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Leadership Assessment: One Reason Your Leaders Will Fail

August 13, 2013

Imagine you have an employee who is consistently receiving good performance reviews, meeting all his/her goals, and showing up on time everyday for work.  This employee has been with the company for 5 years now and has proven to be very effective in his/her current role.  This employee sounds like the perfect person for promotion into a leadership position, right?  Well, not so fast …  Oftentimes these star employees will be promoted to leadership positions based on their current performance and, once in the role, will not be successful.  In other words, these leaders derail.


What is leader derailment?

Leader derailment occurs when leaders fail to reach their expected level of achievement as a result of being transferred, demoted, or removed from their position.  Essentially, leader derailment involves leaders not reaching their full potential as determined by their previous excellent work history.  While leader derailment is pretty complex, one of the major reasons for its occurrence is that skills and competencies needed across positions and leadership levels may differ.  As in the example above, one of the employee’s strengths—executing work—was essential to performance as an individual contributor.  However, in a leadership position, execution may take a back seat while strategic thinking and leading others may come to the forefront.  However, since these competencies were not essential for the previous role, there was no way of knowing whether the employee would excel or fail at these competencies by only looking at his/her performance review.  Therefore, these possible weaknesses were hidden in the previous role.

Is this really a big deal?

Yes, it is!  Around 50% of all leaders fail … and we are readily reminded by this in the news of leader and CEO failures and bad decisions.  Leader derailment can have a huge impact on the organization.  Not only is it a big financial burden when taking into account the costs of selection, recruitment, on-boarding, and training, but it can also disrupt employee morale and public perceptions of the organization.  In particular, leader derailment and the relationships these leaders have with their subordinates may trickle down to influence the subordinate’s motivation to stay with the company.  One of the biggest reasons why employees leave their current organization is because of their relationship with their manager.  As such, leader derailment may also influence turnover issues at the individual contributor level.

Ok … so it’s a big deal. What can we do about it?

The probability of leader derailment can be reduced through two distinct yet related processes: selection and development.  First, good selection systems can focus on the competencies that are necessary to be successful in leadership roles.  They take into account what’s needed to be successful in the  leadership role for which someone is being considered as a potential for promotion, as opposed to what’s important in their current role.  Intrapersonal qualities, such as self-awareness and integrity, are particularly important because insight of their own errors can prevent overconfidence, a common problem of derailed leaders.  Social skills and empathy are necessary for building relationships with colleagues and key stakeholders.  The ability to navigate and understand the business realm is critical for decision-making.  All of these skills, among others, relate to the importance of leadership skills: the ability to effectively staff, direct, and motivate others.  Derailed leaders often lack self-awareness, have difficulty working and communicating with others, are unable to think strategically or deal with ambiguous situations, and fail to recognize talent in others.  Strong selection systems that focus on these core intrapersonal, interpersonal, business, and leadership skills are better able to identify those least likely to derail once in a position of leadership.

Another way to prevent leader derailment is through development.  By taking a leadership assessment and creating a developmental action plan using the assessment data, efforts can be focused on identifying, understanding, and combating derailing tendencies.  Becoming more aware of one’s strengths and areas for development is the first step in ensuring progress and success in one’s role.  Based on the insight report, goals can be set to target developmental opportunities towards building one’s weaknesses to better prepare for the road ahead.  While leader derailment cannot entirely be prevented, the likelihood can be reduced by taking these simple steps.

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Alissa Parr, Ph.D. Alissa Parr, Ph.D. is a Senior Consultant at PSI. Her areas of expertise include the development, implementation, and evaluation of assessment processes. Alissa has experience managing entry-level through executive level assessment and selection efforts across a number of different industries including government, financial, military, education, healthcare, and manufacturing.