Three Types Of Company Culture: Toxic, Unhealthy, And Healthy

AdVance Leadership » Three Types Of Company Culture: Toxic, Unhealthy, And Healthy

Welcome to Friday 411, issue #044. In 4 minutes, with 1 insight and 1 action, you’ll discern that out of three types of culture, there is only one that you want for your company.   

1 Insight

As the leader, you hold the responsibility of creating the culture of your organization. You determine whether you build a Toxic, Unhealthy, or Healthy Culture.

Last week, a beloved late-night comedian was in the news for the toxic work environment he created. On September 7, 2023, Rolling Stone published an online article about Jimmy Fallon and The Tonight Show. Employees (current and former) reported belittling behavior, intimidation, outbursts, and erratic behavior. These employees shared stories of nightmares, suicidal ideation, and needing to take anti-anxiety medication.

Whether you lead a massive multi-national conglomeration, a large division, a small team with three staff members, or a late-night comedy show, the culture depends on you.

You’ve heard that every organization already has a culture. That’s true. In fact, there are only three types of culture that can exist in a company:

  1. A Toxic Culture
  2. An Unhealthy Culture
  3. A Healthy Culture

Leaders who fail to take ownership for creating a healthy culture unintentionally allow an unhealthy or toxic culture to emerge. 

Before we look at the differences between the three types of cultures, let’s examine what culture is.

What is Culture?

Every group of people has behaviors that become ingrained. These behaviors are often subconscious to the point that people in the group don’t even realize that they’re practicing those behaviors. But those behaviors reveal the values of the organization. Culture is the lived-out values of a group. It’s the amalgamation of all the behaviors that are driven by the values of an organization.

1. Toxic Culture

A Toxic Culture is one that allows or encourages dehumanizing behavior. Those dehumanizing behaviors could include discrimination like racism, sexism, ageism, etc. Those behaviors can also include bullying or intimidation.

I (Garland) once sat in on an Executive Team meeting. The team was discussing a goal that they had failed to achieve and why they hadn’t accomplished it. After 20 minutes of discussion, the CEO pointed to the COO and said, “If you weren’t so stupid and lazy, we wouldn’t be in this situation. I don’t know why you should even work here.”

This interaction demonstrates three behaviors that inevitably occur in a toxic culture:

  • Shame – humiliation of others
    The CEO called the COO stupid and lazy in front of the whole team.
  • Blame – refusal to take ownership
    The CEO didn’t accept responsibility for the failure but pointed the finger at the COO.
  • Fear – attempting to motivate people by threating them
    The CEO threatened the COO’s job.

2.  Unhealthy Culture

Slightly better than toxic cultures are unhealthy ones. Unhealthy Culture occurs when the tolerated behaviors in an organization don’t align with the values leaders proclaim.

Here’s an example we’ve seen multiple times: A company proclaims that its highest value is “our employees.” Leaders make claims like, “Our people are our most important asset. We believe that when we make their lives better, they make our customer’s lives better.”

But leaders then tolerate a high-paying client who verbally abuses, belittles, and insults those employees. Employees bring this client’s behaviors to the attention of leaders, yet the leaders ignore the client’s actions because they produce so much revenue.

It becomes clear that the true value is “Consistent Revenue,” not “Our Employees.”

This type of behavior reveals an Unhealthy Culture – one in which the proclaimed value doesn’t match up with the behavior.

A diagram of values and behavior Description automatically generated

If you’re going to create the third type of culture – a healthy one – it will take intentionality.

3. Healthy Cultures

A Healthy Culture is one in which the values of the organization drive the behaviors. 

A diagram of a healthy culture Description automatically generated

Let’s use the former example in a Healthy Culture. A company values “Our Employees” and has a high-paying client who verbally belittles those employees. A leader would do something like this:

  1. Talk to employees to understand what the client is doing.
  2. Assure the employees that he values them and that he will talk to the client.
  3. Talk to the client to understand his/her actions.
  4. Let the client know that they do not tolerate belittling behaviors from clients.
  5. Let the client know that, if those actions happen again, the client will need to take their business elsewhere.

How to Create a Healthy Culture

Leaders rarely try to produce Unhealthy and Toxic Cultures. They happen by accident. They occur when leaders don’t intentionally try to create a Healthy Culture. Unintentional culture always devolves into an Unhealthy Culture and usually a Toxic one. 

How can you intentionally create a Healthy Culture? It occurs in two steps:

  1. Identify values.
  2. Design behaviors.

1. Identify values.

Leaders need to identify the values that drive the group or the values that should drive them. Values are beliefs, principles, or ideals that determine behavior.

If your organization has existed for more than a few months, it already has values that drive the group. These are called Actual Values. To find the Actual Values, look at the common phrases the group uses and the repeated behaviors that the group does. This will help you identify the motives behind those words and actions. Those motives demonstrate the values. You might want to check out 84 Core Values in the Workplace to help you name those values.

Sometimes, though, you realize that the Actual Values aren’t the ones you truly want. In that case, determine the Aspirational Values – those that you want the team to embrace.

2. Design behaviors based on values.

Once you know what the values are, determine the behaviors that drive those values. There are four types of behaviors to develop: Habits, Attitudes, Resource Allocation, and Processes. For more on how to shape these behaviors, check out Four Behaviors You Need to Shape Company Culture.

Don’t attempt to change all the expected behaviors at one time. Instead, select one behavior at a time to implement with your team. Explain to them the culture you’re trying to create and the value that drives this behavior.

Rolling Stone reported that The Tonight Show had six different leadership teams in nine years. Each of these teams failed to create a Healthy Culture, and it has caused massive damage in people’s lives.

As the leader of your team, you have the responsibility to shape a healthy culture.

1 Action

Identify the values that drive your organization. Do they align with the values you say you believe?


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