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Practice Management > Building Your Business > Leadership

The Do’s and Don'ts of Building Your Firm's Culture

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What You Need to Know

  • Having a positive mindset is important, but you need more than that for your leadership to succeed at creating the best culture for your advisory business.
  • It's best not to ignore employees' negative feelings simply because these emotions make you uncomfortable.
  • Instead, try listening to and encouraging others to be open to what they are feeling, both positive and negative.

Do you try to guide your organization with the power of positive thinking?

Positive mindsets are necessary in many aspects of business. But if that’s all you rely on in your leadership, then you may be guiding your team towards results that are the opposite of what you want. 

My grandfather taught me a lot of what I know about business and leadership, and his mentorship still influences how I guide advisors on leadership and culture.

One of the most impactful things he said to me was about leadership: “Be aware of people who are only negative … and only positive.”

What did he mean by this? There is a tendency within many cultures to go overboard in the pursuit of positivity, which leads to suppressing employee morale and negative emotions rather than improving them and dealing with them head on.

In the modern era, this is called toxic positivity, a deeply researched topic in human capital management. In this article, we’ll look at why you need to understand it.

What Not to Do 

Here is the easiest way to define toxic positivity: Ignoring negative feelings when they are expressed by employees, because those feelings make you uncomfortable. 

Instead of responding to the negative feelings (usually given to you in the form of employee complaints) and hearing them out, you deflect and respond with a suggestion for how the employee can “think more positively” or “look at the bright side” and/or “be grateful.” 

Instead of acknowledging the negative feelings, you give them a solution to change those feelings. And often, that solution is to be more positive.

When you do this, you are creating toxic (meaning fake) positivity in your culture. And, in doing so you teach employees that negative emotions are not allowed. When this happens, employees suppress such emotions, never resolving them and at some point you guessed it they come out in the form of turnover.

While positivity is important, let’s acknowledge that we can never understand and know positivity unless we also have experienced negativity. Having both, in moderation and balance, is one key to having great business cultures.

Problem is, when a culture is out of balance, this type of leadership prioritizes a sunny disposition instead of honesty and transparency. It often leads to employees feeling like they can’t express themselves, and while this might feel counterintuitive, overly sunny cultures will burn a culture to the negative.

What to Do

In the 1990s, Daniel Goleman published the book “Emotional Intelligence.” Originally, emotional intelligence was about the ability to control yourself, but many leaders have changed it’s meaning to apply it to how to control others through communication, which is troublesome. 

An advisory firm’s culture is developed and built on how you communicate. What you communicate is expressed in words and actions, but those words and actions create feelings in everyone you interact with. And, as you know, the only feelings we can control are our own; we never really know what feelings we are creating in others, unless they are expressed.

In learning how to better communicate, you learn that communication is about how you react and respond in different situations. Trying to communicate in a way that controls the feelings of others is what leads to toxic positivity. 

This is because you are not responding with honesty, you are responding to prevent a reaction from another person. Having true emotional intelligence, however, is about regulating your own responses and feelings, and speaking your truth in what you are communicating, no matter how you might “think” the other person will feel.

When firm owners are not confident in their leadership skills, they try to tell employees to “think positive thoughts” when they react poorly. A better solution, instead, is listening to and encouraging others to be open to what they are feeling, positive and negative and learning better methods to respond. 

When you allow your culture to be more open and accepting of all feelings, often what you find is that you are helping and showing others how to overcome some emotional (and perhaps unconstructive) reactions. In doing so, you help them create space for more positivity to evolve, without telling them to “be positive.”

Ironically, the best way to create a positive culture for your firm is to allow negative emotions to be expressed. In doing so, eventually, enough trust will be built to think much more positive.