The Cost of Bad Leadership

Disappointment

Recently, I delivered a keynote at a Leaders in Mind event in Düsseldorf on the topic of sustainable leadership. I asked the audience what percentage of leaders actually meet expectations. The answers were frighteningly low — one person suggested that only one in a hundred leaders is truly up to standard.

Bad leadership, it seems, is everywhere.

In volatile, uncertain times, we need leaders who can respond quickly and decisively to change. Yet we have consistently failed to build lasting, high-quality leadership. At a recent HR conference, participants openly described their fatigue, disappointment, and fatalism. Jeffrey Pfeffer has rightly observed that most leaders do not display humanistic behaviour and tend toward self-interest. And indeed, climbing the corporate ladder often means playing the system and mastering the unwritten rules of organizational politics. To beat them, you must become one of them.

That sounds like despair. Should we stop trying to improve leadership altogether? What is the point of leadership education? Should we even replace leadership with something else — and if so, with what?

Let's Not Be Naïve

Leaders are asked to do many things simultaneously. First, they must steer toward results. Second, they must support their people so that those people are both able and willing to pursue those results. Third, they must ensure the organisation remains sustainable and future-proof. And fourth, they must navigate the political games and disruptions that come with any organizational role.

I tend to focus on two of these — supporting people and building sustainability. But the other two, steering and surviving, cannot be ignored.

Poor leadership often arises when a leader fixates on just one of these four functions — most dangerously, on surviving. When that happens, leadership becomes self-serving. We see this clearly in politics: politicians are tempted not to make the right decisions, but the decisions that get them re-elected.

Four Behaviors of Leadership

Leaders need to be able to support people and teams, and at the same time they need to be directive. They need to focus on strategy and future, and deal with the nitty-gritty stuff of today.

The key message is this: effective leaders attend to all four aspects and adapt their approach to the situation at hand. A leader working in a highly political or even toxic environment may be able to create genuinely healthy conditions within their own team, while still needing to operate in survival mode when dealing with senior stakeholders or a difficult board.

The challenge is ensuring that survival behaviour doesn't corrupt everything else. Leaders under pressure are tempted to take shortcuts that cause lasting harm.

This is precisely why sustainable leadership matters. Leaders need to remain conscious of how pressure, expectations, and power dynamics affect the quality of their decisions — and their own character. We should not be naïve about the realities of leadership in a volatile world, but that's no reason to stop pushing forward.

Leadership that is not grounded in human qualities — empathy, fairness, kindness, reciprocity, and the courage to remain human in an increasingly dehumanized world — will not last. One participant at the event noted that she had experienced exactly this kind of leadership in a startup, but never in the large corporation she had come from. That contrast is telling.

The Cost of Bad Leadership Is High

I have witnessed many poor examples of leadership — but also genuinely good ones. And when I talk about good or bad, I am not making a moral judgment. I am talking about impact: the effect a leader has on the people and environment around them.

Only a minority of leaders seem to achieve a genuinely balanced approach. Yet raising the overall quality of leadership matters enormously, because the cost of getting it wrong is staggering. The audience in Düsseldorf agreed unanimously. Bad leadership causes damage we can barely quantify: demotivation, high attrition, quiet sabotage, eroded trust, a toxic culture, reputational harm. Not all of this shows up directly on a balance sheet — but its effect on the viability and sustainability of an organisation is real and significant.

Leadership in Context

One uncomfortable truth is that leaders who display poor leadership can still appear successful. They may thrive in contexts that prize one function of leadership over the others. Some organisations tolerate, even reward, a leadership style that is hard on people, as long as results are delivered.

Sustainable leadership, however, requires that results are future-oriented and that all stakeholders genuinely benefit. Organisations that continue to prioritise short-term results over people will eventually pay the price. In an era of talent scarcity, people are actively choosing where they want to work — and they talk. Bad leadership doesn't just hurt morale; it damages your reputation in the market.

This gives organisations a very practical reason — beyond ethics — to invest seriously in leadership quality.

This blog was originally published on January 13, 2018 and was adapted on May 31 2026. 

After thought

In my book Sustainable Leadership*, I explore what sustainable leadership means in practice and how leaders can protect themselves from negative contextual pressures — grounding their leadership in sustainable sources rather than unsustainable ones like power, position, or popularity.