Transforming Toxic Leaders

Making the Impossible Possible in Troubled Organizations

Corporate Cancer

Failure to diagnose.

Corporate Cancer: Failure to Diagnose

By Dr. Alan Goldman

There is an epidemic that attacks business. But corporations and investors are ill equipped and in denial. Organizations suffer from cancers of deceit, greed, embezzlement, incivility, and malignant quests for power. Fortune 500s are not immune. Kenneth Lay, Al “Chainsaw Dunlap,” Leo D. Kozlowski, Jack Welch, and Bernie Madoff are a few of the more notorious leaders who can be diagnosed as cancerous tumors penetrating executive suites and metastasizing throughout entire organizations, laundry lists of clients, and global supply chains. Their poisonous behavior triggered suicides, bankrupt clients, shell shocked joint ventures, devoured and destroyed marriages and careers, and ate into the portfolios of the likes of IBM, Sunbeam, Tyco, General Electric and Yeshiva University.

While these cancerous leaders were aggressively destructive and progressively toxic they were also slow to be diagnosed. Why? Subordinates are careful not to rock the boat and single out their superiors as the source of bad. An abusive boss is the target of extreme gossip but she does not get written up. Why risk speaking up? Organizations can also be quite ignorant of the bad behavior in their midst. Otherwise brilliant engineers and CFOs grow dumb, dumber, dumbest when it comes down to unraveling the sources of companywide, corporate nastiness and failure. The psychological side of the workplace makes for mountains of conjecture and a basic cluelessness. If there is a questionable leader or a borderline lunatic in the executive suite just leave him be.

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As described in my recent book for Stanford University Press, Transforming Toxic Leaders, many colleagues will do anything they can not to single out their leaders. They hear horrid language spewed out by a manager and witness how it metastasizes across a department and a division. Employees are demoralized, angry, trivialized and productivity drastically drops off. Negative words and emotions spread. Poison seeps in and demotivates and demoralizes. But the devoted and lazy protect their leaders and are ingenious at pointing in seventeen other directions. Is the leader at the source of a companywide cancer located at the center of a diseased organization? The roots of a company’s malaise and sickness elude even the keenest minds of the time. Who is at the source of all the incivility? Where does the cancer originate? Does it metastasise into lethal gossip, delayed shipments, botched heart surgeries, and failure to promptly contact patients and customers for collections? Why isn’t a leader singled out? Is this a gutless organization? How many wimps can coexist under one brand? Or is there no one qualified within the boundaries of the organization to make an assessment? A diagnosis?

Subordinates, underlings and a leader’s circle of true believers may rally to protect a toxic boss from a potentially damaging diagnosis. Some do their best to keep the snoopers away from the inner circle—they don’t want to exposure to the true facts. Fictions must be carefully crafted and doled out to the media. Corporate Cancer thrives where there is ignorance and failure to diagnose. Key company players took the position that they were quite confident that Kenneth, Al, Leo and Jack certainly weren’t at the eye of any corporate storm. And Bernie was just a free radical—playing his clever investment games. But in retrospect—were members of the various Rat Packs stupid, on board, or just plain duped? Enticed by promises and the smell of stacks of cash it is easy to assume that those around the cancerous bosses and operators in question were mesmerized by talk of illicit riches and grandiose scams. Could such heavy weight presidents and CEOs, mega achievers and heroes - be at the nexus of corporate melanomas emanating from the board room to every player, customer and supplier?

What do the protectors of the cancerous leader say? Surely dark, wildly unethical behavior at the top of the organizational chart is a very long shot. Not probable. Are these coworkers in denial? Yes, they very well may be. Organizations develop excuses and ingeniously warped interpretations of why the bad behavior in front of them is not bad behavior. A rotten, darkly principled leader is not so bad. A corporate cancer is demoted to the flu. The ranting and ravings of an executive with an intermittent explosive disorder is explained away as “having a bad day” or she “got a little bent out of shape.” This phenomenon is further addressed in my book for Cambridge University Press, Destructive Leaders and Dysfunctional Organizations: A Therapeutic Approach.”

Constrained by a failure to diagnose—organizations are slow to detect the obvious and are largely limited to a witnessing of the external corporate symptoms of the leader’s cancer: a failure to make payroll; falling behind on collecting accounts receivable; and a companywide edict that furloughs would be implemented. Tumors of cynicism and angry despair can take grip. After much suffering and a laundry list of symptoms the obvious can finally seep into sight. It finally occurs that something is sick at the company’s core. Whispers of embezzlement and graft, gossip of an ensuing monstrous downsizing and a trickling of escalating grievances formally filed against leadership finally grabs some attention. What is up with the CEO? Could a Fortune 500 organization fall prey to a cancer emanating from leadership that eroded motivation, commitment, team work, quality and loyalty? Will this talk go public or stay private and privileged behind closed doors? It’s your call.

Transforming the toxic leader who infects an organization with cancerous behavior first and foremost requires a differential diagnosis. Greed, incivility, and destructive behavior when left unchecked mimic a cancer that metastasizes. Many organizations consciously or unconsciously get in the way of a comprehensive assessment of leadership and inadvertently advance leadership induced malignancies throughout the workforce.

Finally, there is the question of who is capable, responsible or designated to recognize the need for corporate assessment? Based on experience as an external executive coach and organizational consultant I have discovered that outside of a steady flow of caustic, venomous gossip that employees are generally quite reluctant to formally speak up when they observe bad leadership behavior. As already stated there are a variety of reasons why colleagues do not call into question the behavior of superiors—even when it is the breeding ground for corporation cancers. No matter how inequitable, unethical and abusive—employees officially look the other way. Even when there are established channels that assure privileged communication and confidentiality—employees still understandably question the integrity of the process and whether in the final analysis they can be found out. In several cases I uncovered scenarios where confidentiality was compromised and punitive measures were taken against the employee. In the light of day leadership can at times penetrate confidentiality. This typically results in bosses manufacturing “bogus reasons” for dismissal of “internal spies” and “informers”—never, ever acknowledging that they fired their employee for providing negative observations of superiors. I would rather not go into further details but I can state that it is demoralizing at times when the integrity of privileged corporate communication channels are compromised and politically correct sacred cows turn out to be a sham. Unless accompanied by scandal and ethical breeches of gargantuan proportions—the elimination of an internal employee who would dare call leadership into question—is unfortunately a minor bleep on the corporate itinerary.

Ideally, employees should be able to freely and safely discuss elements of physical or corporate health with leadership. Surely, a flu or back strain does not in my mind constitute privileged communication. Likewise, abrupt, impatient, negligent, error prone or otherwise disturbing behavior in the workplace should not be glossed over—but in the absence of a “safety zone” for disclosing and sharing concerns there is a toxic gap. When employees are for good reason unwilling to speak to a superior or able to trust human resources or an employee assistance program, the disturbing behavior may not disappear at all—but rather grows and increasingly impedes production and operations. Corporate cancers grow when toxic tumors, no matter how seemingly small or trivial, are left alone and are unattended.

In the absence of internal remedies corporations turn to external coaches and consultants for assessment. Even when turning to an outside consultant, however, organizational leadership should carefully consider whether they are dictating and spelling out to the consultant where the tumor lies or if they are genuinely opening the doors for a differential diagnosis. Corporate cancers will continue to spread unless the consultant’s assessment and treatment gets to the roots of the problem. Limited access or guarded disclosure to the consultant contaminates the prospects for assessment and treatment. Once the organization and leadership provide sufficient transparency and access to corporate records and players the consultant is in a position to successfully diagnose a corporate cancer.

Alan Goldman, Ph.D., is a professor of management and faculty director of the W.P. Carey School of Business, Arizona State University West.


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