Government and organisational leadership were stress-tested during the financial crisis – with dire consequences for cases such as 158-year-old financial giant Lehman Brothers, which collapsed under the strain.
Around the world there's no shortage of political leaders behaving badly. Gordon Brown, the British prime minister, shouts at staff, according to a new book, and an anti-bullying helpline claims it has had calls from his employees. Australian prime minister Kevin Rudd reduced a young airline attendant to tears with verbal abuse because his vegetarian meal was unavailable during a long flight last year.
The media ticked off the PM for publicly giving the cold shoulder to New South Wales premier Kristina Keneally during tense negotiations over health reforms. And the sometimes charismatic and clever former Australian opposition leader, Malcolm Turnbull, is reported to have displayed a bad-tempered, sarcastic side to his staff.
The formula of positive leadership is the holy grail of management training, but there's increasing interest in the negative flipside – not least because there's a high price to pay when bosses behave badly. Now researchers are looking at the effects down the line for employees who cop it from leaders under pressure.
Alannah Rafferty, a lecturer in the School of Organisation and Management at the Australian School of Business, says the shock of the global financial crisis was felt at all levels. "There was real potential for bosses who were feeling the heat to become a negative for an organisation," she says. "The crisis prompted urgent change in some organisations and, if that was not handled fairly to avoid creating a sense of injustice, it put supervisors under stress." Tense leaders often take it out on employees who become the butt of short tempers and angry comments. "And, in turn, [the abusive behaviour] rolls down the organisation," Rafferty says.
Behaviours and practices associated with bad leaders, according to Rosemary Howard, executive director of AGSM executive programs at the Australian School of Business, include micromanagement, favouritism, indecisiveness, inconsistency, hypocrisy, dishonesty, poor communication, and a lack of ethics, discipline and responsibility. Typically bad leaders have a lack of self-knowledge, she says. One chief executive, she recalls, used war language. "He talked about collateral damage and staff being soldiers. When burnt out, they were called casualties of war." Perhaps he misguidedly thought this toxic environment would toughen people up – but instead they became very negative and distracted from working productively.
Hostility at Work
Negative leadership is a relatively new area of investigation. Most previous work has been on ways to promote positive leadership. "Abusive supervision is not something much talked about," notes Rafferty. "It's the dark side of the working career. Abuse and bullying can be a dirty secret bottled up because leaders hold all the cards – they have control over the rewards for working and job security." Bullying is related, but different, she says. "Abuse is hostile, negative comments – calling people, or their work, stupid. It's when people feel that they have been lied to or that the supervisor has talked badly about them behind their back, or been angry and rude to them. Certain types of people have more difficulty dealing with negative leaders because of other issues they are coping with in their life – or simply because of their personalities. Surprisingly, people with high self-esteem are the worst affected because they're used to being treated well and receiving positive comments. It is hard for their egos when they are treated badly."
Rafferty's colleague Simon Restubog is heading an Australian School of Business research team that's exploring the high cost of bad bosses with the aim of devising a strategy to help workers deal with the phenomenon. "There's clear evidence that abusive supervision is harmful to employees, can undermine an organisation and create lower job satisfaction and performance for staff – and it impacts their private lives," Restubog says.
A recent survey of 2146 Australian employees showed that almost half had witnessed their co-workers being mistreated. Co-workers who have observed hostile treatment reported higher levels of psychological distress. And researchers have begun to examine other dynamics such as the role of personality and of fairness and justice at work.
Rafferty, with Restubog and Nerina Jimmieson, a psychology researcher, explored how the rot can start from the top with bosses who are hostile verbally and nonverbally to supervisors below them. Their study into the dynamics of abusive supervision, Losing Sleep: Examining the Cascading Effects of Supervisors' Experience of Injustice on Subordinates' Psychological Health, shows how the resulting distress prompts supervisors to go on to mistreat their subordinates. The researchers looked at what starts the process and how negative interpersonal relationships at the top of an organisation link to stress that flows down to manifest itself as employee abuse. Subsequently, it may cause insomnia, which has long-term health implications.
"At work, people expect to be treated fairly with processes and in interpersonal relationships," says Rafferty. "It is a shock when they are not – it weighs on them … Put-downs can be overwhelming – a negative event is known to be five times more potent than a positive event when both occur together. Individuals who are experiencing a high level of distress are likely to be particularly susceptible to the uncertainty and anxiety provoked by unfair treatment in the workplace and especially likely to ruminate about this unfair treatment, maintaining angry feelings."
A 2007 New South Wales parliamentary inquiry investigating nurses complaints of mistreatment at Sydney's Royal North Shore Hospital, uncovered how bullying and harassment becomes a systemic problem in an organisation. "It sort of starts at the top and it filters down to the people at the coalface," said Samantha Flew, nurse unit manager in the hospital's emergency department. Another senior nurse described hostile and abusive treatment by a clinician over an extended period that had resulted in ill health and her self-esteem being "shot to pieces".
The once premier hospital fell to the bottom of the league tables after health bosses decided to amalgamate hospitals into larger health areas to save money. Hospital managements were forced to meet tough performance targets, which stressed frontline staff and saw morale collapse. The inquiry learned doctors were also unhappy with processes they considered unjust – such as being excluded from decision-making about patient care, coping with the turnover of eight hospital general managers in 11 years, and delays. It recommended in-service workshops for managers "to remove any notion that bullying, harassment and intimidation is just being 'assertive'".
To avoid fallout from badly behaved bosses, Rafferty and her colleagues say organisations need to reduce the occurrence of interpersonal injustice in the workplace at all hierarchical levels through training and development. Restubog's team is now developing an evidence-based intervention to cultivate coping skills for dealing with abusive supervision for employees who are directly affected and their co-workers. "By building their confidence, both employees and co-workers can better shield themselves from and respond to future hostile supervisory treatment," he says.
Organisations must be able to identify between positive and negative leadership, suggests Howard. The development of leaders within companies requires the same attention as managing profit and revenue lines. "Companies need to know what good leadership looks like, how to measure it, where they are short on it and how to best develop it," she says. "If people are distracted with company politics and problems with their managers, then obviously their contribution to outcomes will be less. Even the most senior executives need to think about their own development and how they role model leadership from the top down."
Aggressive and competitive leadership styles need to be addressed, agrees Alan McGilvray, former chief executive and chairman of Bayer Australia & New Zealand who now heads leadership coaching firm Norvox. He's had run-ins with managers with negative leadership styles, among them bosses who won't allow employees to make – and learn from – mistakes. And, in his own career, a manager who went to any lengths to undermine him by using comments from his direct reports. "He would search to find the negative in what I did and describe my good performance as luck," McGilvray recalls. "He would suck up to his boss and, at the same time, make life for anyone who didn't perform outright misery." On one occasion, the same leader hired someone who was incompetent. Rather than constructively address the issue, he vowed to make the life of his inappropriate hire a misery. For McGilvray, the impact of his boss behaving badly towards a colleague was profound. "I transferred to another department."
Given the damage that bad leaders can cause, it's in the interest of organisations to identify negative leadership styles in potential managers and put the brakes on their progression, McGilvray advises. "A starting point is in obtaining feedback on the style of the leader by creating a safe environment where staff/employees can say how they feel without fear of recrimination," he says. "Poor leadership directly results in a bad marketplace reputation and inability to retain staff. Gone are the days where people stayed for life. Generations X and Y [those born between 1966 and 1994] will not tolerate bad behaviour from bosses and they will tell their mates – whereas the boomers [born between 1945 and 1960] would normally just put up with it. Young people are attracted to organisations that have a vibrant culture, and since culture is heavily influenced by the leader's style, companies that don't attract the right people need to ask why."