What is Corporate cancer?

Corporate cancer is when one or more members of the organization take action to negatively impact the business or another person within the business.  When you hear a diagnosis that you or someone you know has cancer many feelings and thoughts rush through your mind.  You may ask questions like where? When did it start? How far has it spread? What treatment options are there? There is an urgency to stop the spread and eliminate the cause of the cancer.  All of the sudden, this problem rises to the highest priority because we know how serious and mortal it can be.  

With a business, however, there is no universally understood term to signify the source or spread of a potentially terminal disease within the company.  All businesses are made up of people. People are complex, diverse, and always changing.  All it takes is one employee to become cancerous for metastasis to occur within a business. 

What businesses are susceptible to corporate cancer?

Any size business is susceptible to developing corporate cancer, yet the smaller the business the more detrimental the impact of the disease.  The smaller the business the more significant the damage due because of the nature of the organizational chart.  Within a small business each employee and owner carries more broad responsibilities than in a larger corporation.  This causes each person within the company to have a greater impact.

What businesses are susceptible to corporate cancer?

While corporate cancer can precipitate in many forms at different stages, businesses often find themselves riddled with challenges that seam to have no consistent and direct cause. If your business has one or more of these symptoms you should get an unbiased assessment.

  • Product quality decreasing
  • Customer service significantly declining
  • Tension within the workplace
  • Toxic work environment
  • Decrease in sales and revenue
  • Increase in expenses
  • HR challenges
  • Sudden loss of employees
  • Communication declining
  • Damage to brand

What Are the Causes & Risk Factors for corporate cancer?

Much like any cancer the cause of why one or more employees become cancerous to a business is not always identifiable especially if it is a personal cause.  There are two forms of causes: personal and environmental.

Personal causes are the most complex and difficult to identify.  This occurs when a member of the organization has a personal challenge that instead of dealing with, they take out their frustration at work.  Sometimes this is done consciously.  In this case the person is maliciously acting to damage the business or someone within it.  More commonly found are the uncouncious personal causes.  This is when a member of the organization is so overwhelmed with personal challenges that they are incapable of functioning to their capacity at work.  This can be anything from the executive that is overwhelmed with stress or battling general anxiety disorder (very common for executives) and becomes less effective at making good decisions to the bookkeeper who is going through a divorce and missing collections due to their mind constantly thinking about who will have custody of the children. 

Environmental causes are very common.  Environmental changes for the members of an organization can suddenly change the health of the business.  A negative change in the economy or the market can create layoffs or tightening of the ship and create a great deal of dissention or animosity among its members.  Likewise, a poor owner or manager can create a massive impact on every employee in the business.  As the saying goes people don’t quit a job, they quit a boss.  Micromanaging, dictatorship over leadership, lack of transparency, ego, arrogance, ignorance, unwillingness to work as a team, poor communication are all direct causes of environmental corporate cancer. 

Any member of an organization can cause corporate cancer, but it is up to a wise executive leadership to cure it. 

How is corporate cancer assessed?

The signs should be pretty obvious, but to identify the core requires an independent, unbiased third party to conduct primary research and interviews of the members of the organization to give a factual assessment of the core cancer.  The best benefit of the unbiased assessment of how to treat the disease and implementation being developed by an unbiased third party other than the accuracy is that there is no continuous dissension about where the decision came from.

What are the stages of corporate cancer?

Stage I – One member is creating a negative impact on the business and has not tried to seek allies. Sometimes the impact of this member is seen, but often is not.

Stage II – One or more members that are negatively impacting the business are either starting to form alliances or trying to make work difficult for other members. The business is starting to see problems and not sure of the clear cause.

Stage III – Several members have formed alliances in the business and are creating a hostile work environment for other members. The business is seeing several negative effects and responding to fires within.

Stage IV – The corporate culture is toxic and there is little to no team effort within the organization.

What are the costs of corporate cancer?

The cost of corporate cancer extreme and difficult to accurately quantify.  Direct costs can be quantified in adding the salaries and benefits of the members causing the problem with the calculations of the time and expenses necessary to find/ train a replacement.  This is only able to be calculated when it is in early stages and has not spread to other members. for an idea of a conservative estimation of the direct costs of one bad team member use a bad hire cost calculator. 

The real challenge is factoring indirect costs such as:

  • Decreased productivity due to morale impact and a change of attention from all members affected
  • Damage to the brand from the perception of customers and the market
  • Increased turnover due to members recognizing and leaving the toxic work environment
  • Sloppy work that often needs redone by other members

How is corporate cancer treated?

After an unbiased assessment has been conducted an implementation plan is developed to treat it.  This often includes firing or treating the core person(s) of the cancer.  If firing the core person, there are many details and relationships that need addressed in your plan that are unique to your business and team members. 

The next stage of treatment is to treat those that have been affected by those core cancers. This is most effectively through transparent communication that clearly communicates the goals of the business, why that person(s) was not benefiting the team, how important the health and harmony of the workplace is to the business, and how the business intends to learn and grow to prevent it from occurring again. 

Lastly implementing plans to prevent the cancer from returning.  At this point it should be very clear to your team that the health of not just the business is a high priority, but that the health of the people in the company is a high priority.  A leadership that acknowledges their weaknesses and is humble enough to work on them is one that is on the fast track to success.  A prevention plan is developed that includes more specificity within the hiring process and new, enforceable policies on how to address negatively impacting team members. No business will ever succeed without a strong team, and no team can become strong with animosity.

Corporate cancer can include anything from a culture that permits sexual misconduct (very visible today with the speak up movement) to a management that is too passive to address personnel challenges. No matter how it starts, leaving it untreated will always lead to massive downturns and eventually the business will close.

Do you think your business is developing corporate cancer?

Schedule a free 30 minute phone assessment