The Three Most Common Causes of Leadership Failure in Companies

Ryan Gottfredson

by Ryan Gottfredson

Across my experience working with leaders across all levels within an organization, there are three causes of leadership failure that pop up more than others.

In this article, I want to share those causes with you. But, what I believe is most interesting about these three causes is that they all share the same root. And, knowing this has powerful implications for more effectively developing our leaders.

Common Cause #1 – Environmental Complexity > Leader’s Complexity

When leaders fail, it is common for them to point to the difficult environment they operated within. They generally aren’t wrong, but the reason for their failure was not simply their complex environment.

The reason for their failure was that they did not possess the personal complexity to match or exceed their environmental complexity.

Here is what I believe: Every situation is navigable, no matter the difficulty. But, the only way a leader is going to effectively navigate their situations is if their person complexity matches or exceeds the complexity of their situation.

Something to consider is this: people vary on at least four different types of complexity:

In light of this, here are two questions to consider:

  • What form of complexity do you possess the most/least?
  • What form of complexity do your leaders possess the most/least?

Common Cause #2 – Low Emotional Intelligence

From my experience, when a leader missteps in their leadership, at least 80% of the time it can be tracked back to a lack of emotional intelligence. Specifically, they struggled with at least one of the four primary components of emotional intelligence:

Improving Emotional Intelligence Chart

For example, a common leadership misstep is micromanaging. Why do some leaders micromanage? It is ultimately because they struggle with:

  • Self Awareness – They aren’t aware that they possess a limiting belief that “if they don’t step in, then it won’t get done right.”
  • Self Management – They struggle to regulate their fear of things not going right. They have a narrow window of tolerance for failure, mistakes, or problems.

While the lack of self awareness and self management helps them to feel more safe and in control, their micromanagement ultimately results in collateral damage to the people they lead and the culture they operate within.

Common Cause #3 – They Hold Too Tightly to the Past

I have used my Personal Mindset Assessment with hundreds of different groups of leaders, and the most consistent finding that I observe is that most leaders have a fixed mindset.

In fact, I generally find that over 60% of leaders in an organization have a fixed mindset.

One of the primary reasons why so many leaders struggle with a fixed mindset is because they feel a lot of pressure to look good, so their bodies and mindsets become wired to avoid failure.

Here is why this is so problematic: When a leader is focused on looking good and avoiding failure, they are only willing to do something that they are certain will work. This means that they generally hold on to using the “proven formula of success.” But, here is the reality, what worked best in the past, generally isn’t what will work best in the future.

Thus, leaders with a fixed mindset tend to hold too tightly to the past and are reluctant to try new approaches, processes, strategies, or directions that might be better suited for their future.

What is ironic is that the leaders who are most afraid of failure are the ones who fail the most.

The Three Common Causes Share the Same Root

There is an underlying root cause to three common causes of leadership failure: Operating from a low vertical development altitude.

What vertical development experts have learned is that leaders generally operate from one of three vertical development altitudes, each signifying the quality and sophistication of the leaders internal operating system (i.e., the degree to which their body is wired for value creation as opposed to self-protection):

  • Mind 1.0 – Leaders here possess an internal operating system wired for safety, comfort, and belonging. 7% of executives operate at this level.
  • Mind 2.0 – Leaders here possess an internal operating system wired to stand out, advance, and get ahead. 85% of executives operate at this level.
  • Mind 3.0 – Leaders here possess an internal operating system wired to contribute, add value, and lift others. They are willing to not stand in or not stand out in order to create massive value. 8% of executives operate at this level.

The reality is that 92% of leaders have enough deficiencies in complexity, emotional intelligence, and fear of failure that it significantly disrupts the quality of their leadership.

And, if leaders want to rise above these deficiencies, it is going to take different development efforts than what is traditional: Horizontal Development (improvement of knowledge, skills, and abilities).

What is needed is Vertical Development, which involves development efforts to help leaders upgrade their internal operating systems.

What’s Next?

If you recognize any of the common causes of leadership failure in your leadership or in the leaders in your organization, I would love to help you employ vertical development to help you or your leaders elevate to operate as Mind 3.0 leaders. Connect with me here.

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