A failure of facts
Why organisations fail
One conversation topic I frequently have with friends is why work organisations fail. Some attribute failure to having the wrong person in charge, others to a particular class of profession, and others simply to bureaucracy. My difficulty with these explanations is that, even when they are true, they offer little that a practising leader can actually act on.
I am interested instead in explanations that are practical—reasons for failure that leaders can realistically avoid, or at least mitigate. For this reason, I have spent considerable time reflecting on this question, drawing from my own leadership experience and from observing the successes and failures of others. My aim is to articulate mistakes that well-intentioned leaders can do something with. I propose four such mistakes.
Decisions based on a shallow theory of reality
Engineers are trained to see problems as engineering problems, lawyers as legal problems, and diplomats as diplomatic problems. More generally, all of us learn—through training and experience—to interpret the world in particular ways. These perspectives are useful, but they also bias us toward default solutions.
This bias is the most common leadership failure. An engineer proposes an engineering solution when the root cause lies in relationships. Diplomats pursue compromise where the issue is technical. Lawyers reframe organisational dysfunction as compliance. In each case, leaders “copy and paste” prior experience without first assessing whether it is relevant to the situation at hand.
Because experience is always interpreted through an underlying view of the world, this mistake is best described as making decisions based on a shallow theory of reality.
A familiar manifestation is the complaint about “process-driven people.” What is usually meant is not that process itself is flawed, but that some people focus on completing process at the expense of outcomes. Processes exist to preserve past solutions for future use, and when circumstances are stable, this works well. But when reality changes, rigid adherence to process obscures the mismatch between the assumptions that once justified it and the circumstances now being faced.
At the extreme, process becomes a refuge—a way of avoiding responsibility for understanding the organisation’s real complexity.
Scale makes this error more costly. When temperature changes, water moves from solid to liquid to gas. Each state has entirely different properties and must be handled differently. Organisations behave in much the same way. A team of four, a team of forty, and an organisation of forty teams are not simply larger versions of the same thing; they are fundamentally different systems.
Leaders commonly fail when they apply the methods that worked at one scale to another. Personal relationships sustain small teams but collapse under growth. Leaders whose theory of leadership was formed when the organisation was small often become perplexed when the same approach no longer works as it expands. Their theory, once adequate, is applied beyond its limits. The reverse mistake occurs as well.
Decisions based on a shallow theory of reality are therefore the most common leadership failure. The alternative is not to discard experience, but to subordinate it to facts—to study circumstances carefully and reason from first principles toward the desired outcome, using experience as input rather than as a shortcut.
Fighting imaginary enemies
One of the more striking patterns I have observed is that many organisations are not undone by external forces, but by their own internal behaviour. They exhaust themselves pursuing dead ends or become paralysed by inaction. Fear is almost always the driver.
The most common example is leaders attempting to please people who do not need to be pleased. Out of fear of senior executives, boards, or shareholders, leaders delay decisions and seek approval from people who either do not care or lack the context to judge. Organisations stall while waiting for assent that was never required.
The opposite mistake occurs when leaders care excessively about keeping everyone below them aligned, even when decisive action—taken calmly and without theatrics—is what would actually create unity.
Other examples are more overtly political. Leaders imagine colleagues are plotting against them and divert energy into defensive manoeuvring rather than delivery. Others avoid recognising standout contributors for fear of alienating those who were merely adequate. In each case, opportunities are lost not because of real opposition, but because of fear-driven misperception.
Behaviour often creates what it expects to find. Those who assume generosity tend to act generously and elicit generosity in return. Those who assume hostility act defensively and provoke hostility. The same applies here: fighting imaginary enemies frequently creates the very enemies one fears.
I have seen this repeatedly. People act out of fear, generate the conditions they feared, and are undone in precisely the way they hoped to avoid. A simple example is feedback avoidance. Staff who fear criticism avoid feedback, cutting themselves off from the information they need, until feedback arrives too late and in its harshest form.
The opposite of fighting imaginary enemies is managed risk-taking: acting toward a goal while preserving sufficient buffer for inevitable mistakes. Action should be driven by purpose, not by fear of error.
Lack of tested counsel
A leader cannot be everywhere at once. They depend on others for information, and the quality of this information directly shapes the quality of their decisions. Building a reliable base for intelligence is therefore a central leadership task.
Some leaders consult too little and decide in isolation. Others consult too widely, seeking input from everyone. Both approaches detach decisions from reality. Neither a small, random sample nor the general crowd provides reliable insight into complex organisational issues.
Effective leaders are deliberate in how they gather information. They learn the predispositions and biases of those around them. Some people see strategic patterns clearly; others are accurate observers of operational detail. Leaders must know whose perspectives are reliable in which contexts.
Alongside this breadth, leaders must cultivate a small, high-trust group whose judgment they understand well. When faced with difficult decisions or significant change, they consult this group rather than no one—or everyone. This is tested counsel. These individuals are not always correct, but their views are interpretable because their perspectives are known.
Misinterpreting cause and effect
A leader is entrusted with authority in order to create outcomes—that is, to cause intended effects. To do so effectively, they must understand cause and effect within their organisation. Many fail here, not through lack of effort, but by substituting reality with simplistic narratives.
The most common error is linear causation: X causes Y causes Z. Organisational behaviour rarely works this way. It is driven by reinforcing cycles—virtuous or vicious.
Do strong sales teams create good market strategy, or does good strategy create strong sales teams? The honest answer is that they reinforce one another. Yet many leaders insist on beginning in a single, predetermined place, often framed as a choice between top-down and bottom-up approaches. Relying exclusively on either is a mistake.
Effective leaders instead ask where intervention, at this moment, is most likely to initiate a virtuous cycle or disrupt a damaging one. As leaders move through different levels of the organisation, their leverage points change. In a reinforcing loop, they may need to act on whichever element is most accessible in their role. Insisting on starting elsewhere leads only to stagnation.
Linear thinking persists because it makes stories easy to tell. It is reinforced through education, history, and daily news, which tend to favour simple, top-down narratives. Over time, this conditions leaders to apply correct actions at the wrong time. The truth—processes happens in cycles—will never be taught at school, but only learned by the astute observer.
A related failure is not hearing the sound of silence. Important causes often diminish their own visibility. Good leaders may stay quiet and let others take credit. Dissenters may withhold their views from those they distrust—often the people who needs them most. Leaders who rely only on what is visible or spoken inevitably misread cause and effect.
Conclusion
We have examined four leadership failures that commonly lead to organisational failure. In each case, the underlying problem is the same: a failure to systematically gather, analyse, and respond to facts. Instead, leaders short-circuit their decision-making through habitual shortcuts—shallow theories, imagined fears, misinformed advice, or simplistic views of causality.
These failures rarely reveal themselves immediately. They accumulate quietly and become visible only after the leader has moved on. Often, they are noticed only by those who see the missed opportunities. The leaders responsible for the failures remain unaware, believing either that things went well or that failure was due to other people or to external circumstances.
Such is the nature of these mistakes: they conceal themselves from those who make them. The only remedy is sustained attention to reality—studying the facts of the situation, reasoning carefully from them, and acting decisively while managing risk. The full impact of such leadership may never be known. But like those who act faithfully in secret, their deeds are seen by the One who sees in secret.