By
updated 7/13/2010 8:30:27 AM ET 2010-07-13T12:30:27

A friend of mine called me from a noisy airport. "I can't wait to get to my hotel and tell you the latest drama from my office," he said. "I would have called you earlier, but my boss was in the cab with me."

"Before I hear the drama itself, I have a question for you," I said. "Do you ever talk to your boss about all the craziness in your company?"

"Talk to my boss?" my friend exclaimed. "Are you nuts? I tell my boss exactly what he wants to hear. People who tell my boss what he doesn't want to hear are people who get laid off at the end of the quarter."

    1. Bad bosses: What kind are you?
    2. 30 ways to wreck your career
    3. Five ways to ensure mediocrity in your organization

The U.S. financial crisis has caused fear in the boardroom, and that unease trickles down to every worker. The principal signs of a fear-soaked senior leadership are a preoccupation with looking out for No. 1, a clampdown on consensus-building conversations, and the shunning or ousting of anyone so bold or naive as to tell the truth about what he or she believes. We've seen the fear epidemic hit dozens of major firms over the past few years, and it isn't pretty. When a leadership team's attention turns from "How can we do the right thing for our customers and employees?" to "How can we keep our stature, our jobs, and the status quo intact, at any cost?" then fear officially rules the roost.

Here are 10 signs of a fear-based workplace. If you're the person in charge of a shop, pay attention:

1. Appearances are everything. When employees are preoccupied with staying in the office later in the evening than the boss does, fear is king. When people worry less about the quality of their work than about how they're perceived by managers higher up the chain, you've got fear.

2. Everyone is talking about who's rising and who's falling. When a daily focus of office conversation is the discussion of whose stock is rising and whose is falling in the company's internal stock index, you've got a fear infestation. A preoccupation with status and political capital is a sure sign that stakeholders' best interests have taken a back seat to me-first, fear-based behaviors.

3. Distrust reigns. Would this be your knife in my back? When your employees have to stop and ask themselves, "Is it safe to tell Marybeth my idea?" you have a fear problem in your organization. Workplaces where people steal one another's intellectual capital are places where trust is subordinate to fear (if trust exists at all). If your business is one where backstabbers thrive, ditto. In a healthier shop, people would be comfortable rising up in protest against a backstabbing colleague, and the paradigm "I win when you lose" would be quickly nipped in the bud.

4. Numbers rule. Sensible performance goals help people understand what's important. An obsession with metrics, daily, weekly, and hourly, and a world view that says an employee is the sum of his numeric goals, are signs of a fear-based culture. Why? A healthy organization builds performance goals into its leadership framework, but the metrics don't equal the framework. When management views people as complex, creative, multifaceted value producers and considers metrics as just one element of a well-rounded leadership program, you can beat the fear back to a tolerable level.

5. And rules number in the thousands. Maybe the most stereotypical yet valid sign of a fear-based workplace is an overdependence on policies in place of smart hiring and common sense. These organizations fear their own employees' instinctive reactions to everyday circumstances (the need to book a business trip, order a stapler, or schedule a vacation day), so they install lengthy, tedious policies to keep employees from thinking independently. A need to tout the trust and openness in the organization constantly can be another red flag. As my friend Marla says, "The more an employer drones on and on in the handbook and other employee materials about trust, the less trusting they are."

6. Management considers lateral communication suspect. My brother worked for a major electronics manufacturer. One day, stopping in the office just before taking off to visit a remote location, he ran into some guys who had just returned from the same facility. "Let's compare notes," said my brother, and five or six team members went into a conference room to confer. Within seconds, a manager burst into the room and demanded, "Who authorized this meeting? None of you guys is at a level to authorize a meeting." Evidently sharing ideas that could benefit the company is only a good thing in this organization if you carry a certain title and salary grade. How idiotic is that? Organizations that don't allow employees to brainstorm with one another are places where fear has made inroads.

7. Information is hoarded. Closely related to the question "Can employees in my company chat freely?" is the question "How do people find out how things work around here?" If the sole answer is, "Ask your manager," you've got some creepy-crawly fear bugs on your hands. Cultures that allow people to hoard what they know to consolidate their power are cultures where fear has smashed trust under its heel. Likewise, if employees learn about a company layoff through the grapevine or in the newspaper vs. a frank sitdown with their managers and their teams, something is rotten in Denmark, and fear is a silent partner in your management roster.

8. Brown-nosers rule. When the people who get rewarded and promoted are the least-knowledgeable but most-fawning ones in the org chart, fear has come to town. Fear-based senior leaders surround themselves with yes-men and yes-women because it's more pleasant to hear the "right" answer than the truth.

9. 'The Office' evokes sad chuckles, rather than laughs. My friend Amelia writes, "As hard as the writers for 'The Office' try to make Steve Carell's character look like the world's most bumbling, officious egotist, my actual boss is worse." When cartoonish fiction looks more appealing than everyday existence to your employees, fear may play a major part. Fear shuts down our ability to think creatively, collaborate, and bring passion to the job. When getting through the day requires a focus on keeping one's head down, taking no risks, and sucking up to anyone in management, your organization's soul has left the picture.

10. Management leads by fear. When senior leaders make virtually all decisions in secret, dole out information in unhelpful drips, and base hiring on sheeplike compliance rather than energy and talent, and the PA system all but blares "Be glad to have a job, stop whining, and get back to work," your company's fear problem is off the charts. I saw an example of this myself the other day when I stopped at a national retailer to look at earrings. A sales associate mentioned to his co-worker, "Crazy thing, I broke something in my car's engine, and my mechanic says it'll be $1,400 to get it fixed." In a flash, the supervisor of the department swooped into the conversation with the message, "Lucky you've got a job, aren't you then! A lot of people are unemployed, and we've got a list of people who'd love to have your job. That's your thought for the afternoon: Lucky Me!" and off she went. When leadership is based on keeping people in the dark and keeping them off-balance, no one benefits except the tier of managers near the top who justify their existence by devising ways to solidify their stature.

Chief executives know in their hearts that smart people, set loose to solve big problems, are responsible for every success and innovation industry has ever seen. Fear-trampled employees don't do a thing for your business. Still, management by fear is a hard habit to break, because fear-whipped underlings don't squawk. Meanwhile, your competitors may be hiring your best talent away and stealing market share while you make it easy for them to do so. Those meek, submissive, broken-down employees might blossom in your rival's trust-based culture. Do you really want to find out?

Copyright © 2012 Bloomberg L.P.All rights reserved.

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.38%
$30K home equity loan FICO 4.98%
$75K home equity loan FICO 4.40%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.87%
10.87%
Cash Back Cards 16.36%
16.33%
Rewards Cards 15.93%
15.92%
Source: Bankrate.com