How Toxic Employees Damage Your Business

“Oh, we’d never let a toxic employee anywhere near customers.” You betcha, you wouldn’t. Then why does almost every company have toxic, customer-facing employees acting out, sometimes in horrifically damaging ways?

One big reason—these bad actors are often foxy enough to explode “down” with people who can’t fight back, or “out” at customers who are much more likely to take their business elsewhere than complain. Most of this stuff happens out of management’s sight, so often it continues unabated and uncorrected.

What’s the impact of not addressing toxic behavior?

The financial impact of toxic employees far exceeds most of our expectations. Two “workplace anthropologists,” Christine Porath, Ph.D. and Christine Pearson, Ph.D., have been studying toxic workplace behavior for eight years. While their book describing study outcomes, The Cost of Bad Behavior: How Incivility is Damaging Your Business and What to Do About It, is not scheduled for release for several months, I do have some of their data, including one key dataset that singed my eyebrows.

Here’s how over two thousand employees surveyed reported their reactions to being victims of toxic behavior:

Many of these effects take time to wear off, even without repeat instances, which is rare because most toxic behavior is repetitive by nature. Further, many “toxic incidents” affect multiple people, sometimes entire departments. The sum total of lost or less effective work is stunning.

The book will tie out the above data to dollars lost, but just by themselves, these are alarming numbers.

Toxic behavior occurs all across the front lines

Based on our experience designing process for both front and back office environments, employee toxicity often skews towards the front office. And if we omit IT from the back office, it almost always skews towards the front office.

Sales: You’ve probably experienced salespeople going ballistic on you when you tell them they’re not getting the deal. At my age, I’ve been verbally assaulted many a time. Just recently an auto industry software rep called me “a fool” (no comments from the peanut gallery, please) along with a slew of other unpleasant invectives when told I’d advised our client to select an alternative CRM solution, which they did. I relayed this bloke’s sentiments to our client sponsor, a very plugged in fellow who very routinely checks in with counterparts at other dealer networks across the country. Don’t think this vendor didn’t get “checked out” of some future deals, which tend to be very large deals.

Speaking of retail automotive, how many of you have taken abuse from a sales guy angry you’ve selected another car? Some of these folks follow you right out to your car if you don’t buy, dissing your decision the whole way. Or they call you incessantly until you finally give up, pick up, and give them the bad word, at which point some go on rants as if you’ve taken the bread right out of their children’s mouths.

Thankfully, this stuff is on the decline as auto dealers are making concerted efforts to clean up their acts customer-wise.

Now here’s one for you. Kevin Stirtz’s weekly “Amazing Service Tips” just hit my inbox (Kevin’s a frequent blogger on this site). In peaceful, almost idyllic Eau Claire, Wisconsin, a man tried to return a purchase to a Radio Shack store. When the store clerk refused to take it back, the customer asked to speak to the manager. At which point the clerk reared back and cold-cocked the customer. Well, almost. Another customer had to call 911 for reinforcements. Guess this clerk blew his cover, eh?

Service: Ever have contact center reps blame you when they can’t solve your problem with their product? If not, you ain’t been callin’ enough software companies. In my experience, Intuit reps are the most prone to go off on people. Because no one has trained their offshore reps in basic bookkeeping, they don’t have a clue what you need to do. So some reps get very irritated and offended—not to mention sometimes ugly—when you don’t accept their proposed workarounds.

Hey, my wife got blasted the other day. A bank made a processing error on our account (in guess whose favor?). So she called customer service to straighten it out. The first rep started off denying basic processing rules before getting really rude, to the point where my much-more-patient-than-me wife stopped the conversation and demanded to speak to a supervisor. Yes, the bank had made an error. Considering the supervisor’s diametrically opposed demeanor, bet the first rep had an even worse day after that. She too blew her cover.

As long as we’re on financial services, a credit card transaction processer recently charged me twice for the same internet order. Not wanting to dance the “credit card two-step” for months getting the issuer to reverse the charges, I called the processor’s 800# listed on my statement. The woman I reached (offshore again) tried telling me I must have made two purchases because their system couldn’t possibly make such an error. When I said otherwise (and I’m always so nice over the phone), she started screaming at me. The expletives may have been deleted, but I could hear them anyway. When I wouldn’t back down, she finally said “I have to go talk to someone,” then left me on hold for five minutes. When she finally returned, she spit out something like, “We’ll cancel the second charge.”

Not one to walk away, I called the seller and reported what happened. The reception I received indicated this wasn’t the first reported abuse. In fact, rarely are these incidents one-time eruptions. And worse yet, when one person starts going off on customers, others may think it’s permissible and join in. It’s that culture thing. Once a negative tone gets set, it tends to drag down everyone’s performance.

Hey, contact centers get fired for toxic calls. I know because we’ve had several outsource contact center clients. The good ones take even a single incident very seriously, because every reported incident tends to shorten the term of the relationship.

Marketing: Don’t think for a minute marketing toxicity can’t seep out to the customer level. In a previous lifetime I was CEO of a good-sized marketing agency, which meant managing a creative staff; and account managers who fought with creative; and production managers who fought with account managers; and traffic managers who fought with production. Nature of the beasts who work in agencies: Volatile people, including some narcissistic and feeling entitled to dump on anyone or anything in their way. Hey, larger agencies are viper pits, and the work they create that reaches customers can reflect that.

If you stop and think for a bit, you can probably recall promotional campaigns disrespectful to the very people they targeted. And they weren’t all targeting seniors. One emblazoned in my mind came from an agency known for winning awards first, second and third— but screw the client and the customer. The client was Holiday Inn, which tends to have blue collar customers and what agencies then termed “no collar” (between white and blue) guests. So for this audience, the agency created a Super Bowl ad featuring famed transvestite Rue Paul. What did they expect customer reaction to be? Do you want to go to sleep at a Holiday Inn fearing Rue Paul is about to knock on your door?

The agency didn’t care. And Holiday Inn fired them that week (along with, I assume, the internal people who approved this farce). But at least the ad ran so they could enter it in awards shows.

Disrespect for anyone but yourself (alias, narcissism) is among the most common toxic behaviors. And it’s a common condition in the agency world.

But let’s not omit corporate marketers (many of whom come from agencies). Classic, toxic behavior occurs with unfortunate frequency in B2B marketing functions–but, and this is a critical distinction, most of it directed inward, not at customers. Marketing generates sales inquiries. Marketing ships raw inquiries straight to sales. Then marketing calculates cost-per-inquiry, pats itself on the back for a job well done, and walks away.

Now, marketing knows good and well that sales will throw away nearly all of these inquiries, because most are from “tire kickers” with no intent to buy. But not following them up is sales’ fault, because sales is “too lazy” to pick up the phone and qualify. Hey, have you ever tried to sell and qualify at the same time? I did, decades ago, until I started flushing every inquiry I received from marketing in self-defense.

Disrespect again. But are marketing people, whether agency or in-house, inherently narcissistic? No. But poorly designed work process encourages this behavior. And lead-generation programs exhibit some of the worst processes know to business.

To draw a big circle around all three front office functions, toxic behavior occurs with more than sufficient frequency to cost companies dearly.

Dealing with workplace toxicity

When it comes to dealing with workplace toxicity, Porath and Pearson preach “zero tolerance.” They recommend focusing almost entirely on the toxic employee, offering coaching followed by immediate termination if coaching doesn’t work. And that feels correct at first blush because we’re predisposed to believe that toxic behavior comes from naturally toxic people who need detoxification.

But in most cases of toxic behavior in the workplace, that’s untrue. In our experience, most toxic employees are “made” toxic by poorly designed work that creates friction and conflicting goals between people and/or functions. A great example is the dysfunctional relationship between sales and marketing on lead-generation programs, which often creates mutual scorn and disdain.

Most toxic workers are “made,” not born.

No doubt, “made” toxic behavior is a magnification of “rough edges” inherent to affected employees. However, the stimulus creating “made” toxic behaviors comes from outside, not inside (although the Radio Shack slugger sure does appear to have been internally motivated).

Agreed, some toxic employees have psychological problems such as anger management, narcissism, delusions of grandeur, abusive behavior patterns, bi-polar disorder and very unfortunately, but with increasing frequency, PTSD in the U.S.—all of which can require termination of employment as part of risk management.

But not all toxic employees walk in the door that way. Not even a majority of them. Hence, when dealing with toxic behavior we absolutely must look for bad process rather than immediately assigning all the blame to individuals.

Toxic employees already cost companies gobs of money. No sense losing even more by firing the symptom rather than the cause.