Why Good Leaders Fail

By Morela Hernandez, Jasmien Khattab, and Charlotte Hoopesj
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.

There are many real-life examples of leaders failing because their narcissistic traits result in unethical, self-serving behaviors (for example, Enron) or a toxic work environment (for example, Uber). And although in some cases a leader’s personality can indeed be the determining factor of their own derailment, there are numerous other potential causes. Although it is tempting to attribute the demise of successful leaders to their character flaws, humans are susceptible to a form of cognitive bias known as the fundamental attribution error — a tendency to attribute other people’s actions to individual traits and our own behavior to external circumstances. Therefore, concluding that leaders are always solely responsible for their failures might be premature. The problem with blaming a leader’s personality is that it ignores the role that organizational context plays in explaining what leaders do, how they do it, and why.

Case in point: The pandemic has offered vivid illustrations of leader derailment due to external factors. For instance, the idea of home-schooling children while at the same time attempting to work a full (uninterrupted) workday quickly proved untenable. This circumstance has been especially challenging for women leaders who — regardless of education or income — are (still) expected to take on the lion’s share in child care and housework. The result is that by the end of 2020, “nearly 3 million American women have lost their jobs or left the workforce.” These women are turning away from leadership positions and further advancement due to contextual constraints rather than any type of “dark” personality trait (or for lack of trying).

The Problem With Focusing Just on Performance
An illusion of objectivity in performance evaluations persists. We want to believe that if organizations use explicit, quantifiable metrics, they can rid themselves of perceptual pitfalls. For instance, we might assume that given the extreme contextual constraints of the pandemic, a previously high-performing leader who continues to display consistent and strong performance should be perceived favorably. When it comes to leader derailment, however, research suggests that consistency in performance is not enough. Rather, leaders can be perceived as derailing in the eyes of their organizations if they do not demonstrate an upward trend in their performance.

In our work on this topic, we have looked at how changes to job demands, which typically accompany leadership advancement, can fuel subjectivity in performance evaluations. As leaders ascend to higher positions, the demands that correspond to their roles naturally increase. Yet even in the face of increased demands, organizational expectations often remain unchanged: An upward trajectory is the bar. There is little mental accounting for the associated realities of stepping into a new role, which typically include the need for the leader to adjust to a new group, assume new responsibilities, and gain new skills.

In other words, for many leaders, their ability to perform at ever higher levels naturally slows as they spend time learning and adjusting to their new roles. Yet organizations often still perceive this “reduced increase in performance” negatively, even if their recently promoted leaders are performing well at their new responsibilities.

Returning to our pandemic example regarding the derailment of women leaders, consider how organizations have responded to changes to job demands. In the health care field, for instance, the increased amount and urgency of work has translated into an increased need and demand for more work hours. Nevertheless, beyond stopgap measures such as flexible schedules and unpaid leaves of absence, performance expectations tied to the number and length of shifts remain largely the same. What’s been ignored are the warlike conditions in which these hours have been logged; with the number of deaths in the U.S. exceeding 500,000 in early 2021, health care workers have been expected to deliver the highest quality of care in a context in which increased workloads and other pressures have exacted a significant psychological toll. The result: Leaders, many of them women, are leaving health care and other fields that have been unwilling or unable to adjust for the context in which leader performance is evaluated.

Preventing Leader Derailment
In general, but especially during crises that may compound external forces, trying to weed out bad leaders by focusing on their personality traits is not a successful strategy. (In fact, most of our current selection mechanisms that involve personality actually favor selecting leaders with the kind of confidence that can turn to arrogance and the kind of boldness that can lead to impulsiveness.) Concentrating purely on performance while ignoring the dramatic changes in leaders’ contextual demands, we argue, is also an unsuccessful strategy.

Instead, we see four areas where organizations should focus to prevent future derailment through early detection and better support systems. Each area represents a different type of demand that leaders often face in their roles.

Role demands. Paradoxically, the further an individual progresses along a leadership trajectory, the less likely that leader is to receive role-specific and level-appropriate training and development. Similarly, while organizations often expend significant effort to ensure fit between characteristics and context for employees at the recruitment stage, fit is often conflated with an established leader’s history of high performance. Organizations are less likely to rigorously evaluate historically successful leaders specifically for fit in new or changed contexts.

To counter these role-related challenges, organizations should be just as intentional and explicit about identifying or formalizing training and development opportunities for leaders as they are for entry- or middle-level employees. Indeed, given what is at stake, they should be even more intentional and explicit. Furthermore, while regular performance evaluations for leaders are common, organizations need to go a step further and regularly evaluate the context in which the leader operates. Doing so can help organizations more proactively anticipate contextual factors that could ultimately lead to future derailment.

Team demands. When a leader’s role changes enough to involve shifts within a team, challenges can arise in establishing or maintaining fit with and among team members. Conflicts due to personality differences or conflicting work styles, for example, can result in reduced team performance that, even if outside the leader’s control, may nevertheless be attributed to the leader.

Moreover, even when high-performing individuals continue to operate well in their new leadership roles, their strong performance can go unnoticed if their peers are also doing well. In such instances, high performance is the norm and might even be seen as average performance.

To support leaders in familiarizing themselves with their new teams and their new performance expectations, organizations should provide peer-level feedback. Additionally, they should support leaders by facilitating strategy meetings and team-building to enhance cross-level communication and collaboration.

Organizational demands. When significant organizational changes such as mergers and acquisitions occur and generate shifts in strategic vision and personnel, leaders are often charged with ensuring a smooth transition for the employees they supervise. It is understood that employees need time and resources to make adjustments to the myriad possible changes that can occur under such circumstances. It’s also true that leaders themselves need time and resources to adjust — something that is often overlooked.

As a starting point, organizations need to ensure that leaders are involved and invested in the organizational initiatives that will result in changes for them and the employees they oversee. Organizations can use climate and engagement surveys during periods of changing performance requirements and priorities to detect trouble spots. Leaders themselves also need adequate support, time, and resources to make necessary adjustments in their own roles.

External environmental demands. When leaders face challenges external to their roles, teams, and organizations — such as in their personal lives, when faced with caring for an aging parent or supporting family members who have lost their jobs — they need resources in the workplace to be able to adequately cope with these demands. There is often more slack and redundancy, however, among rank-and-file employees that allows for adjustments such as flexible scheduling or the temporary shifting of responsibilities to others. Leaders often lack the ability to use such resources and are implicitly expected to cope with any external challenges that arise without disrupting their work routines.

Just as they often do for rank-and-file employees, organizations should proactively identify backup supports that leaders can draw upon when needed. Flexible work hours might help leaders cope with changes in their personal lives, although pressing issues are often time-sensitive and unavoidable. Other avenues of support — such as building a bench of other leaders who can step into roles temporarily and amenably, peer-level meetings that can help support mental health, and enforced vacation time — can help recharge a leader’s energy while exercising flexible role-shift structures and routines in the leader’s absence. Importantly, organizations need to normalize the ability to draw on these supports so that leaders are not unfairly punished when circumstances necessitate seeking assistance or adjustments.

Morela Hernandez is an associate professor of business administration at the Darden School of Business at the University of Virginia (@dardenmba). As of August 2021, Hernandez will be a professor of public policy and business administration at the University of Michigan. Links to Hernandez’s work are at https://morelahernandez.com. Jasmien Khattab is an assistant professor at the Rotterdam School of Management at Erasmus University Rotterdam. Links to her work are at https://jasmienkhattab.com. Charlotte Hoopes is a postdoctoral scholar at the Darden School of Business. Links to her work are at www.charlottehoopes.com


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