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Best Practices in Preventing Leadership Derailment

Best Practices in Preventing Leadership Derailment

The rise of a “rock star” executive can capture the public imagination and bring positive exposure for a firm. More often, however, a high-flying executive suffers the sort of public flame-out common to actual rock stars. The result can inflict massive collateral damage to the reputation, morale, and value of a company.

How do the best companies keep leaders from “jumping the tracks” and dragging the organization into a disastrous crash? Helping key people avoid derailment is a unique talent management challenge: entirely individual, deeply personal, and with the highest possible stakes for both the individual and the organization. While there are no easy solutions, companies that excel in developing talent can offer some answers.

The Global Leadership Research Project

The results of the Fourth Annual Global Leadership Research Project offer a fresh perspective on this difficult issue. Conducted by Chally Group Worldwide, the project began with an in-depth survey of approximately 300 CEOs and senior HR leaders spanning companies from under $25 million in revenue to over $10 billion, and from fewer than 50 employees to more than 100,000.

Engaging with a sampling of these leaders directly through interviews and an online survey, Chally investigated the approaches and tools pioneered by companies committed to making the most of their own talent. One topic, seldom addressed quantitatively in the literature, was derailment.

Why do leaders fail?

Before investigating preventive measures, however, the first step is to consider why leaders derail. After all, those who reach the highest levels of leadership have been extensively vetted, tested, and proven throughout much of their career – whether at their current company or elsewhere. How do the best and the brightest go so tragically wrong?

The reasons for derailment are generally driven by underlying aspects of personality and personal behavior. These are almost as varied as the individuals themselves, ranging from impulsiveness, arrogance, and melodrama, to excessive caution, perfectionism, and mistrust.

Such behaviors are present all along. Sometimes they even contribute to success in other roles. When magnified by the spotlight of a leadership position and the stress of the job, they are often tacitly recognized and accommodated as long as things are going smoothly. Eventually, if organizational or personal crisis dials up the stress, the leader reacts by doubling down on the familiar behavior, and the situation accelerates, hurtling past the breaking point. In the aftermath, observers often say, “we saw it coming from a mile away, but what could anyone do?”

Taking action: from personal to formal 


Firms that excel at talent management do take action, proactively and preventively. Coaching or mentoring is the approach most often reported (by 21.2% of respondents) as the best practice to minimize leadership derailment. This is also the developmental activity that CEOs spend the most time on (49.4%).

However, the second tier of responses features more structured, formal approaches. These include setting clear expectations (14.4%), feedback mechanisms (13.7%), assessment programs (12.3%), and performance measurement and goal setting (10.3%).

More than a dozen other tactics, from early detection to recognition and empathy, trail off beyond these. This very broad distribution indicates that even the best-run companies have few consistent answers for the problem of derailment.


Mind the gap: managing transitions

The interview portion of the study reveals a similar diversity of approaches, as well as some common threads. In one firm, known for developing its leaders from within, minimizing derailment is a stated goal of the entire talent management effort. “We try to minimize leadership derailment by preparing leaders over time for increasingly greater levels of responsibility.” A range of techniques starting with coaching/mentoring specifically seeks to identify and strengthen any areas that could potentially derail leaders in the future.

Other firms surveyed also put particular emphasis on the risks associated with transitions upward in the organization. One mandates coaching for every newly promoted or hired executive. Others report formal transition programs of various kinds during the onboarding and promotion processes, often relying on coaching or mentoring.

Root causes: looking inward

The focus on coaching highlights the recognition that personality-based behavioral traits most often drive derailment. The core issue is not about professional skills of any kind but about self-awareness. Discussion of “self-reflection,” “self-regulation,” and “self-management” features prominently throughout the responses. Self-awareness also ranks in the top five among the traits reported as most predictive of leadership success.

This cluster of qualities lies outside the typical scope of development programs due to its very nature. As one respondent put it, “some competencies are easily acquired and highly trainable. Others, like good emotional self-regulation or integrity…are much harder to acquire or enhance.” Besides intensive coaching, other strategies commonly used to enhance self-awareness include psychometric assessment and feedback programs. However, careful screening of potential candidates for “maladaptive behaviors” as early as possible also plays a leading role, an admission that some qualities simply cannot be taught.

Staying out of the headlines: integrity and trust

Another critical trait that seems equally resistant to development revolves around integrity, honesty, and trust. Of the skills required to be a very effective upper-level manager, respondents rank integrity (46.4%) and trustworthiness (37.5%) among the top five, ahead of traits typically associated with senior leadership such as team-building and vision. (Adaptability and strategic thinking topped the list at 60.5% and 56.6% respectively.) Arguably, these qualities aren’t skills at all, but rather fundamental behaviors based on personality.

Failures of integrity certainly provide some of the most high-profile leadership meltdowns. Screening prior to promotion and coaching in previous roles may be the best options for preventing them. “Alignment with organizational values” ranks highly among criteria for hiring, promotion, and development. One company even requires an annual “corporate Integrity recertification” for executives.

Actions vs. words

Requiring integrity and trust of leaders almost seems to go without saying. Yet the frequency of reputation-destroying events in the news shows concerted actions in this area must be far more difficult than reassuring words.

One can easily infer that this is true of any attempt to identify and mitigate deep-seated aspects of personality among highly successful, powerful individuals. What seems common to companies that manage derailment well is a serious commitment to the effort, alignment with a strong organizational culture, and support from the highest levels of corporate governance, including top leaders themselves. With a clear intent and consistent follow-through, these companies can keep key people firmly on the rails and leading the company in the right direction.