An organisation with good leadership promotes positive outcomes in a large variety of areas throughout the business. Great leadership ensures that all team members are in the right seats and feel comfortable making mistakes and learning from them without being scolded by their boss.
Good leaders also often promote others to take on leadership development and leadership training, making them feel more comfortable taking on a leadership role in the future. Good leadership is all about trust and empathy, creating a fantastic work environment in which everyone looks forward to coming into the office every day instead of dreading it.
Unfortunately, not all organisations are lucky enough to experience the benefits that come along with good leadership. Bad leadership remains a thriving problem in today’s world, resulting in a number of negative impacts for businesses both large and small around the world.
This article will explore the effects of poor leadership on an organisation, helping you understand what makes a bad leader as well as making you consider the things that you need to do to avoid becoming a poor leader.
Effects Of Bad Leadership
Leadership is one of the few things about a business that can be controlled, and there is a concrete link between bad leadership and underperforming organisations. The impact of a bad leader on an organisation has the capability to negatively affect employees at all levels. It sets a poor standard which can lead to long term consequences such as low employee retention and an undesirable company culture.
Bad leadership in business leads to toxic working attitudes, staff segregation, loss of high-performing employees, and an unattractive workplace culture that is unlikely to inspire results from your staff while creating a cycle of poor staff retention.
Poor leadership impacts not only the levels of productivity inside of a company but how a business is perceived by its customers. If your team members aren’t happy in their roles as a result of poor leadership, they will find it increasingly difficult to find the motivation to do their job to the best of their ability.
How Can Leadership Negatively Affect The Success Of A Company?
Research from the Australian Institute of Management with Monash University shows that “83% of the almost 2000 employees surveyed rated their manager’s leadership skills as average or below average and they also ranked poorly in terms of communication, skills, strategic influence and their ability to oversee staff performance.”
Evidently, the impact of these changes to staff performance will be negative for your organisation and lead to a loss of profit.
As with bad leadership, although an attractive pay-packet might help spur some motivation within an individual, it’s not feasible when it comes to long-term, sustainable motivation and productivity in the workplace.
Employee retention is achieved through investing in employees. For many organisations, they have rebranded their human resources departments to be ‘people and culture’ as it’s no longer being viewed as a cost centre, but rather as a source of value creation, considering how much more value a productive and happy employee can add to the organisation.
As Richard Branson said, “you should aim to train staff so they can leave, but treat them so they won’t.”
Unlike some external issues that organisations face that are detrimental to business, like economic downturn or a pandemic, leadership is an internal issue within a company’s control.
Bad leadership can have a negative impact on employees and might even damage the company’s bottom line.
A poor leader is defined as “a person in a leadership role that lacks the necessary skill, ability and overall qualities to effectively lead.”
It‘s no surprise that poor leaders are also poor listeners. Employees want and deserve to be heard. Good leaders listen to their employees, consider alternative viewpoints, and are fair decision-makers. If you find your boss avoiding conversation, you can count this among the signs of bad leadership skills. Likewise, leaders that can’t take constructive criticism are probably not skilled leaders, as effective leaders are able to motivate a team while simultaneously listening to the team’s suggestions.
The negative impacts to an organisation from bad leadership are ongoing, however a good leader can increase a businesses sales, boost employee morale and make staff want to stay at an organisation achieving their best for as long as possible.
This internal factor should not be overlooked by business owners. Investing in good management helps organisations succeed as a whole.
