Wharton dean explains how bad bosses can create ‘rifts’ in culture

Leonardo Rasaki

The Great Resignation and the stresses of the pandemic have highlighted the importance of a healthy work culture, but one business school dean says poor leadership can create “rifts” in organizations.

On a recent episode of “Influencers with Andy Serwer,” Erika James, the dean at Wharton, the University of Pennsylvania’s business school, explained how bad bosses hurt company culture.

“There are people in the world who pay more or less attention to the people that make up an organization,” James told Yahoo Finance’s editor-in-chief. “And when there is inadequate attention on the human capital, then I think you’ll start to see rifts in the culture and you’ll start to see some problems that make it difficult to achieve your ultimate goal, which is profitability, success and sustainability.”

James, who last week published a book called “The Prepared Leader: Emerge from Any Crisis More Resilient Than Before,” co-written with Lynn Perry Wooten, president of Simmons College in Boston, says problems in workplace culture often emerge when a new boss replaces an old one.

“If a new leader comes with something else and completely uproots what the prior leadership was focused on, then you’re going to start to see sort of a challenge with stability in the culture,” James remarked.

Evidence suggests that leadership plays a critical role in workers’ happiness. Goodhire, a provider of employment and background screening services, recently surveyed 3,000 US workers across 10 industries and found that over 80% of those surveyed said they might quit their job if they had a bad manager. Meanwhile, nearly 90% of health care workers surveyed said they would quit their jobs because of a poor manager.

Despite looming fears of a recession, managers are still likely wary of losing workers. A record-breaking 4.5 million Americans quit their jobs just last March.

“While every new leader does have the right to put in place his or her own new ideas and initiatives, it really is about finding out what is core to the employee base in terms of how they will work together and what they value as an organization,” James affirmed.

In addition to strong leadership, employees place a large premium on a company culture. For instance, around 72% of senior managers report that culture drives change and 69% of leaders of companies that adapted during the pandemic said their culture gives them a competitive advantage, according to a 2021 survey of 3,200 leaders and employees worldwide by PricewaterhouseCoopers.

“It’s the leaders’ responsibility to ensure that in the context of his or her priorities, they’re engaging in behaviors that are consistent with the desired culture,” reflected James.

James joined Wharton in 2020 and led the school through the worst of the pandemic, guiding the faculty as it taught classes virtually. Previously, she served as dean at Emory University Goizueta Business School and at the Darden School of Business at the University of Virginia.

Before becoming an administrator, James served as a renowned professor and researcher in the fields of management and leadership. At the University of Virginia, she taught courses on leading organizations and crisis leadership. Previously, she earned her B.A. in psychology from Pomona College and her M.A. and PHD in organizational psychology from the University of Michigan.

The Wharton School has 1,784 MBA students, and unlike many business schools, also has 2,617 undergraduates currently enrolled, according the university’s website. The U.S. News & World Report currently ranks Wharton the No. 1 business school in the country, tied with the University of Chicago.

Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter at @CrollonPatrol.

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