Why Tolerating Toxic Leaders Will Kill Your Business

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When it comes to managing an offsite construction company, there’s no room for sugarcoating: tolerating toxic leaders is like letting cancer fester in your organization. It doesn’t matter how skilled they are, how impressive their resume looks, or how indispensable they’ve convinced you they are. A toxic manager can and will destroy your team’s morale, productivity, and ultimately, your business.

If one of your top managers is universally hated, constantly complains, and only does the bare minimum, you’re making a colossal mistake by keeping them around. Let’s dive into why this is a ticking time bomb and what you need to do about it—now.

Toxic leaders have a ripple effect on your company’s ecosystem. Their behavior doesn’t just stay confined to their own workspace; it spreads like wildfire, infecting everything it touches. Here are the blunt facts:

They Drive Away Talent: Talented employees won’t stick around to endure a manager who makes their life miserable. Exit interviews will point to the same reason over and over: the toxic leader. When good people leave, your company loses its competitive edge.

They Kill Morale: Toxic managers create an atmosphere of dread. Employees under their command show up disengaged, perform below their potential, and simply clock in and out to survive another day. This mental drain permeates every level of your company.

They Sabotage Productivity: A toxic manager’s tendency to complain, micromanage, and avoid accountability sucks the energy out of every project. Employees waste time navigating their bad behavior instead of focusing on meaningful work.

They Tarnish Your Reputation: Word gets around. Employees talk. Former employees talk even louder. In today’s world of Glassdoor reviews and LinkedIn networking, your company’s reputation can tank in record time if you’re seen as a place that tolerates bad leadership.

You’re probably making excuses for this person. Maybe you think they’re too experienced to let go. Perhaps you’re afraid of the upheaval their departure might cause. Let’s be clear: these are excuses, not reasons.

“They’re Hard to Replace”: No one is irreplaceable. If you think they are, that’s a red flag in itself. A healthy company should never rely so heavily on one individual that their absence feels catastrophic.

“They Get Results”: Results achieved through fear, intimidation, or manipulation are not sustainable. The hidden costs—burnout, high turnover, and eroded trust—will outweigh any short-term gains.

“We Don’t Want the Drama”: Guess what? The drama is already there. You’re just sweeping it under the rug, and it’s turning into a mountain.

Yes, fire them. Not tomorrow. Not after their next performance review. Do it now. Here’s why:

Immediate Relief for Your Team: The moment a toxic manager is removed, the atmosphere changes. Employees feel heard and valued, and morale begins to recover.

Restoring Accountability: By removing a toxic leader, you send a clear message: bad behavior won’t be tolerated, no matter how high up the ladder they are.

Rebuilding Trust: Firing a toxic manager shows your employees that you prioritize their well-being over one problematic individual.

Room for Better Leadership: Once they’re gone, you have the opportunity to bring in someone who can truly inspire and lead your team. The improvement will be immediate and noticeable.

If you’re in a position where you have to fire a toxic leader, chances are your hiring and management processes need some serious reevaluation. Here’s how to avoid this mess in the future:

Hire for Culture, Not Just Skills: Too many companies focus solely on resumes and technical capabilities, ignoring the candidate’s cultural fit and emotional intelligence. A skilled jerk is still a jerk, and they’ll poison your team.

Prioritize Leadership Training: Not everyone knows how to manage people effectively. Invest in training programs that focus on emotional intelligence, conflict resolution, and team-building.

Set Clear Expectations: From day one, make it clear that toxic behavior will not be tolerated. Incorporate this into your company’s core values and hold everyone accountable.

Listen to Your Employees: Regular feedback loops are essential. If multiple employees are raising red flags about a manager, take those concerns seriously and act swiftly.

Monitor Progress: Leadership isn’t a one-and-done skill. Managers need continuous development and evaluation to ensure they’re growing with your company’s needs.

Gary’s Harsh Realities

Here’s the bottom line: being a leader means making tough decisions. Letting go of a toxic manager might feel uncomfortable, but avoiding the issue will cost you far more. A good leader protects their team, their culture, and their company’s future—even if it means making unpopular decisions.

If you’re serious about building a strong, thriving business, you need to confront toxicity head-on. Don’t wait for things to magically get better. They won’t. Take action, own the fallout, and move forward. Your employees—and your bottom line—will thank you.

Gary Fleisher, The Modcoach, writes about the modular and offsite construction industry at Modular Home Source.

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