feel that they can contribute and be heard.

   
   

These are all ways in which SMEs can start thinking about having a truly open culture in which everyone has a say. Thinking more democratically about decisions and feedback, along with paying attention to where those ideas come from can only benefit SMEs.

What is authority bias?

An important aspect of ensuring a positive, healthy culture is being aware of authority bias – and how it can damage businesses.

Authority bias is a social cognitive bias, meaning that people believe those in positions of power know more than those in ‘lesser’ positions, and place too much confidence in what they say - without checking for accuracy.

“In many organisations there is a tendency to overvalue the opinions and ideas of those who hold a higher position or title than others, their power is given more weight than their content. From our research this rings true, as 38% of SME leaders have their new ideas for company culture and/or values listened to more than any other employee.”

Lizzie Benton, Company Culture Coach         

The dangers of authority bias

Authority bias is damaging because it changes the way leaders are perceived and could even lead to a toxic culture, with employees feeling like their voices aren’t important at all.

“The habit of overvaluing ideas from the top leads to many good ideas from others in the organisation being ignored. When this happens in a culture, people stop contributing ideas because they don’t see the point if they’re not going to be listened to. Our research highlighted that this feeling is very much valid, as 31% of SME leadership teams don’t take employees' suggestions or feedback about company culture seriously.”

Lizzie Benton, Company Culture Coach

If you want to keep your people engaged, it’s vital that employees feel listened to, and that they feel they have a voice within the organisation.

Lizzie also mentions the importance of this being a genuine, authentic way to work together - rather than a tick-box exercise for inclusion.

Walk your talk in your SME

Just 27% of SME employees feel their organisation’s values always truly represent the culture, according to our research.

With this in mind, SME leaders should proactively invest in culture-building initiatives for long-term success. Working with your people on areas like value-creating is a way to ensure employee engagement & is likely to support retention rates, too.

Culture is like a living thing within your business – if not continuously nurtured and invested in, it can easily alter, or become toxic.

Find out more about the dangers of authority bias & how to create the culture you want by downloading the latest People First Culture Series research in full & 10 more strategies for co-creating, for free.

*Opinium Research was commissioned to conduct a nationwide online survey of 1241 adults working in UK SMEs. The survey was issued during the 21st – 25th
July 2023. The data in this guide focuses on SMEs with 10-249 employees.