4 Warning Signs That Your Organization is Failing

Can leaders make a difference and save your organization?

Organizations very often fail because of poor leadership. Poor leadership can range from toxic bosses to leaders with poor skills, to neglectful ones who fail to provide the necessary leadership.

How can we tell if our leader is guiding our organization toward disaster?

1. The Incompetent Leader. Leadership does indeed matter in organizations, and it takes certain competencies to be a successful leader. Think of the TV show, The Office, and its clueless leader, Michael Scott. He makes poor decisions, lacks interpersonal skills, and often doesn’t understand the difference between right and wrong. Why are there so many incompetent leaders? There are many reasons. Many companies do a poor job of selecting leaders. Instead of focusing on competency, many are promoted to leadership position due to longevity or loyalty. That was the notion behind the “Peter Principle”—the idea that in traditional organizations people will rise to their level of incompetence because we reward workers for seniority (assuming that the longstanding employees have learned the skills to lead).


Antidote: Organizations need to promote only those with proven leadership skills and train leaders well.


2. The (Good) Rats are Leaving the Ship. High rates of turnover, particularly if those leaving are talented and experienced employees, is a key indicator of a failing organization. The causes of turnover can be many—a toxic organizational culture, poor leadership, non-competitive compensation, and other factors.


Antidote: Leaders need to heed the warning signs and figure out what is wrong. A first step is conducting exit interviews, or anonymous surveys of employees, to understand why good employees are leaving. The next step is to use that information to take corrective action.


3. The (Bad) Rats are Running the Ship. What do I mean by “bad rats?” This is when an organization allows abusive supervisors and bullies to go unchecked. Why would they do this? Often it is because either the “rats” have some sort of control or have the support of higher-level leadership. Leaders all too often overlook abusive and bullying behaviors in employees because they are viewed (rightly or wrongly) as contributing to the bottom line. Meeting departmental or organizational goals by abusing employees to get there is a sign of a deteriorating organization.


Antidote: Top-level leaders need to make sure that the organization is not inadvertently supporting abusive supervisors. There should be a zero-tolerance, no-bullying policy in place in all organizations.


4. Leaders are Constantly Putting Out Fires. When leaders are always running around trying to solve problems—particularly problems that should have been anticipated beforehand—it is a sign of bad leadership and a failing organization. In the Full Range of Leadership Model, this is known as Passive Management-by-Exception—leaders wait until there is a problem before taking action and trying to solve it. Often it is too late.


Antidote: Good leaders are proactive. They engage in strategic planning and engage others in that process so that goals and objectives of leaders and followers are aligned, and so that potential problems are anticipated and dealt with before things get out of control. Good leaders work with all organizational members to keep the organization moving ahead in a positive direction. Again, having the right people in positions of leadership (and the right followers on board) is the key to success.


Originally published at Psychology Today