Red Flags of Toxic Managers & Companies

How to help new college graduates identify problematic workplaces

Given our obsession with wealth and power on social media, the majority of us can easily fall prey to corporate fraud. In fact, white-collar crime costs Americans $3 billion per year. And if you’re a new college grad, lacking business experience, it is difficult to identify these charming con artists who can be found not only on Wall Street and Silicon Valley but also anywhere lacking transparency in bookkeeping or accountability in management.

These toxic bosses employ the classic techniques of bullying, gaslighting, and manipulation to cover their tracks. They not only cultivate powerful networks but hide behind them because they know no one wants to kill a rainmaker. They will systematically deny, deflect then attack viciously when exposed as we witnessed in 2018 with Elizabeth Holmes.

For example, Erika Cheung, a former Theranos employee, described being gaslighted by the COO, and dismissed by the board member, George Schulz, former U.S. Secretary of State, when she shared her concerns about skewed blood test results from the company’s Edison device. In the lab, she witnessed how they deleted data points to confirm the company’s narrative of their groundbreaking machine. But she knew that Theranos was endangering patients lives despite its $9 billion evaluation. And she also knew she had to come forward.

However, when first hired, Cheung was blinded by Elizabeth Holmes’ passion and story, believing this ambitious company could change the world.

So how do new grads look past the fairy dust when considering employers?

They must evaluate corporate culture and assess prospective managers.

For example, toxic managers are experts at finding companies that complement their personalities and employ a creation myth aggrandizing their intellectual prowess and experience.

Many of them are hired to cut costs and boost profits. As ineffective boards avoid scrutinizing their methods, these managers brag about their abilities, purge payrolls, close plants, court analysts and inevitably cross the ethical boundary for good business practices to boost their own bottom line. An easy sign to identify these problem managers are usually their nicknames such as “Chainsaw” Al Dunlap of Sunbeam or “Le CostCutter” Carlos Ghosn of Renault-Nissan now a fugitive in Lebanon.

Watch out for their toxic traits…

1. Overly confident, superficially charming to their clients and bosses, vicious to the juniors beneath them.

2. Take credit for others’ work, undermining their team.

3. Believe that they are above the rules, lacking integrity.

4. Unrealistic expectations of inexperienced workers.

5. Psychological intimidation — use of fear and anger to berate employees, creating a tense work environment.

6. Arrogant but threatened by workers who take initiative.

7. Inflexible and cannot understand the difference between managing and controlling.

8. Greedy, looking for quick fixes instead of long-term planning.

9. Denial of responsibility for poor decisions and refuses all accountability for problems.

10. Verbal abuse — yelling at the slightest provocation.

New graduates also need to be careful of any corporate culture which includes:

1. Control and Secrecy — autocratic management, complete lack of transparency such as unknown investors, chain of command, business infrastructures and unproven products such as Theranos blood tests.

2. Maintaining the bottom line at any cost — including unrealistic sales growth on the books and questionable accounting as seen with Bernie Madoff.

3. Fear and Silence — employees are rewarded for their silence and punished if they reveal anything questionable or embarrassing. Examples can be found in practically every story of corporate fraud including Enron, Tyco, WorldCom, AIG, and Theranos.

4. Conflicts — that are open and hidden such as professional and familial nepotism, weak and overpaid boards, lax oversight and SEC notices.

5. Inexperienced or weak executives under a controlling, “brilliant” Chairman — Greedy sycophants and ineffective boards are always red flags for company troubles.

6. Ethical lapses and subsequent atonement to conceal the details— Unfortunately, what business and political leaders do in their private lives provides us a reliable indicator for possible ethical breaches now and in the future.

So how do new college graduates check potential problems with employers?

If any of the above red flags appear, then new grads should investigate potential employers with more scrutiny than they do a Tinder date.

Check domestic and international newspaper articles, negative and positive, on the prospective employer or manager.

Use different browsers. If a company has used SEO strategies to hide lawsuits or negative press, you may find it on another browser besides Google.

Network through LinkedIn and your alma mater, asking current employees near your age about their experiences with a prospective workplace.

In publicly traded companies, look for steady income flow in annual reports and 10Ks. Question high debt to equity ratios. They could be financing their growth through borrowing.

And if necessary, check LexisNexis to monitor lawsuits against prospective companies.

By taking extra precautions, new college graduates may be able to avoid some of these toxic bosses and companies that could permanently hurt their careers.

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Alexis Azria

Writer and curious creator. Passionate about work, life & social issues. Visit alexisazria.com