When Good People Do Bad Things: The System's Role

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In my teens, I played for an elite basketball team led by a harsh, uncompromising coach who tolerated no errors. His adult authority over us teenagers created a severe power imbalance. His aggressive approach—constant yelling, player manipulation, and verbal abuse—became our team's blueprint for success. Previously kind teammates transformed into bullies. Our locker room culture devolved into ruthless trash-talking and toxic competition. I dreaded practice despite loving basketball. This hostile environment did drive performance temporarily—mostly from fear of criticism—making us a top-two team. After two years, though, the toxicity reached breaking point. Players fought constantly. Several quit the team or basketball entirely. Our once-promising squad disintegrated. Several potential NBA prospects had their confidence destroyed, wasting remarkable talent. We won trophies, but sacrificed sustainable long-term success.

This is what we will explore today - how to better understand toxic, unethical systems (organizations), in order to know what to do to exercise leadership even within that environment.

🤔 Why Systems Matter More Than You Think?

Let's unpack some key leadership lessons from that team—and from countless other environments that look successful on the outside, but are quietly eroding from within.

1️⃣ Leaders Shape the Environment 

Leaders don't just make decisions—they shape norms. Our coach's aggression wasn't just a personality trait. It became a culture. And culture is contagious.

2️⃣ Toxic Systems Normalize Bad Behavior

Even the nicest players started bullying. Why? Because when cruelty gets rewarded, people adapt. Systems teach us what's acceptable—often more powerfully than values statements or posters on the wall.

3️⃣ Short-Term Wins Can Hide Long-Term Losses

Yes, we won games. But we burned out, fell apart, and lost great talent. The same is true in toxic workplaces: hitting goals while quietly bleeding people, trust, and long-term capacity.

4️⃣ Psychological Safety Drives Performance

Without a culture where people feel safe to speak up, problems fester. Innovation dies. Collaboration suffers. People check out—or drop out.

5️⃣ Ethical Leadership Is a Long Game

Sustainable success comes from building trust, encouraging dissent, and rewarding integrity—not just output.

😈 Bad Systems Beat Good People

Here's the hard truth:

Even people with strong values can be worn down by unethical systems:

• A parent must decide whether to bribe a doctor for a child's urgent surgery in a corrupt system, despite their law-abiding nature.

• A junior employee stays silent about wrongdoing because the last person who spoke up was fired.

What would you do in these situations? Either choice leads to potential harm. In the first case, if a parent bribes to save their child's life, they become someone capable of bribery. They will rationalize it—and understandably so. Little by little, this becomes their new normal.

When we force people into moral conundrums, we corrupt not only their moral foundation, but also that of the entire society.

The question must shift from "what is the right thing to do" to "what went wrong to even put people in that situation?"

These aren't personal failures. They're system failures.

That's why ethical leadership means more than being a "good person." It means designing better systems. Systems that don't force people into impossible trade-offs.

🔄 Long-Term Effects That Will Sound Familiar

Organizational structures—team formation, power distribution, rewards, and punishments—shape behavior and culture more powerfully than personal values. Over time, these systems either elevate or erode integrity. For example, in a system led by someone who rejects criticism and demands loyalty, compliance quickly becomes more important than competence. Those who stay silent get promoted; those who speak up get pushed out. In the short term, this creates fear and dysfunction. In the long term, it leads to negative selection—where only those willing to conform remain, and ethical or competent people change or leave.

Now think of a team, organization, or country that has maintained an unethical system for years or decades. Can you imagine how deeply embedded these norms become, and how much negative selection has occurred over time? Rebuilding from that kind of misalignment is hard—but essential. Leadership means naming the systemic pressures people face and then mobilizing collective action to realign the system toward trust, fairness, and shared accountability.

Embarking on this journey solo is not an option! First, gather allies who share your vision, forming a united front. Then, extend your hand to those who stand in the middle ground, bridging gaps and building understanding. Only then, with a strong coalition behind you, should you approach those who hold opposing views, ready to engage in meaningful dialogue.

🤳 Self-Reflection Prompt

Take 5 minutes to consider:

🤔 Where in your current system—team, organization, or community—are people forced to choose between "doing well" and "doing the right thing"?

❓ What actions have you taken that don't align with your personal values, but made sense within your organizational context?

🔍 When was the last time you rationalized a decision because "that's just how things work here"?

✅ Action Item for This Week

Have one open conversation this week with your team or peers about a norm or pressure in your environment that might be unintentionally unethical.

Frame it with curiosity, not blame. Ask:

What do we reward here? What's going unspoken? What do people feel pressured to hide or tolerate?

🔥 Final Thought

Ethical leadership isn’t about being perfect. It’s about designing systems that help people do the right thing—even when no one is watching. It’s about refusing to let your team end up in impossible moral trade-offs. And it’s about modeling the courage to rebuild when those systems fall short. Systems shape behavior. And leaders shape systems.

🔗 Want to Go Deeper?

Here are four great resources to explore this further:

🎧 Podcast – Adam Grant’s “WorkLife” episode: The Problem with All-Stars - Explore how strong systems—not just star performers—drive success.

📺 TED Talk – Drew Dudley’s Everyday Leadership - A powerful reminder that leadership is about the small systems we influence daily.

📄 Article – Harvard Business Review: Courage as a Skill - Insight into how to foster ethical courage within organizational life.

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