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 formof 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.