Why Do We Continue to Promote Leaders Who Cannot Lead People?

Introduction:

In companies across the globe, we continue to make the same mistake: promoting individuals to leadership roles without considering their ability to truly lead people. We measure success by high performance and technical skills, yet we overlook the one quality that distinguishes real leaders from the rest: the capacity to inspire, connect, and bring out the best in others. Why do we still cling to outdated criteria that reward everything but genuine leadership?

According to a recent Gallup report, only 32% of employees in the U.S. are actively engaged at work, and globally, this number drops to just 20%. The consequences are staggering: low engagement leads to 18% lower productivity, 37% higher absenteeism, and 15% lower profitability.

This disconnect between employee potential and organizational performance is often rooted in a common issue — leaders who lack the skills to lead effectively.

Up to 70% of the variance in an employee's engagement can be traced back to their leader. Gallup.

We know that leadership profoundly impacts employee engagement, yet we still don't take it seriously enough. I often hear organizations emphazise the importance of leadership, only to see behaviour that suggests otherwise. Just this week, I spoke to a VP desperately trying to leave an organization he once loved because his new boss is suffocating him with micromanagement. It’s hard to grasp how soul-destroying this is until it happens to you. Instead of empowering his team, the new boss is causing negative friction and stifling the entire function's ability to deliver. Meanwhile, the boss insists he needs to know every detail, receive daily reports, and approve every decision — but in doing so, he's failing to bring out the best in his people.

We don't promote the right people

A study by the Harvard Business Review (HBR) found that organizations fail to choose the right candidate for a managerial role 82% of the time. This finding aligns with research from McKinsey & Company, which shows that only 25% of senior managers believe that promotions within their organizations consistently go to the most deserving candidates.

Poor leadership selection costs organizations up to 2.5 times the individual’s salary due to lower engagement, productivity loss, and increased turnover. CEB

What Are We Doing Wrong?

Lack of Clear Criteria for Leadership:

According to the Harvard Business Review, only 32% of organizations have clearly defined criteria for identifying high-potential leaders. This lack of clarity leads to inconsistent promotion practices and a reliance on subjective judgment rather than aligning with strategic organizational goals. Even when criteria are clearly defined, we often ignore them in favour of candidates we personally like. Consider the CEO who promoted his "mini-me" despite the leadership criteria emphasising the importance of collaboration. The "mini-me" was notorious for creating silos, yet he still received the promotion, completely disregarding the leadership framework in favour of the CEO’s personal bias.

A study by PwC found that organizations with well-defined leadership frameworks are 2.5 times more likely to outperform their competitors.

We might think we're good at identifying leaders with potential, but we're often far from it. A study by Zenger found that 12% of so-called high-potential leaders were actually in their organization’s bottom quartile for leadership effectiveness. Overall, 42% were below average — a far cry from the top 5% they were assumed to represent. My experience over the years has been similar. I've seen many so-called high potentials arrive at leadership assessment days only to perform at the same level — or worse — than their peers. When I suggested a more rigorous talent review process to one CHRO, she dismissed it, insisting that the C-Suite "knew best."

Subjectivity in Evaluation:

Have you ever been in a talent review meeting? It always concerns me when one leader is responsible for promoting his or her people. We know that this is the case in?73% of companies, the most common method for identifying individuals as potential candidates for leadership positions is a single nomination by their direct manager.?Research from the Harvard Business Review indicates that only 29% of high-potential employees feel they are recognised accurately by their organization. Promotions often rely on subjective criteria, such as personal relationships or informal feedback, which may not reflect an individual's ability to lead.

It's really important to gain diverse perspectives on those with leadership potential to ensure that they are not just successfully managing up, and that they are creating teams where their people thrive. A study by Deloitte shows that 94% of executives believe that "people data" (like performance metrics and feedback from diverse sources) is crucial for fair promotion decisions, yet only 9% of organizations believe they have a good understanding of which data to use.

Overvaluing Individual High Performance:

Is it any wonder that 60% of new managers fail within the first 24 months due to the assumption that high individual performance translates to effective leadership? We must stop viewing leadership as a promotion you get for being a high performing expert - instead see it as a different job that requires other skills. I believe we need to treat leadership like a profession and ensure we carefully select and develop people into these roles, from first line to C-suite. Never assuming leaders can lead because they've held a title previously.

The competencies needed for individual roles, like technical skills, differ significantly from those required for leadership, such as empathy, strategic thinking, and team development. Center for Creative Leadership

Yet, there are many senior leaders out there who have managed to get into their positions and they cannot lead people. Why do we continue to promote these people?

Similarity Bias:

Similarity bias, or the tendency to promote those who are like us, is pervasive. According to a study published in the Journal of Organizational Behavior, this bias leads to homogeneous leadership teams that lack diversity of thought and experience, which in turn can stifle innovation and decision-making quality. Take the CEO who promoted a "mini me" who had many visionary and futuristic qualities like himself, but was missing the high EQ needed to bring the department together or the commercial acumen for success. That leader was quietly removed when his overspend became a problem.

Of course we like people who are like us, it can make life so much easier if we are in agreement, but we need to be challenged and gain diverse insights and perspectives. McKinsey's research demonstrates that organizations with diverse leadership teams are 33% more likely to outperform their peers, suggesting that similarity bias in promotions can directly hinder organizational success. We all might think we are being objective, but are we?

If we are getting leadership so wrong, what do we need to do to change this?

What Can We Do Differently?

Implement Leadership Criteria & Objective Evaluation Metrics:

Be clear about what makes a good leader in your company. Define this by creating a leadership framework or principles that enable everyone in the company to understand what good looks like. The framework is then used to objectively assess people in hiring, development and promotion. This takes the guesswork out of leadership and let's face it there plenty of scientific backed off the shelf models to choose from, if you are unable to create your own.

The Society for Human Resource Management (SHRM) found that organizations using structured, objective evaluation metrics are 41% more effective in identifying high-potential leaders. Tools like 360-degree feedback, leadership assessments, and performance analytics can provide a more accurate picture of an individual's capabilities.

Leverage Behavioural Data and Analytics:

Leveraging data and analytics to inform promotion decisions can significantly reduce biases. Research from the Corporate Executive Board shows that organizations using data-driven decision-making are 19% more likely to achieve above-average profitability. By correlating specific behaviours and competencies with leadership success, companies can make more informed promotion choices. The key is recognising that it’s our behaviours that impact performance. As one AI expert once told me, "It's not about the tech — that part is easy. It's the human behavioural change that's difficult." Many companies are capitalising on behavioural differentiation to drive their bottom line — and in our AI era, this is what truly sets us apart as humans

We have met some enlightened executives who instinctively understood behavioral differentiation and found ways to out behave their competitors consistently enough to improve their top and bottom lines significantly. Additionally we have met numerous executives who were clueless about the impact of behavior and hadn’t the faintest idea how to use behavior competitively. Korn Ferry

Develop Flexible Talent Pools:

A report by McKinsey & Company indicates that organizations with robust succession planning programmes are 2.2 times more likely to achieve higher financial performance. Effective succession planning focuses on developing a diverse pool of candidates ready to step into leadership roles, ensuring continuity and minimising the risk of poor promotion decisions.

But let’s be clear — this isn’t just about identifying the next person for your job. It’s about finding potential leaders throughout the entire organization, from the factory floor to the C-suite, and creating pools of leadership potential. In a rapidly changing world, linear succession planning is outdated. Instead, build flexible, dynamic pools where leaders are developed for a range of roles, some that do not exist today.

Encourage Inclusive Decision-Making:

Research from Deloitte reveals that inclusive decision-making leads to 60% better outcomes. By diversifying the voices involved in promotion decisions, organizations can mitigate the impact of individual biases and provide a more balanced view of an employee's potential.

I'd love to see employees involved in selecting leaders, I mean who knows best if leaders are bringing out the best in their teams? I recognise this is full of concerns but is it worse than our current way of selecting future talent? Leadership should not be decided by one person and other leaders and stakeholders should be involved to eradicate bias as much as possible. What about talent nominations, talent fares or opportunities for anyone to test their leadership potential? There is so much hidden potential in our organizations today and we need to find it.

Conclusion:

I often ponder; If we failed to choose the right operational machine 82% of the time or sales were 60% down, we would act upon it immediately. Yet we so often ignore the poor leadership we have in our businesses today?

We are our own worst enemies when it comes to leadership selection. As the Harvard Business Review highlights, our inherent belief that we "know best" is often misguided. By clinging to outdated practices, views of leadership and biases, we risk stifling engagement, productivity and innovation, which are vital for long-term success. The evidence shows that objective, data-driven approaches to selecting and developing leaders are far more effective. To build a more engaged and productive workforce, we must rethink how we choose our leaders—by promoting those who can truly inspire, motivate, and guide teams to success.

By challenging the status quo and adopting better strategies, we can stop promoting people who cannot lead and start empowering those who can.

Are you ready to make that change?

Liz Rider is an Organizational Psychologist, LinkedIn Top Voice on Leadership and Former Global Head of Leadership. Her expertise lies in executive coaching, leadership development, and delivering impactful speaking events for large multinationals globally. She believes that work is becoming unsustainable and through human centric leadership, we can change this.

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