Power Is the Product

Toxic Work Environment — a workplace characterized by persistent negative behavior, interpersonal conflict, and a lack of respect that harms employee well-being, morale, and productivity.

Most would say this is a byproduct of poor leadership, a flawed culture, and a permissive environment that allows dysfunction to flourish. The standard argument holds that even toxic organizations can generate profit by delivering goods or services that satisfy customers — just less efficiently than healthy ones.

I don't buy it.

If toxic organizations underperform financially, and if the conditions that make them toxic originate at the top, then profit is not their purpose. Profit is the cover story. These organizations are vehicles — self-contained structures designed to sustain the power dynamics their leaders actually want.

The people running these organizations consistently prioritize ego over execution. They may say otherwise. But study the organizational behavior closely enough and the pattern is clear: delivering the best possible product or service takes a back seat to interpersonal control and the maintenance of a toxic internal hierarchy.

This is not a radical observation. Multiple reviews and studies define toxic leadership as ego-driven, with personal agendas taking precedence over organizational well-being. Many leaders who are also majority owners or partners treat the organization as an extension of themselves — because it is.

You may be wondering: Is he really saying that some businesses exist not to generate revenue but to feed the ego of whoever runs them? That they serve as the perfect structure for personalities who crave control, who need people around them to perform loyalty, who extract the work from others while doing none of it themselves?

Yes. That is exactly what I am saying.

WeWork is my favorite proof. Co-founded by Adam Neumann and Miguel McKelvey in 2010, WeWork raised $15 million from a local developer and launched its first location in SoHo after the founders sold their previous coworking venture, GreenDesk. The pitch was community. The reality was something else. Neumann was repeatedly accused of using WeWork as his personal piggy bank — drawing loans from the company to fund his lifestyle while the firm burned money at scale. He maintained near-total control with almost no independent oversight and made decisions based on personal interest rather than fiduciary duty to the company, its employees, or its shareholders.

Working there felt cult-like. Grandiosity at the core. Heavy demands on employees. A leadership circle filled with loyalists. No decentralized command — everything flowed from the top through a layer of people whose job was to agree.

WeWork was never really about shared workspaces. That mission was the narrative used to attract capital. From 2016 through 2018, the company nearly matched every dollar of revenue with a dollar of losses — $429 million lost on $436 million in revenue in 2016, roughly $900 million lost on $886 million in 2017, and between $1.6 and $1.9 billion lost on $1.8 billion in 2018. In November 2023, it filed for bankruptcy with approximately $15 billion in assets and $18.6 billion in liabilities, including over $13 billion in long-term lease obligations.

WeWork is not an outlier. Under Travis Kalanick, Uber ran a "win at any cost" culture marked by widespread harassment and ethical scandals, while posting GAAP net losses of $2.6 billion in 2015, $3.8 billion in 2016, $4.5 billion in 2017, and $3.9 billion in 2018. At Wells Fargo, a pressure-driven sales culture pushed employees to open more than two million fake accounts to hit targets — resulting in $185 million in federal and local fines in 2016 alone, followed by billions more in penalties and settlements. At Boeing, during the 737 MAX era, a cost-cutting culture that eroded safety contributed to two crashes, an estimated $18.4 billion in losses tied to the grounding, and roughly $87 billion in investor value was erased since 2018.

The pattern is consistent. When leadership decides that the organization is primarily an extension of their ego, the rest follows. The company presents itself — to customers, vendors, and shareholders — as a legitimate vehicle for commerce. But internally, it functions as a fortress: protecting ego and status, maintaining control, and extracting short-term financial gains for those at the top.

That is what happens when people of weak character run organizations. Weak character invites greed, envy, and a lust for power. The business becomes the setting where those traits are expressed and sustained. Everyone else thinks it is about the business. For the people at the top, money is a byproduct, whether consciously or not. The real purpose — the one they would never say out loud — is power.

That is how toxic work environments are made.