5 Biggest Leadership Effectiveness Mistakes Companies Make

Everyone...from senior management to HR to consultants...love to talk about "leadership".

Yet despite the talk, many organizations fail to walk the walk

They continue operate without clarity over what the purpose of a "leader" (vs. a "manager") is.

They fail to hire true leaders as the result of antiquated, close-minded recruiting practices.

And they unsuccessfully retain the leaders they do manage to hire because of the silly view that leaders must be perfect.

This results in many companies continuing to make the same 5 mistakes that interfere with efforts to increase their leadership effectiveness.


Before I explain the definition of a leader that I provide to our clients...

let us first look at why companies often mix "manager" and "leader" up.

What is a "manager"?

I define a manager as anyone whose job it is to "manage" how the organization's resources are used.

Managers are only involved with workers to the extent that workers are viewed by that organization as a resource.

This is why some employees hold the title of manager despite not having any subordinates.

A manager's success is based on how effectively his or her chosen resource allocation accomplishes some operational goal or objective.

Managers who supervise people require authority to accomplish this and their authority comes in the form of compliance.

This allows managers to introduce consequences or punishments for employees who don't do as they are instructed.

Managers typically receive a base level of effort, engagement, and productivity from their workers at best.

Even if you don't clearly understand what a leader is, I would hope you recognize that this is not it.



The second mistake I have seen many companies make that severely restricts its leadership effectiveness is failing to understand the purpose, and therefore the job, of a leader.

What is a leader and how is it different than a manager?

The first difference is in the nature of the role itself.

A leaders job is to maximize the return on investment a company receives from its single most valuable asset, its employees.

What ultimately determines a leader's success is how effectively he or she establishes positive, productive, respectful relationships with employees...

...such that a leader receives significantly greater amounts of effort, engagement, and productivity from their workers than a managers will.

Similar to managers, leaders operate with authority...

...However their authority is derived, not from compliance, but from the natural willingness of the people to follow them

This is why I often tell rooms of managers, "only fools and gods proclaim themselves to be leaders"...

A person can only be accurately considered a leader if their people willingly follow them...

...And it is only these people who can proclaim someone to be a leader.

Interestingly...very few job postings for leadership positions include anything related to actually leading human assets, (vs. managing human resources) in the "key accountabilities" section...


This third mistake occurs at the stage of searching for, and hiring, someone new into a leadership role.

Leadership effectiveness can be defined as how well a leader gets his or her people to move past their perceived limitations and strive towards reaching some higher-level outcome or goal.

This often requires the conscious use of a combination of creativity, inspiration, and innovation.

If you want people to go somewhere they have never gone before, they need to:

  • Believe it is possible;
  • Get excited about getting there; and
  •  Not be overwhelmed by the journey.

Yet, what is the first item listed under the "qualifications" section of most management job postings? 

X years of experience in their particular industry.

While I don't dispute the value of industry knowledge or expertise, when stacking management teams with industry insiders, the same ideas, practices, and approaches are re-used over and over again.

This creates a very shallow management gene pool, if you know what I mean.

It can also be the death knoll for any hopes of gaining a competitive advantage in the industry.

And if you are thinking, "well, we subscribe to the use of best practices in what we do...", accept right now that you are contributing to the problem, not the solution.

There are a couple of problems with over-using industry best practices:

  1. Best practices are widely documented and therefore are used by every company in your industry. It is impossible to create a competitive advantage when using the exact same practices as everyone else.
  2. Once a practice becomes widely accepted as a "best" practice, those who use it have a tendency to blindly accept it and therefore never seek a better practice. The use of best practices can see innovation die.

It is for these reasons that we always encourage our clients, when recruiting new leaders, to remain open-minded and seek proven leaders from other industries.

It is these people who are best suited to introduce new ideas, new practices, and new ways of thinking to your company or industry.

What may be considered a best practice in manufacturing could be the next great innovation in software development.


Perhaps the biggest blunder companies make when trying to fill a leadership vacancy is mistaking a high degree of technical competency with a high degree of leadership competency.

The assumption that someone who is highly skilled in one area of their profession must be highly skilled in all areas of that profession is what is called fundamental attribution error.

Suppose a company is recruiting for a new CFO and they hire the candidate with the greatest accounting knowledge. This person will be a huge success right?

No. Very very wrong.

There is often a trade-off between one's technical skills and one's human skills.

This means that the more advanced their technical skills are, the more under–developed their skills will be at building critical business relationships. (Yes, there are some exceptions...)

When recruiting leaders rather than managers, it is critical to find the right balance between technical skills and human skills.

And if you are not sure where this balance lies, it is always better to err on the side of human skills because technical skills can be far easier to learn.


The first two mistakes are the result of a lack of clarity over what leadership is and is not.

The second two mistakes are the result of antiquated hiring practices and out-dated perspectives.

The last mistake results from a misguided and unrealistic expectation often placed on senior managers and c-suite officers...

That leaders don't EVER make mistakes.

This perspective, however, obstructs leaders from doing what they were hired to do...go where others haven't gone before and inspire others to follow.

When leaders run the risk of being disciplined or terminated for unsuccessfully taking a well-thought out and calculated risk, they stop taking them.

And when this happens, leaders resort to flying under the radar by doing what has always been done...

They, tragically, become managers.

To be successful, leaders must be safe to establish new ways of doing things without the fear that if, and when, they fail they will be searching for a new job.


Senior management teams, HR, and consultants...we all talk about "leadership".

Yet, when it comes to hiring leaders and setting them (and their people) up for success, companies often fail

By acknowledging these failures and honestly examining whether your company is guilty of one or more of them, you take the first step towards fixing them.

The business successes of tomorrow will be the companies that hire true leaders today and give them the freedom to do what they do best...

Create value for the organization by maximizing the return on the company's top assets...its people.

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