Dysfunctional leadership creates a self-sustaining cycle where employees vying for promotion mimic the toxic behaviors of their boss. They do this to endear themselves to the decision-maker, believing that demonstrating a better leadership style would disqualify them from the role.

A 'blame and shame' culture develops when all bad outcomes are punished equally, chilling employee reporting. To foster psychological safety, leaders must distinguish between unintentional mistakes (errors) and conscious violations (choices). A just response to each builds a culture where people feel safe admitting failures.

When a leader models extreme behavior, like working immediately after surgery, it sends an implicit message to the team: 'Your personal crises don't matter; the mission is everything.' This can inadvertently create a culture where employees feel they can't take time for personal emergencies.

A leader focused solely on personal wins creates a toxic environment that ultimately leads to their own apathy and burnout. They become disconnected from the very machine they built, creating a job they personally loathe despite their apparent success.

Focusing on "bad to great" is more effective than "good to great" when scaling. Bad behaviors and destructive norms are so corrosive that they make it impossible for excellence to take root. A leader's first job in a turnaround or scaling effort is to eliminate the bad—like dirty bathrooms or incompetent employees—before trying to implement the good.

Framing coaching as a punitive measure for poor performance destroys the intrinsic motivation necessary for change. It should be positioned as a developmental tool for high-potential growth and expanding impact, not as a punishment for underperformance.

Annual or quarterly performance reviews are high-pressure, judgmental events that create fear. A more effective approach is to reframe management as coaching. This means providing frequent, trust-based feedback focused on developing an employee's long-term potential, rather than simply rating their past performance.

A company's culture isn't its mission statement; it's the worst behavior it's willing to accept. High-integrity employees will leave a toxic environment, while transactional, self-serving employees who tolerate anything for a paycheck will stay. This selection process causes a continuous erosion of culture.

Allowing a high-performing but toxic employee to thrive sends a clear message: results matter more than people. A leader's true impact and the company's real culture are defined not by stated principles, but by the worst behavior they are willing to accept.