Signs Your Company Is Experiencing Leadership Loss And What to Do About It

Most companies don’t recognize leadership loss until it’s too late. They look at turnover rates and assume everything is fine if people aren’t leaving in droves.

But just like a doctor diagnosing illness, the visible symptoms (turnover) are often preceded by deeper, less obvious warning signs. And when these early signs are missed or ignored, companies lose leadership long before someone actually walks out the door.

Turnover is just the final symptom of a deeper issue. The real damage happens long before employees quit—when they mentally check out, disengage, or burn out because they see no real path forward.

This is what I call leadership loss—and it’s quietly costing companies millions.

What Does Leadership Loss Look Like?

Leadership loss happens when a company’s leadership environment bottlenecks—squeezing potential so that only a select few are recognized as "leaders" while the leadership happening at every level is ignored. This creates a workplace where:

• Quiet quitting becomes the norm. Employees do their jobs well but stop giving their best because they know it won’t be recognized.
• Burnout is rampant, yet treated as inevitable rather than a problem to solve.
• Productivity drops, not because people are less capable, but because they spend energy navigating bias, politics, and unspoken rules instead of focusing on their work.
• Mid-level and early upper management turnover spikes. When talented leaders see no clear path forward, they leave.

The problem? These warning signs are easy to overlook if you don’t have an intentional, embedded leadership culture that actively develops and supports leadership at every level.

The Hidden Cost of Leadership Loss

Let’s put numbers to this: Imagine you have Krista, a high-potential manager making $100,000 per year. She’s ambitious, dedicated, and ready to lead at a higher level. But instead of being recognized for her contributions, she spends 15% of her time navigating the leadership bottleneck—managing office politics, code-switching, and trying to fit into the organization’s unspoken leadership mold.

That means $15,000 of her contributions are lost annually—not because she isn’t capable, but because the environment makes it harder for her to focus on what actually matters.

If Krista does get promoted, the pressure only intensifies. Now, as one of the few underrepresented leaders at the table, she spends even more energy managing bias and navigating unwritten rules. At some point, she realizes her efforts aren’t valued, so she takes her leadership elsewhere.

Now, the company isn’t just losing Krista—they’re absorbing the full cost of replacing her: recruiting, hiring, onboarding, lost institutional knowledge, and decreased morale. Depending on industry estimates, that could be anywhere from 75% to 150% of her salary—a loss of up to $172,500 in this case for just one leader.

Multiply this across an organization, and the financial impact of leadership loss becomes staggering.

The Real Question: What Kind of Leadership System Have You Created?

Companies rarely recognize leadership loss until they’re deep in a turnover crisis. Why? Because leadership culture is often undefined—left to implicit norms rather than intentional design.

What would happen if, instead of talking about "the leadership" as a select group in the C-suite, we talked about leadership as the actions, behaviors, and commitment of anyone who chooses to lead from where they are?

That requires a shift—from default leadership culture to deliberate leadership design. It requires a Company Theory of Leadership—a framework as clear and actionable as a Theory of Change.

Is Your Leadership Culture Defined—Or Left to Chance?

If I asked you today: What is your company’s Theory of Leadership? Would you have an answer?

Is it a living, breathing practice that shapes how leadership is developed, supported, and sustained? Or is it an ambiguous mix of unspoken expectations that only a few can navigate?

Too often, leadership potential is wasted because organizations haven’t designed a system that actually recognizes it. The cost? Talent drain, disengagement, and a slow erosion of creativity, impact, and innovation.

Don’t Wait for a Leadership Crisis

If you don’t have a clear definition of leadership, you’re relying on implicit, outdated norms—and losing your best people in the process.

Leadership loss is preventable, but only if companies are willing to lift the rug and confront the hidden costs.

Read the full blog to dive deeper into the causes, costs, and solutions to leadership loss.

Join the next Executive Leadership Circle to discuss these challenges with a community of peers.

Have you witnessed leadership loss in an organization? Let me know—I’d love to hear your thoughts.

Hi! I'm Jenny, a leadership strategist, keynote speaker, author of Untapped Leadership, and Founder of Untapped Leaders. I partner with organizations to build inclusive, retained, and engaged leadership pipelines and help underrepresented professionals thrive authentically.

Learn more about my writing, speaking, and consulting at www.jennyv-n.com.