The Real Cost of Catering to Toxic Clients: A Culture Perspective

Culture Matters, the monthly forum that tackles topics that impact company culture, tackled toxic customers in the conversation held last Friday, October 18, 2024.

Toxic customers, while rare (hopefully!) have a ripple effect on the company, people involved, and people who see the toxic behavior tolerated. The company can be impacted financially by scope creep, depleted morale, disengagement, turnover, and damaged reputation. Employees can be impacted when customers berate them, disrespect boundaries, and demand services beyond what is agreed upon.

When leaders allow disrespectful customers to continue treating employees poorly, they send the signal that their people do not deserve respect.

We have not had toxic clients in recent years, but some clients have. One executive client, Pam, shared about the client point person, Dwight, being so toxic that no one else will deal with him. Pam (names changed, obviously) said Dwight is rude, belittles the women account leaders, and demands they are available 24/7. No one wanted to work with Dwight, but his account brought in decent revenue. His account landed with Pam’s team because she was thick-skinned and could handle him.

And, she could. She did not take his treatment personally. The interesting thing Pam noted, however, was that her bosses would not speak with Dwight about how he treated their colleagues. Their lack of courage showed a side of leadership that discouraged her, and she lost respect for them saying, “They don’t respect me very much either.”

The Culture Matters conversation included a discussion around how to recognize the toxic behavior early so we can head it off before it gets out of hand. A few things to watch for…

◼️ Natural stages in the client relationship (i.e., new point people, account changes)
◼️ Consistent disrespect, boundary violations, or manipulation
◼️ Missed or constantly late deadlines, payments, meetings

To prevent toxic relationships, prevent them from occurring in the first place by onboarding clients to your company’s way of working. Include communication styles and expectations, boundaries (i.e., emails are read between 9am and 6pm), workflow, and confirming project scope.

 Seek to bond with clients early and often so communication is clear all along and relationships don’t have time to sour.

Here are a few other things discussed in this month’s Culture Matters:

◼️ Examples of Toxic Client Behaviors: Participants shared examples of toxic behaviors, including constant disrespect, unreasonable demands, aggressive communication, arguments about fees, and manipulative tactics.

◼️ What Non-Leaders Can Do: It’s important for employees to document interactions, escalate issues when necessary, and maintain professionalism while protecting their well-being.

◼️ What Leaders Can Do: Leaders have a responsibility to set boundaries, provide support to employees, and take decisive action when a client relationship becomes untenable. Discern how the values of the company align with the behavior you are tolerating.

The company culture will become the worst behavior you tolerate, so be careful what you expect your employees to accept. Be intentional about the behavior you accept.

 One of the worst statements in the history of business is: the customer is always right. They are not always right, and the pressure of that expectation contributes to toxicity. While there’s no need to be harsh when a client is wrong, bending over backwards for clients who are not only incorrect but also toxic goes beyond what’s reasonable for any company or employee to endure.

If you take care of your employees, they will take care of your customers. The Ritz Carlton, known for exceptional customer service, has this philosophy nailed.

"We are superior to the competition because we hire employees who work in an environment of belonging and purpose. We foster a climate where the employee can deliver what the customer wants. You cannot deliver what the customer wants by controlling the employee." 

Horst Schulze, Former Ritz Carlton President

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Join the Next Culture Matters Session!

Register for our next Culture Matters discussion on November 15, 2024, where we'll dive into “How to Boost Your Culture After a Setback.” It’s a perfect follow-up to this month’s conversation, offering strategies to rebuild and boost culture after challenging times. We look forward to seeing you there!

The truth about Google's culture and 5 take-aways for all company leaders

When companies make the news, there often is more going on than meets the eye, and the truth comes out eventually.

For example, Google was the darling of company culture for years with its nap pods, slides, free food, dry cleaning, bikes, and on-site clinics. And more. Google became the standard and inspired all the Silicon Valley tech companies, along with companies all over the country, to one-up each other with their cool offerings to get top talent to join.

To the un-trained eye, it looked like Google cared so much about its employees. Just a year ago, Google touted its increased parental and caretaker leave policy as the Chief People Officer said they wanted to offer “extraordinary benefits” for their people.

Apparently, as Google expanded its leave and staff, it did so without any strategic thinking about its stakeholders, especially its customers. Now, it’s parent company is in the middle of laying off 12,000 employees. As laid off Googlers exit, they get 16 weeks of severance, along with two weeks of pay for every year of employment with Google.

The severance is decent, but one issue came to light last week.

Late last week, Google was in the news for not honoring that new leave policy for people who have been laid off during their approved leave. For example, one woman who just had a baby learned via text that her job was eliminated, along with her maternity leave. Just one hundred people are affected, yet Google is not covering what it said it would cover. (Source: CNBC, Google nixes paying out remainder of maternity and medical leave for laid-off employees, by Jennifer Elias, March 17, 2023)

People plan their lives around company promises, yet Google gave no regard to the promises made to their people. That’s a warning to all current and future employees: you cannot trust Google.

To someone highly experienced with company culture, it was clear as Google’s culture grew from being “bros in a garage” to manipulating people so they would work longer hours and stay with the company longer.

It was never about the people. Google proved it. Pay attention and learn from them.

Five lessons to learn from Google’s culture behavior this week:

1. Strategic planning is crucial when adding people. Strategic thinking would consider what happens if/when customer demand changes. If Google, and Meta, DocuSign, Twilio, and others, had been more strategic prior to hiring all the extra people over the past few years, they would not be in the midst of the downsizing now.

2. Align your company culture with values it intends to keep. List the values and how those values are lived every day—be specific, not pollyanna’ish. Then, design the culture to support the values.

3. Be honest when promoting your company values and culture. Your company doesn’t have to be fun and creative. Lots of people do not want to work at a high-energy place like Google. Understand your culture and communicate about it honestly. At least that way, you are more likely able to keep your promises.

4. Keep your promises. If your policy says people get leave, and someone applies for it, and it is approved, honor that promise. Backing out alerts people to the fact that you do not keep promises. And, they will relate to you accordingly.

5. If you care about your people, then care about your people honestly. You can share hard news, but don’t lie or cover up downward trends. When cultures are really about manipulation, the undercurrent of distrust will infiltrate everything. It takes up so much time and stifles anything good.

Sometimes companies succeed in spite of their practices instead of because of them.

Google will survive this PR disaster. It will go on to make billions for its CEO and investors. It could do more good, like it says it wants to, if it approached its culture more genuinely. Companies can do both: care about people and profit. There’s all kinds of research that proves it—you can google it.