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The toxic leader paradox

The real reason that terrible leaders get ahead, plus how one company hopes to offset inflation costs for employees

A partial image of Rex Tillerson, CEO of Exxon Mobil
Reuters/Mike Segar
Firmly on the management track.
This story was published on our The Memo from Quartz at Work newsletter, Practical advice for modern workers everywhere.
  • Lila MacLellan
By Lila MacLellan

Quartz at Work senior reporter

Published

This week’s lead story is written by Cassie Werber, a senior reporter at Quartz. She digs into the surprising reasons that companies tend to promote the wrong people into management roles, creating leaders who are ineffective, toxic, or both.


When organizational psychologist Mary-Clare Race studied personality disorders at work, she came to a surprising conclusion: A lot of the time, toxic leaders don’t get ahead despite their problematic behavior. They succeed because of it.

Race is now chief innovation and product officer at LHH, a recruitment and coaching company with 8,000 staff worldwide. She says dysfunctional leadership has its roots in how we as a society view career progression, and how companies support people once they’re on the leadership track.

While studying large financial institutions for her doctorate at University College London, Race discovered that “a lot of organizations knew they had a problem around toxic workplace behavior and dysfunctional leadership, but they didn’t always want you to come in and lift the lid on it because they would then have to deal with it,” she says. This was a few years ago, and it’s possible that movements like #MeToo have done the kind of lid-lifting Race describes and have changed things. But business culture is replete with enough examples of far-from-ideal leaders to suggest the practice hasn’t disappeared.

When someone with problematic behavior starts getting promoted, for example at a big bank, they often rise higher through the ranks, and do so more quickly, than others, Race says.

“The paradox in all that is that some of the most toxic leaders in that environment are the most successful. Because they feel most willing to take risks,” she says. Their ability to make decisions with potentially negative consequences for others might sometimes pay off in good outcomes for the business—at least in the short term.

How organizations can start to wipe out toxicity

💡 Reinvent career paths. Traditional company structures don’t just reward the wrong behaviors, they tend to reward them in the wrong way. Employees with stellar personal performance might be promoted quickly into positions where they manage other people, but management may not suit their skills. With a broader idea of what “success” and “progress” look like, individuals who might otherwise end up as poor managers could keep advancing without making anyone else, or themselves, miserable.

💡 Support the c-suite. Top leaders should be able to access the support of a coach, either within an organization where they work or independent of it. Organizations should provide leaders with support, like management training via HR.

What leaders can do for themselves 

💡 Build a personal board. Race suggests those with top-flight management ambitions build themselves a “board of advisors” for their own career, comprising people who can offer insight on different aspects of work and wellbeing and who don’t all come from within the same organization.

💡 Protect themselves from burnout. Managers should take care of themselves physically. That means a good diet, exercise, and healthy work practices, like “not getting up at 5am and doing two hours of emails,” Race suggested.

To read the rest of this story, head to Quartz.

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Five things we’re reading this week

🧑🏽 Data suggest companies might never get workers back to the office five full days. Only 49% of employees who face full-time return-to-office mandates are complying.

💵 Venture capital investments are hardly drying up. Despite gloomy market forecasts, early stage investors are hunting for well-timed bargains.

🔍 The SEC is investigating Goldman Sachs’ ESG funds. To guard against greenwashing, regulators will examine whether the bank’s mutual funds are structured as advertised.

🇺🇸 US tech workers with H-1B visas are calling for a change to the current immigration system. More than 200,000 children of high-skilled immigrants are at risk of being booted out when they turn 21.

🚋 The commute emerges as a point of friction for companies and employees. As return-to-office plans take hold, should employers count commuting as part of the work day?

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Reframe your future with EY. EY can help clients realize bold ambitions using technology, data and experienced teams, to achieve unprecedented levels of growth, out-run competitors and discover new sources of value creation, for the short and long term.Advertisement
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30-second case study

For many employees, inflation has added insult to the injury of aggressive return-to-office plans, as people who have been working remotely for more than two years must now factor in the soaring price of gas, lunch, and child care when making arrangements to go back to working in person.

The higher costs are also leading to greater financial instability for lower-paid workers, who often can’t work from home even part of the week. According to Unite, a UK trade union, some people who work for Lloyds, the nation’s largest bank, have gone into debt or cut back on their pension payments as they face rising rents, and climbing prices for groceries, heating, and transportation.

Unite has been pushing Lloyds to improve employee pay, even sending bank workers to rally outside the company’s general meeting in May. “While Lloyds Banking Group are making obscene amounts of money year after year, we cannot accept a situation where their workers, the backbone of their business, are struggling financially,” one Unite officer said at the time.

In response, Lloyds announced this week that it would give employees a one-time bonus of £1,000 (US$1,200) to offset the rising cost of living. The vast majority of the bank’s employees—some 64,000 workers—will be eligible for the bonus, but senior managers and executives would be excluded, Reuters reported.

The takeaway: The bank’s decision to create this pop-up benefit “highlights the pressures on employers to help mitigate the impact of price rises on staff,” Reuters observed. It’s also a sign of momentum in employee activism at a time when companies are still struggling to fill labor shortages.

Last month, the UK had more job openings than job seekers for the first time on record, the BBC writes. Some companies, including major grocery store chains, are bumping up pay to recruit and keep workers. Those that don’t take similar measures should probably expect to hear from employees and union leaders in the coming months.

Sharon Graham, Unite’s general secretary, cast the new benefit for Lloyds employees as a good start. “Staff will welcome the £1,000 bonus but there is still a long way to go to eradicate low pay in what is one of the economy’s most profitable sectors,” she said in a statement. This victory, she said on Twitter, “is an important step in changing the bank’s pay structures.”

For its part, Lloyds said it would keep economic conditions in mind when it sets up pay increases for the firm’s employees in 2023.


You got The Memo!

Today’s Memo was written by Cassie Werber and Lila MacLellan, and edited by Francesca Donner. The Quartz at Work team can be reached at work@qz.com.

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