In brief
- Every company runs on a standard for what’s acceptable, whether anyone wrote it down or not.
- At Level 1, that standard is the law. At Level 2, it’s whoever happens to be in the room. At Level 3, it’s the company’s own identity.
- Toxic behavior shows up at every level. What changes is whether it gets managed.
Most conversations about toxic culture start with the behavior. The manager who yells. The gossip. The high performer everyone tiptoes around. We name the behavior, and then we look for the person to blame.
I start with a different question: what standard is this company using to decide what’s acceptable?
Every company uses one. Most never chose it. And the standard a company runs on tells you far more about its culture than any one person’s behavior does. That’s what the Toxic Culture Pyramid™ is for. It shows which standard a company is actually running on, so you can see what’s enabling the behavior instead of only reacting to it.
Level 1: The law sets the standard
At Level 1, the only shared standard is what the company is legally required to do. If something isn’t against the law or a written policy, nobody really has to deal with it.
You’ll see it in how problems get handled. A complaint gets attention when it sounds like a lawsuit, and not before. The handbook is the culture. HR gets called when someone needs to be protected, usually the company.
The law is a floor, and every company needs it. The trouble is that the law tells people what they can’t do, not how to treat each other. So below that line, people fend for themselves. They do what keeps them safe, keep their heads down and learn which behaviors nobody will stop.
Level 2: Whoever is in the room sets the standard
At Level 2, there is a standard. It just isn’t the company’s. It belongs to whoever is in charge at the moment.
One manager won’t tolerate disrespect. Another lets it slide because that’s just how people talk. One leader handles conflict head-on, and another avoids it completely. Each of them is applying the standard they brought with them, shaped by how they were raised, where they worked before and what they believe good looks like. None of them is wrong for having one. The company just never gave them a shared one.
In my experience, this is the level most companies sit at. The research shows why it matters. In SHRM’s report on toxic workplace culture, 76% of Americans said their manager sets the culture of their workplace. That doesn’t measure how many companies are at Level 2, but it shows how much weight managers carry. When the manager’s own standard sets the culture, the culture changes every time the manager does.
Level 3: The company’s identity sets the standard
At Level 3, the company has named who it is, and it has described the behaviors that go with it. The standard comes from the company, not from the law alone and not from any one person.
That doesn’t mean bad behavior disappears. People still bring their habits with them. The difference is that the behavior gets measured against something everyone can see, so it gets noticed, named and corrected the same way no matter who’s involved.
| Who sets the standard | What it sounds like |
|---|
| Level 1 | The law | “It’s not against policy.” |
| Level 2 | Whoever is in the room | “That’s just how he is.” |
| Level 3 | The company’s identity | “That’s not how we do things here.” |
Managed or unmanaged
This is the part people push back on: I don’t believe there’s such a thing as a company with no toxic behavior. Every company has behavior that goes against what it says it is. I explain why in There’s No Such Thing as a Non-Toxic Culture.
What separates companies is whether that behavior is managed or unmanaged. At Level 1 and Level 2, most of it goes unmanaged, because there’s no company standard to manage it against. At Level 3, it’s managed. It still happens, but the company catches it.
That difference shows up in who stays. When researchers from MIT Sloan Management Review analyzed why people left large companies during the Great Resignation, a toxic culture was 10.4 times more powerful than pay in predicting who would leave. SHRM estimated culture-driven turnover cost U.S. employers as much as $223 billion over five years.
How to tell which level you’re at
Look at the reason people give when a behavior is allowed to continue. That reason is the tell.
If you hear “it’s not technically against the rules,” you’re looking at Level 1. If you hear “that’s just how she is” or “it depends on who your manager is,” that’s Level 2. If people can say “that’s not how we do things here” and point to what they mean, you’re closer to Level 3.
The tell matters more than the behavior, because it shows you what’s allowing the behavior to keep happening.
The verdict
Toxic culture isn’t a type of company. It’s what happens when behavior goes unmanaged, and behavior goes unmanaged when a company has no standard of its own to manage it against.
Most companies aren’t at Level 1 or Level 2 because anyone chose it. They got there by default. Nobody named who the company is, so the law or the person in charge filled in. Moving up starts with naming your company’s identity, so there’s a standard that belongs to the company and not to whoever happens to be in the room.
If you want to see what your company’s culture is already telling you, The Culture Tell walks through the signs in your own operating numbers. And if you’re seeing the early signs of a culture slipping, start with 7 Signs Your Culture Is Starting to Slip.
Questions worth asking
- When someone in your company behaves badly, what reason do people give for letting it continue?
- Would the same behavior be handled the same way under two different managers?
- Could your leaders describe the standard your company uses, without pointing to the handbook?
Read next: There’s No Such Thing as a Non-Toxic Culture
Frequently asked questions
What is the Toxic Culture Pyramid™?
It’s a way to see which standard a company runs on when it decides what behavior is acceptable. Level 1 runs on the law, Level 2 on whoever is in the room, and Level 3 on the company’s own identity.
Is there such a thing as a company with no toxic behavior?
I don’t believe so. Every company has behavior that goes against what it says it is. The difference is whether that behavior is managed or unmanaged.
What level are most companies at?
In my experience, most sit at Level 1 or Level 2. That’s usually not a choice. When a company hasn’t named who it is, the law or the person in charge fills in.
How does a company get to Level 3?
By naming its identity and describing the behaviors that express it, so there’s a shared standard everyone can be held to.
