Why Good Leaders Fail

Leadership failure is a significant financial and reputational risk for organizations but can be prevented with the help of early detection and better support systems.

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It is often hard to understand why a leader with a track record of success would — poof — suddenly and unexpectedly fail to meet expectations. This seemingly abrupt and unpredictable form of leadership failure — which we refer to as leader derailment — can be a vexing performance outcome for organizations to both understand and manage.

Even before the pandemic, unanticipated leadership failure was a widespread issue among organizations, with an estimated 50% of leaders failing (meaning that half those who are initially successful will eventually be fired). Leadership failure has long posed a significant financial risk to organizations, given the costs of recruiting, selecting, onboarding, and training replacement leaders — costs that can add up to three times an executive’s salary, in some cases. Leadership failure can also have negative spillover effects on the productivity of other members of the organization, as well as on the company’s morale and reputation. This is especially true when leaders were successful early on and were expected to continue performing at a high level.

Despite the significant losses that organizations face when a leader derails, we know surprisingly little about why it happens. Worse yet, the little we know is based on limited evidence that often attributes derailment to the leader’s personality and performance. However, these factors hardly account for all incidents of unexpected leadership failure. In particular, looking at the increasing rate of derailed — mostly female — leaders during the pandemic, it appears that changes in contextual factors might better explain why leaders fail.

Our research provides an expanded view on leadership failure, offering organizations and their members possible reasons why a leader might careen off course and, more important, how to prevent these derailments in the first place.

The Problem With Blaming a Leader’s Personality

A fair amount of past research has assumed that leaders who are at risk for derailment — or who have already derailed — possess personality flaws or engage in behaviors that are ill suited for leadership. This past work alludes to ingrained personality traits that are undesirable and likely to lead to failure. Such traits include argumentativeness, arrogance, egocentrism, aggressiveness, and volatility. Other characteristics that have been associated with leader derailment include a lack of both self-awareness and trustworthiness, as well as conflict seeking and aloofness.

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Comments (2)
Candice Gottlieb-Clark
Excellent approach to the on-going issues faced by leaders. As a leadership consultant, we are frequently educating our prospective clients about the importance (and necessity) of truly investing in their leaders.  I believe a study that can reveal more data on the ROI would be of help here.
Anonymous
Read carefully with great appreciation and interest.   And congratulations to Professor Hernandez on her appointment to the U of Mich.
Stuart R.