How to Avoid Leadership Failure With Leadership Development

What are the causes of leadership failure in business, and how can we prevent and/or overcome them with leadership development programs?

By: Leadership Dynamics team


4 mins

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Bouncing back from failure. Learning from failure. Failing better. These are all phrases that have become commonplace in business as people have acknowledged the central role failure plays in their career development stories. Early mistakes are identity forming and clarifying moments for many people.

But when a company’s time, money and employee livelihoods are involved, you can’t always afford to make mistakes. Senior leaders have been hired and compensated well to make important decisions in the best interests of the business, so while learning from failure is valuable, successful leadership is invaluable.

Whether an investor, a chair, HR leader or CEO, if the success of your leadership team is your responsibility, it’s important to critically evaluate each individual on the team and the team as a whole. Identify the gaps in skills and behaviours and then optimise the team through hiring ideal candidates, or developing employees with high potential to become successful leaders.

This article will help you understand the most damaging causes of leadership failure, and detail how you can prevent them ahead of time by implementing a culture of continuous learning and development, along with tools that will help you build a resilient team dynamic.

The 5 causes of leadership failure

Prevention is cheaper than a cure. If you know why a leadership team fails, you can implement strategies to ensure long-term leadership sustainability.

This is especially important if your company has growth targets to reach, since the time spent replacing underperforming leaders or restructuring teams will cause significant delays to your timelines. In fact, in private equity, an unplanned CEO change will typically add 18 months to an investment timeline.

The symptoms of failure include unexpected leader exits, underperforming individuals and teams, missed targets and employee attrition. Here are the five most impactful causes of failures of leadership.

1. No formal learning and development

When someone is elevated to a leadership role, they can often find themselves unprepared for the new responsibilities that their expanded role brings. The time it takes to acclimatise can be the delay your business targets cannot afford. 

The key to long-term leadership sustainability is to maintain a healthy pipeline of potential leaders who can, at both long and short notice, be positioned to take over a role on a leadership team.

But how can they be ready when they don't have any experience in a senior leadership role? This is where a formal leadership development plan comes into play. By creating a culture of continuous learning at your company, you can ensure that those employees with leadership potential will be able to hit the ground running when the time comes.

2. Lack of succession planning

A succession plan will map out the positions that will likely need replacing throughout the year, because the evolution of the business shapes new requirements for each role.

By updating your succession plan every year, you can be constantly aware of upcoming leadership skills gaps and mark high-potential individuals for promotion, create a model of how the change will impact the business and map out a timeline. Likewise, continually assess your employees at one or two levels below the C-suite, and make sure they are up to date with their competencies.

Without a well-documented succession plan, you cannot know where the gaps will be, and your leadership development plan will lack focus. 

3. Dysfunctional leadership team dynamic

You might have a group of highly skilled individuals, but if they do not work well together, the team cannot be effective. Dysfunction will outweigh the benefits of their leadership skills, while the underperformance and difficult working environment may cause people to leave.

At the very worst, dysfunction in leadership can permeate throughout the culture of the entire workforce, which is not just dangerous to company finances, but to reputation and even safety. The BP oil spill disaster in 2010, which killed 11 workers, is considered a failure of leadership. The National Commission’s report labelled the primary cause as "ineffective leadership at critical times".

4. Missing competencies

The educational psychologist Laurence J. Peter's "Peter principle" states that employees are promoted based on their success in previous jobs until they reach a level at which they are no longer competent.

Without a support system to help leaders overcome those missing competencies, it becomes difficult to acclimatise to their new and challenging roles. A personalised leadership development program that anticipates the responsibilities individuals will face in their next-level roles can ease the transition. Not only for the leader, but also for the business, as it helps limit the disruption and delay caused by leadership change.

5. Lack of diversity

It's been proven that diversity in teams leads to better financial performance. Not only diversity of age, gender and ethnicity, but also education and ways of thinking – cognitive diversity.

A McKinsey study in 2019 found that executive teams in the top quartile for gender diversity and for ethnic diversity were 25% and 36% (respectively) more likely to have above-average profitability. And a study published in Harvard Business Review in 2017 found cognitive diversity to be even more important. The more diverse the thinking styles on a team, the quicker they solved problems in the study.

In our own work, we have seen that diversity in both backgrounds and behaviours are critical to the effectiveness of leadership teams. Varied viewpoints and skills bring varied solutions to problems.

How to avoid leadership failure

1. Create a leadership development plan

A leadership development program is an integral part of good succession planning. A succession plan will envision the competencies and behaviours required for the upcoming stage of the business. Once you know what and who you need, you can either hire in a fully formed candidate, or develop your employees with high potential for leadership. (You will have identified those employees using behavioural assessments.)

Remember that it can take several months to hire someone in, which is time you don't want to waste.

When creating your development plans, include a mix of:

  • Self-paced learning (usually online courses)

  • In-person professional development courses

  • Coaching and mentoring

  • Job rotations

To learn more, see our full article on leadership development planning and how building a culture of continuous learning will save you time and money.

2. Promote based on behaviours not personalities

Underpinning all of these causes, and their solutions, is how you approach the make-up and dynamic of a leadership team. To get the right people in place, you must look at their behaviours and how those behaviours influence their interactions with each other.

Behaviours tell us what a person is likely to do in a given situation, no matter their experience. So while personality traits show us "who they are", behaviours tell us "how they act".

Through our work, we have spent several years studying the link between leadership teams and business performance; we have built a model that assesses the behavioural profiles of leaders and leadership teams.

Our PACE behavioural assessment is a people analytics tool based on our learnings about which people with certain behavioural profiles work well together. You can take the test yourself for free to see a detailed analysis of your behaviours, and which other behaviours they complement.

Overcoming leadership failure

If your leadership team does succumb to any of the causes of failure we mentioned above, there are certain types of people who take it better than others.

The behaviour we most associate with a heightened ability to overcome failure is the growth mindset. In PACE, our behavioural model, those with a growth mindset score highly on Agility and its sub-behaviour "development". These highly agile and adaptable individuals see success or failure as part of an indefinite process.

There are plenty of inspirational examples of how to overcome failure. In football, Gareth Southgate missed a critical penalty in Euro 1996, but has used his defeat as fuel to strive to be better, finally becoming one of the most successful England managers of all time. In business, Steve Jobs was fired from Apple, the company he started, only to come back years later and reinvent the entire business.

Every high-performing individual needs to exhibit the ability to overcome failure. With a growth mindset and an ability to pivot when the current course is not working, leaders are able to turn a negative into a positive for their business.

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