Organizational culture is mostly shaped by the way its leaders interact with the people in that organization. At times, we come across leaders, who believe that the company’s most chronic problems – stagnant sales, delayed projects or inefficiency in production or quality issues – exist only because people aren’t good enough. They blame managers reporting to them, and see them as incompetent, lacking motivation and commitment. They have very little trust in their subordinates, and they are authoritative. They maintain that managing an organization is all about managing the people in it. Hence, they deploy “people-driven” tactics to control them. Here are a few examples. <ul><li>Frequently shifting roles and responsibilities of people</li><li>Firing key senior managers and hiring new ones regularly</li><li>Personally controlling every aspect of decision-making; very minimal delegation</li><li>If the organization is very big, they use a coterie of personal favourites to keep watch over others and to overrule the decisions of others. </li></ul>The resultant impact is an environment of “find-the-culprit” way of analyzing issues. In such an environment, everyone tries to be a survivor. All actions that people take are only with the purpose of securing their place in the organization. When key managers operate based on principles of self-preservation, additional issues crop up. This perpetuates a toxic work culture. Information OpacityIn such environments, feedback from managers is usually filtered to “save” or “promote” someone, and as a result, leaders don’t get to know the real issue at hand for a long period, despite having many interactions. Data is tailored to suit the hypothesis of individual managers. When leaders eventually discover the real issue, they feel cheated, which in turn further reinforces the belief that managers are bad and cannot be trusted. Low management bandwidthManagers then become focused on avoiding blame. Despite a formal structure, they tend to pass on decision-making to the leaders. Consequently, the leaders’ bandwidth is stretched. And the company’s decision-making process slows down. Instinctive yet bad solutionsIn such environments, leaders become delusional about their own intelligence, especially when they are surrounded by managers who feed them unrealistic amounts of positive feedback. Leaders become instinctive in decision-making. Instinctive decisions without critical feedback tend to be half-baked and eventually cause damage over a period of time. Reversal of wrong decisions becomes difficult as critical feedback does not reach the leaders. There may be other decision biases in play as well. Filtered/limited information can create availability bias which prompts leaders to draw a conclusion based on available information. . Also, once they have some initial information, they tend to filter all subsequent information through that early data. This is called anchoring bias which can also hamper the decision-making process.Low on InnovationAn environment of blame is unfavourable for innovation. Fear of failure encourages people to maintain status quo and avoid experimentation. The only exception is made for ideas originating from the leaders themselves! Organizations have various levels of this toxic work culture depending on their leadership styles – some are on the extreme, while others suffer from it fleetingly.The question before us is ‘Why do such leadership styles thrive in organizations?’. This cannot be answered by putting the blame on specific leaders and their styles. We will not gain any knowledge by doing so. Cognitive bias and Leadership styleLeaders, like normal human beings, suffer from cognitive biases. One such bias is Attribution Bias, which refers to the systematic errors made when people evaluate or try to find reasons for their own and others’ behavior/performance. When it comes to undesirable behaviour from others, we tend to attribute it to the personality traits of the person. In contrast, when it comes to explaining our own behaviour,  we attribute it to systemic conditions, our skills or intelligence, depending on outcomes. When desired results come in, we credit our actions and intelligence. Undesirable results are blamed on unavoidable circumstances. (That reckless driver who skipped the signal is a jerk! But when I did it, it was because I had to rush to an appointment with the doctor. The improved returns in the stock portfolio are because of my decisions while the dip was because of the harsh market).  Leaders, occupying a position of power over others, receive minimal critical feedback. Hence, they unknowingly suffer severely from attribution cognitive bias.  Acknowledgement of BiasUnfortunately, unlike computer programs, the bugs in the form of biases in human cognition cannot be removed. One can only be consciously aware and willing to live with good enough workarounds to prevent its damaging effect.  Critical feedback can help leaders become aware of attribution bias. This is hard to extract from one’s subordinate. So, the only option is to do an experiment on your own, a simple thought experiment.  Make two lists of people by asking the following questions. “Who were your favourites in the past? Who are they in the present?” If the lists are different, most likely you are suffering from attribution error. Your own judgement about people cannot be subjected to any repeatable test. Hence, by definition, it cannot be taken seriously. A template to overcome Attribution Bias, once one is aware of the bias and then willing to self-impose a workaround, is possible.  The way to overcome attribution bias is by putting in four transparent rules, which will force one to circumvent the bias.  <ul><li>Do not blame:  When analysing any issue for causality, no one is allowed to blame any manager. If there is a temptation to attribute the undesired behaviour of an individual manager as the cause, the analysis must go deeper to understand why the manager behaved the way he/she did. This way of thinking may force one to look into policies, procedures or formal responsibilities that lead to the behaviour.  </li><li>Look for underlying conflict: If issues are chronic and repetitive, assume that there is an underlying deeper conflict in the organisation. A top-of-the-mind solution for the issue at hand will usually have a severe negative impact on some other aspect of business. Unless the competing needs are understood, no decision should be taken. Sales growth can conflict with inventory reduction needs or margin improvement goals. Quality goals can come in the way of production efficiency improvement. Speeding up a project can come in the way of completing the entire scope.  </li><li>Find ways to meet competing needs: The pressure of competing needs is a big reason for a standstill in decision-making. One needs a breakthrough approach to develop solutions that meet both competing needs. Without that, delays in decisions are inevitable. For example, sales growth and inventory reduction can be achieved by finding a way to reduce supply lead time. Quality goals can improve while enhancing efficiency by ensuring quality parameters at source.  </li><li>Do not assume people are ‘lazy’: If a manager is not completing tasks assigned to him, most likely he is busy with something else that he/she thinks is more urgent. </li></ul>Leaders should formalise and widely announce these four rules in the organisation.  This will exert collective pressure on them (and others) to adhere to them. Good usage of the above “rules” will lead to the following changes <ul><li>Leaders will talk less and listen</li><li>They will master the art of asking critical questions to uncover real issues.</li><li>Soon, they will facilitate decision-making rather than making all the decisions. </li></ul>Once leaders begin following the above practices, the culture of the organisation will undergo a transformation. Transparency will improve as bad news moves up faster. Decisions will be speedier as managers will no longer take refuge in defensive behaviour.  More importantly, managers will not worry about failing – a critical requirement for an innovative organisation.

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Problem: Toxic organisational cultures often stem from authoritarian leadership styles that blame people for chronic issues like low sales or inefficiency. This creates a blame-driven environment marked by fear, opacity, and poor decision-making, stifling innovation and slowing progress. Solution: To counter this, leaders must adopt four rules to overcome bias: avoid blame, uncover underlying conflicts, seek solutions that meet competing needs, and never assume people are lazy. These principles involve shifting focus from individuals to systemic causes. Benefits: Following these rules make leaders listen more, make better decisions, encourage transparency, and foster a culture of trust and innovation—enabling faster problem-solving and sustainable growth.

Key Takeaways

Leadership styles significantly influence organizational culture, often leading to a toxic blame game. This situation is often rooted in leaders' cognitive biases. The article suggests four clear rules to combat these biases and enhance workplace culture.

Leadership styles and organization culture

Organizational culture is mostly shaped by the way its leaders interact with the people in that organization. At times, we come across leaders, who believe that the company’s most chronic problems – stagnant sales, delayed projects or inefficiency in production or quality issues – exist only because people aren’t good enough. They blame managers reporting to them, and see them as incompetent, lacking motivation and commitment. They have very little trust in their subordinates, and they are authoritative. They maintain that managing an organization is all about managing the people in it. Hence, they deploy “people-driven” tactics to control them. Here are a few examples. <ul><li>Frequently shifting roles and responsibilities of people</li><li>Firing key senior managers and hiring new ones regularly</li><li>Personally controlling every aspect of decision-making; very minimal delegation</li><li>If the organization is very big, they use a coterie of personal favourites to keep watch over others and to overrule the decisions of others. </li></ul>The resultant impact is an environment of “find-the-culprit” way of analyzing issues. In such an environment, everyone tries to be a survivor. All actions that people take are only with the purpose of securing their place in the organization. When key managers operate based on principles of self-preservation, additional issues crop up. This perpetuates a toxic work culture. Information OpacityIn such environments, feedback from managers is usually filtered to “save” or “promote” someone, and as a result, leaders don’t get to know the real issue at hand for a long period, despite having many interactions. Data is tailored to suit the hypothesis of individual managers. When leaders eventually discover the real issue, they feel cheated, which in turn further reinforces the belief that managers are bad and cannot be trusted. Low management bandwidthManagers then become focused on avoiding blame. Despite a formal structure, they tend to pass on decision-making to the leaders. Consequently, the leaders’ bandwidth is stretched. And the company’s decision-making process slows down. Instinctive yet bad solutionsIn such environments, leaders become delusional about their own intelligence, especially when they are surrounded by managers who feed them unrealistic amounts of positive feedback. Leaders become instinctive in decision-making. Instinctive decisions without critical feedback tend to be half-baked and eventually cause damage over a period of time. Reversal of wrong decisions becomes difficult as critical feedback does not reach the leaders. There may be other decision biases in play as well. Filtered/limited information can create availability bias which prompts leaders to draw a conclusion based on available information. . Also, once they have some initial information, they tend to filter all subsequent information through that early data. This is called anchoring bias which can also hamper the decision-making process.Low on InnovationAn environment of blame is unfavourable for innovation. Fear of failure encourages people to maintain status quo and avoid experimentation. The only exception is made for ideas originating from the leaders themselves! Organizations have various levels of this toxic work culture depending on their leadership styles – some are on the extreme, while others suffer from it fleetingly.The question before us is ‘Why do such leadership styles thrive in organizations?’. This cannot be answered by putting the blame on specific leaders and their styles. We will not gain any knowledge by doing so. Cognitive bias and Leadership styleLeaders, like normal human beings, suffer from cognitive biases. One such bias is Attribution Bias, which refers to the systematic errors made when people evaluate or try to find reasons for their own and others’ behavior/performance. When it comes to undesirable behaviour from others, we tend to attribute it to the personality traits of the person. In contrast, when it comes to explaining our own behaviour,  we attribute it to systemic conditions, our skills or intelligence, depending on outcomes. When desired results come in, we credit our actions and intelligence. Undesirable results are blamed on unavoidable circumstances. (That reckless driver who skipped the signal is a jerk! But when I did it, it was because I had to rush to an appointment with the doctor. The improved returns in the stock portfolio are because of my decisions while the dip was because of the harsh market).  Leaders, occupying a position of power over others, receive minimal critical feedback. Hence, they unknowingly suffer severely from attribution cognitive bias.  Acknowledgement of BiasUnfortunately, unlike computer programs, the bugs in the form of biases in human cognition cannot be removed. One can only be consciously aware and willing to live with good enough workarounds to prevent its damaging effect.  Critical feedback can help leaders become aware of attribution bias. This is hard to extract from one’s subordinate. So, the only option is to do an experiment on your own, a simple thought experiment.  Make two lists of people by asking the following questions. “Who were your favourites in the past? Who are they in the present?” If the lists are different, most likely you are suffering from attribution error. Your own judgement about people cannot be subjected to any repeatable test. Hence, by definition, it cannot be taken seriously. A template to overcome Attribution Bias, once one is aware of the bias and then willing to self-impose a workaround, is possible.  The way to overcome attribution bias is by putting in four transparent rules, which will force one to circumvent the bias.  <ul><li>Do not blame:  When analysing any issue for causality, no one is allowed to blame any manager. If there is a temptation to attribute the undesired behaviour of an individual manager as the cause, the analysis must go deeper to understand why the manager behaved the way he/she did. This way of thinking may force one to look into policies, procedures or formal responsibilities that lead to the behaviour.  </li><li>Look for underlying conflict: If issues are chronic and repetitive, assume that there is an underlying deeper conflict in the organisation. A top-of-the-mind solution for the issue at hand will usually have a severe negative impact on some other aspect of business. Unless the competing needs are understood, no decision should be taken. Sales growth can conflict with inventory reduction needs or margin improvement goals. Quality goals can come in the way of production efficiency improvement. Speeding up a project can come in the way of completing the entire scope.  </li><li>Find ways to meet competing needs: The pressure of competing needs is a big reason for a standstill in decision-making. One needs a breakthrough approach to develop solutions that meet both competing needs. Without that, delays in decisions are inevitable. For example, sales growth and inventory reduction can be achieved by finding a way to reduce supply lead time. Quality goals can improve while enhancing efficiency by ensuring quality parameters at source.  </li><li>Do not assume people are ‘lazy’: If a manager is not completing tasks assigned to him, most likely he is busy with something else that he/she thinks is more urgent. </li></ul>Leaders should formalise and widely announce these four rules in the organisation.  This will exert collective pressure on them (and others) to adhere to them. Good usage of the above “rules” will lead to the following changes <ul><li>Leaders will talk less and listen</li><li>They will master the art of asking critical questions to uncover real issues.</li><li>Soon, they will facilitate decision-making rather than making all the decisions. </li></ul>Once leaders begin following the above practices, the culture of the organisation will undergo a transformation. Transparency will improve as bad news moves up faster. Decisions will be speedier as managers will no longer take refuge in defensive behaviour.  More importantly, managers will not worry about failing – a critical requirement for an innovative organisation.