So, what are the best ways to counter the negativity? How can you be realistic but also constructive about company problems? And how can you set boundaries between your team and the company’s turmoil?

What the Experts Say

Leading a team in an organization where communication and trust have broken down can leave you feeling powerless. The bad energy has a way of seeping into everything, threatening to contaminate your people too. But as a team leader, “you have more control and influence than you think,” according to Jennifer Chatman, dean of the Haas School of Business at the University of California, Berkeley. “In organizations that are slightly to very toxic, being siloed can actually be an advantage,” she says. “The opportunity for leaders is to focus on creating a pocket of excellence: a culture that helps buffer your team from the rest of the business.”

Don’t pretend everything is fine, says Natasha Kehimkar, CEO of Malida Advisors, a consulting firm focused on organizational effectiveness. It’s clear to everyone that it’s not. “Acknowledge the reality, and instead of trying to hide from what’s happening, focus on empowering your team and keeping your connection strong,” she says. “Focus on building something positive together and giving your team the tools and support they need to thrive despite the chaos.” Here are seven ways to do that.

Set your own standards.

First things first: You don’t need to passively accept a dysfunctional workplace. You can build something better. The key is being deliberate about your team’s culture and getting everyone involved in creating it, says Chatman. “Envision what the ideal culture looks like and work with your team to identify the practices that get you there,” she advises. Set rules for how you treat each other. Decide how you’ll work with clients. And talk about how the team should handle conflict. “Chances are, if you’re seeing the opportunity to deviate from a toxic culture, others are too,” she says.

The goal is to give your team members more say so they feel more in control. Kehimkar recommends asking your team: What do we want our reputation to be? What should we be known for? What makes us different? “Shape your team’s culture around that,” she says. “You’re not trying to prove you’re better than everyone else, but to create an intentional culture that stands apart.”

Reinforce good habits.

Once your team has agreed on how you’ll work together, you need to reinforce it in the day to day. “When people feel threatened about their future, your job is to dispel that anxiety and restore the confidence they need to perform,” says Chatman. She suggests “creating socialization opportunities and curating success stories that model the new behaviors you want to see.” If you want more collaboration, for example, share examples of team members that solved problems together and explain why it worked.

Celebrate teamwork, not just individual achievements. “People tend to resist change not because they don’t want it, but because they don’t understand what you’re really asking of them,” she adds. “The more vividly you can create clarity, the more likely it is people will take a risk and try new behaviors.”

Make sure you’re not part of the problem.

Your team is watching to see if you genuinely want to do things differently or if you’re going to fall into the same patterns. “How you behave as a leader seems obvious, but it’s not,” says Chatman. “Leaders have to be extremely tuned in and not just say they want certain changes but also model them and call out that they’re modeling them.” For example, if you say you want people’s voices to be heard but then dominate every conversation, you’re undermining yourself from the start.

Small moments reveal your intentions. When asking important questions on, say, strategy or priorities, Kehimkar advises saying: “I have a perspective on this, and I’d like to hear from you first.” This demonstrates that you care about their ideas, and you’re not just pushing your own agenda.

Be the lightning rod.

Think carefully about what you expose your team to. “As the leader, you need to be the point person for all cross-team communication and shield people from the toxicity,” says Chatman. Put simply: You get to decide how much of the organizational drama reaches them, absorbing the criticism and tension yourself to spare the team. “This is a sacrificial act,” Chatman says. You’re not blocking information; rather, you’re filtering and framing it to preserve your team’s energy and keep people moving forward.

Big challenges like layoffs and rising competition are obvious, but there’s no need for a gloom-and-doom update that has no effect on their day-to-day work, adds Kehimkar. “Keep people in the loop and don’t sugarcoat, but help them focus on the sphere they can control.”

Make impact front and center.

Your team always needs to see how its contributions matter and advance the mission, but in an unhealthy culture, you need to make that connection crystal clear, says Chatman. She recommends helping your team members see the bigger picture on multiple levels, showing how their work drives team goals, division goals, and company-wide results. “All jobs can be meaningful, but leaders need to identify that meaning and make it salient,” she says.

If the organization won’t recognize your team, make your own proof points. At one biotech firm, a team renamed their metric from “number of vials sold” to “number of patients helped” and started meetings with a patient testimonial. “People need concrete evidence of their impact, especially when the broader culture doesn’t provide that validation.”