Is your organization creating bad leaders?

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At the moment, confidence in leadership is at an all time low, according to the 2024 Leadership Confidence Index. It’s natural to assume the cause is born of an individual failure—the leader lacks competence, their boss didn’t prepare or train them well, they don’t care about how others experience them. And many of these reasons certainly hold true. 

But in my experience working with senior executives as an executive coach and organization design consultant, bad leadership is often manufactured by an organization designed, albeit unintentionally, to produce bad leaders. In the intricate dance of organizations, design and leadership are the two central partners. The design of an organization directly shapes the effectiveness, decision-making, and moral authority of its leaders. When the choreography of design falters, leadership stumbles. 

Organizations are not mere collections of departments, roles, technologies and processes. They are ecosystems where clarity, alignment, and purpose must harmonize to drive value. When these elements are absent, leaders are often set up to fail, sometimes even before they realize it. Bad organization design is not just a structural flaw; it is a leadership hazard. Here’s why.

The Trap of Misaligned Structures

When an organization’s structure does not align with its strategy, leaders are forced to work against the grain. Imagine a company whose strategic focus is innovation but whose design over-prioritizes cost control. Leaders in such environments are left juggling contradictory priorities, often at the expense of the very innovation they are supposed to champion.

For example, a global tech company I worked with set out to become a leader in AI innovation but maintained a rigid, hierarchical structure optimized for minimizing operational expenses. Mid-level leaders found themselves without the budgetary flexibility or cross-departmental collaboration needed to pursue innovative initiatives. As a result, the company fell behind competitors who had better-aligned structures.

Misalignment also breeds fragmentation. When leaders work at cross-purposes with other leaders, it signals to those they lead to put their own agendas first. Such self-involvement frays the organization, disabling it from working coherently. Leaders in silos may excel at optimizing their narrow domains but fail to see the bigger picture. This creates turf wars, miscommunication, and a lack of cohesion, leaving leaders to expend precious energy managing conflict instead of driving impact. A 2021 study published in the Journal of Economics Finance and Management Studies showed a direct correlation between misaligned organization design and poor decision making. 

Ambiguity as the Enemy of Accountability

Ambiguity in roles, decision-making authority, or performance expectations is another byproduct of poor design. Leaders operating in such environments face an uphill battle in creating accountability. Without clear boundaries or metrics, decision-making slows, trust erodes, and blame becomes a substitute for ownership.

Consider a retail chain that failed to clearly define the responsibilities of its regional managers versus its store managers. When sales declined in multiple locations, no one was certain who was responsible for addressing the issue. This lack of clarity not only delayed corrective actions but also created friction and mistrust among the leadership team.

Leaders thrive when their roles are defined with precision and their scope of influence is clear. In contrast, bad design fosters shadow systems—unofficial ways of getting things done that undermine formal processes. Leaders operating in these shadows may gain temporary wins but at the cost of sustainable performance and credibility.

Culture as a Reflection of Design

Organizational culture is not an abstraction; it is the byproduct of what an organization rewards, tolerates, and ignores. Bad design amplifies toxic behaviors, making it harder for leaders to model the values they preach. For instance, if the incentive system rewards short-term gains at the expense of collaboration, leaders will struggle to inspire teamwork.

A financial services firm, for example, implemented a bonus system heavily weighted toward individual performance metrics. While some employees thrived, cross-department collaboration plummeted. Leaders trying to foster teamwork found themselves at odds with a system that rewarded competition over cooperation.

Culture is experienced at the organization’s seams—the places where different parts of the organization connect. When these seams are poorly stitched, leaders are left grappling with inconsistent norms, conflicting metrics, and territorial self-interest, making it nearly impossible to lead cohesively. 

Research suggests that aligning business strategy with organizational culture can significantly impact performance. According to a 2019 Workplace Accountability study with over 40,000 participants, 93% of those surveyed were unable to align their work or take accountability for desired results. Fully one-third felt that their priorities change frequently, creating confusion. Further, 84% of those surveyed cited the way leaders behave as the single most important factor influencing accountability in their organizations. And yet just 15% of leaders have successfully clearly defined and broadly communicated their key results.

The Weight of Overcompensation

When leaders inherit the consequences of bad design, they often try to compensate with sheer willpower, which can manifest as micromanagement. While this may yield short-term results, it is unsustainable and typically accelerates burnout—not just for the leaders but for their teams as well. Overcompensation also distracts leaders from their primary role: to shape vision, align resources, and empower others.

For instance, in a manufacturing company struggling with outdated processes, a plant manager took on the role of personally reviewing every operational detail to ensure quality. While this approach temporarily improved output, it left the manager exhausted and demoralized the team, who felt micromanaged and disempowered.

Designing for Leadership Success

If bad design leads to bad leadership, the reverse is also true: good design enables great leadership. An organization that prioritizes clarity, alignment, and purpose creates an environment where leaders can thrive. Here’s how:

1. Align Structure with Strategy: Start by clearly defining the organization’s strategic objectives. Map out how each division, team, and role contributes to achieving these goals. Distribute decision rights clearly across an organization, and clarify who gets to make which decisions, with what authority and resources. Engage leaders in cross-functional strategy discussions to ensure their buy-in on how their teams contribute.
2. Clarify Roles and Metrics: Define every role’s responsibilities in granular detail, making sure it has clear performance metrics that align with broader team and organizational objectives. Encourage leaders to co-create these performance metrics with their teams so accountability feels collaborative rather than imposed. Periodically revisit role descriptions to address overlaps or gaps, especially as the organization evolves. Research indicates that ambiguity in accountability is a leading cause of delays in organizational efficiency.
3. Integrate Culture with Design: Ensure that processes and systems reflect the organization’s core values. For instance, if collaboration is a priority, design team processes that reward joint problem-solving. Build performance reviews and reward systems that recognize behaviors aligned with cultural goals. Leaders should receive training on how to model these values in their daily interactions. Create feedback loops through surveys or focus groups to monitor cultural health and course-correct as needed. A well-integrated culture enhances employee engagement, driving measurable improvements in productivity.
4. Cultivate Leadership: Provide leaders with development programs that address the unique challenges of their roles. Invest in coaching and mentoring initiatives to help leaders build emotional intelligence, resilience, and strategic thinking. Implement peer-learning groups where leaders can share insights and learn from each other’s experiences. Equip them with advanced tools for data-driven decision-making, and regularly assess their development progress through structured feedback mechanisms.

A Symbiotic Relationship

Leadership does not exist in a vacuum. It thrives or falters in direct proportion to the environment that is shaping it. Bad organizational design is not just a technical or financial issue; it is a moral and strategic one. Leaders who find themselves trapped in poorly designed systems must not merely cope but advocate for systemic change. After all, an organization’s design is its ultimate act of self-expression. It is the pure embodiment of the organization’s mission and strategy—and it shapes the kind of leaders it will produce. When design and leadership are in harmony, the result is not only organizational success but leaders and employees who flourish.

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