Why good leaders fail
It is often difficult to understand why a leader with an impressive track record can suddenly and unexpectedly perform well beyond expectations. This seemingly sudden and unpredictable failure of a leader—what we call “leadership derailment”—has troubling performance consequences that organizations must recognize and manage accordingly.
Leader surprises were a pervasive problem for organizations long before the onset of the Covid-19 pandemic. It is estimated that 50% of leaders fail. That is, they were successful at first and ended up being fired. Considering the recruitment, screening, onboarding, and training costs involved in personnel changes, which in some cases can add up to three times an executive’s salary, a leader’s failure will undoubtedly have huge financial consequences for the organization. risk. Not only that, but a leader’s failure can have negative spillover effects on organizational member productivity, company morale, and reputation, especially if the leader performs well initially and is expected to continue doing well.
Although organizations suffer significantly when leaders derail, we know very little about why this happens. Not only that, but the only information we know is based on limited evidence that often blames leaders for derailment on their personalities and performance. However, it is difficult for these factors to explain all the unexpected failures of leaders, especially in light of the rising trend of derailment among leaders (mainly female leaders) during the pandemic, a change in contextual factors seems to be a more plausible explanation.
Our research provides a more comprehensive analysis of leaders’ failures, providing organizations and their employees with possible reasons for leaders’ derailment and solutions, that is, how to prevent derailment in the first place.
Don’t just blame leaders for their personality flaws
A lot of research in the past has assumed that leaders who are at risk of derailment or who have derailed often have personality flaws or their behavior is unfit for leadership roles. These studies have pointed to certain ingrained bad personality traits that can lead to failure in leaders, including bickering, arrogance, self-righteousness, aggressiveness, and moodiness. Add to this lack of self-awareness, difficulty imbuing others with trust, a habit of provoking conflict, and apathy.
There are many real-life examples of leaders who fail because their narcissistic personality either leads to low morals and self-serving behavior, or poisons the work environment. The former is like the “Enron scandal” (Enron), and the latter is like the “Uber incident” (Uber). While it is true that a leader’s personality can be a determining factor in their derailment in some cases, there are many other potential reasons. It may seem reasonable to attribute a successful leader’s derailment to personality flaws, but it doesn’t escape a cognitive bias known as the “fundamental attribution error,” which is the tendency to attribute the behavior of others to personal characteristics, while Attributing one’s actions to external circumstances. Therefore, the conclusion that leaders should always take full responsibility for their own failures is too arbitrary: blaming leaders for their personality flaws and ignoring the role of organizational environment on leaders. What leaders do, how they do it, and why they do it are all relevant to their environment.
The COVID-19 pandemic is a classic example of an external factor derailing a leader. For example, the idea of trying to work 24/7 while helping your kids with schoolwork at home quickly proved impractical. This is especially true for female leaders, who, regardless of their education or income, are seen as the mainstay of child-rearing and household chores. As a result, nearly 3 million American women will lose their jobs or leave their jobs by the end of 2020. These women were given up leadership positions and opportunities for further advancement due to circumstances that had nothing to do with their so-called negative character traits or lack of experimentation.
Don’t just focus on leaders’ performance
Many people still believe that performance appraisals are objective and impartial, believing that cognitive biases can be avoided if organizations use clear and quantifiable metrics. But in fact, it’s not. For example, we believe that leaders who have performed well in the past and continue to perform well under extreme constraints like the pandemic deserve to be recognized and rewarded. Yet research shows that when it comes to leader derailment, it’s not enough to keep performance consistent. If a leader doesn’t show upward momentum in performance, it can be seen as derailed by the organization.
During our research, we observed that changes in job requirements brought about by promotions reinforce the subjectivity of performance evaluations. As leaders move up, the corresponding requirements will naturally increase, but the expectations of organizations often remain the same, that is, performance can only go up and down. However, the real-world issues associated with taking on a new role are less discussed, including the need for leaders to adapt to new teams, take on new responsibilities, and acquire new skills.
That said, for many leaders, it is natural that they will not be able to demonstrate higher business competencies due to the time it takes to learn and adapt to new roles. Even when newly promoted leaders perform well, organizations often complain about the rate at which they are improving.
Go back to the case of women leaders who were derailed during the pandemic and see how organizations are responding to changes in job requirements. In the healthcare sector, for example, the increased workload and increased urgency of work require extended working hours. Nonetheless, performance expectations related to the number and length of shifts remain largely unchanged, aside from the introduction of flexible schedules and temporary measures such as unpaid leave. However, while recording these hours of work, the “wartime” work conditions in which the leaders were working were ignored. With the death toll in the U.S. surpassing half a million in early 2021, health care workers are still being asked to provide the highest quality of care in a situation where pressures such as increased workloads have caused severe psychological trauma. The result is that a significant number of female leaders leave related fields such as health care because these fields are unwilling or unable to adjust to changing contexts when evaluating leader performance.
How to keep leaders from derailing
Generally speaking, especially in times of crisis at home and abroad, it is not the best way to eliminate some unqualified leaders based on character traits. In fact, most current selection mechanisms that focus on the character traits of leaders favor people who are confident and brave, but that confidence can turn into arrogance, and bravery can turn into recklessness. By the same token, focusing solely on the performance of leaders and ignoring the dramatic changes in background requirements is not, in our view, desirable.
We believe organizations should focus on the following four areas to prevent leaders from derailing through early identification and more effective support systems. These four areas represent different types of needs that leaders often face in their roles.
Role Requirements The longer a person is in a leadership role, the fewer opportunities for training and development that are relevant to a particular role and commensurate with one’s own level. Likewise, while organizations often put a lot of effort into making sure employees’ personality traits match their environment during the recruiting phase, for mature leaders, organizations equate their high performance with a high degree of fit. Organizations are unlikely to critically assess the ability of a successful leader to adapt to a new work context.
To address these challenges related to role demands, organizations should consciously and explicitly provide and normalize training and development opportunities for leaders as they do new employees or mid-level employees. In fact, considering the risks that leaders’ derailment brings to the organization, their training and development in this area should be strengthened. Furthermore, while it is common practice for organizations to conduct regular performance reviews of their leaders, it needs to go a step further by regularly assessing a leader’s work background. Doing so can help organizations be more proactive in anticipating the contextual factors that ultimately derail leaders.
Team Needs When leaders’ role changes involve changes within the team, they face the challenge of maintaining a fit between themselves and their team members. For example, conflicts arising from differences in personality or work style can lead to a decline in team performance, and they can become scapegoats even if the situation arises out of the leader’s control.
Furthermore, even if a high-performing manager still performs well in a new leadership role, that performance is often overlooked if their colleagues are also doing reasonably well. In this involution, outperformance is the norm and may even be considered average.
To help leaders familiarize themselves with their new teams and new performance expectations, organizations should provide peer feedback. In addition, organizations should strengthen cross-level communication and collaboration by promoting strategic meetings and team building to support new leaders.
Organizational Needs When major organizational changes, such as mergers and acquisitions, result in strategic planning adjustments and personnel changes, leaders are often responsible for ensuring a smooth transition for their employees. Faced with this situation, employees need time and resources to adjust to the various changes that may occur, and so do leaders, but their demands are often ignored.
At the outset, organizations need to ensure that leaders are involved in organizational change programs, which, after all, involve leaders themselves and their employees. Organizations can use organizational climate and employee engagement surveys to identify problems when performance requirements and performance priorities change. Leaders themselves also need sufficient support, ample time, and abundant resources to make necessary adjustments to their roles.
External Environmental Demands When leaders face difficulties outside their roles, teams, and organizations (such as caring for an aging parent or providing financial support for an unemployed family member), they need workplace resources to adequately address these needs. Lower-level employees often have more room to adjust and buffer, and they can be flexible with their schedules or delegate responsibilities to others on an ad hoc basis. By contrast, leaders often lack the ability to use such resources. There is always a tacit belief that leaders can handle any external challenge without interruption.
Organizations should proactively provide leaders with rear support that they can rely on when needed, just as they do for lower-level employees. Dealing with pressing issues is often unavoidable and time-limited, and flexible working hours may help leaders cope with changes in their personal lives. In addition to this, other forms of support include: creating an additional leadership reserve team to temporarily take over the responsibilities of the current leader; holding meetings of colleagues to promote the mental health of the leader; and mandating time off. These are all ways to help leaders restore energy while being flexible about shifts and routines during their vacations. More importantly, organizations need to normalize leaders’ ability to rely on such support, preventing them from being unfairly punished when they need to seek help or make adjustments.