If you want to understand why some companies have a toxic culture, underperform relative to their potential, and eventually collapse — look no further than the quality of their leadership teams. Whereas competent leaders cause high levels of trust, engagement, and productivity, incompetent ones result in anxious, alienated workers who practice counterproductive work behaviors and spread toxicity throughout the firm. Consider that the economic impact of avoiding a toxic worker is two times higher than that of hiring a star performer.
Incompetent leaders are the main reason for low levels of employee engagement, and the prevalent high levels of passive job-seeking and self-employment.
There are too many incompetent individuals in leadership positions — in large part because businesses tend to promote people on the basis of charisma, confidence, inaction, and even narcissism.
Instead, companies should be putting people in charge who demonstrate competence, humility, and integrity. If you’re responsible for assessing leadership candidates, you should work on your ability to distinguish between confidence, competence, and experience. Remember that overconfidence is a natural result of privilege.
Fortunately, you can use scientifically valid assessments to measure the traits you want (or don’t want) in your leaders. You can ask company leaders, including emerging leaders, to take self-assessments, and then measure their responses against their leadership style, performance, and effectiveness. The resulting data will help identify patterns that characterize good and bad leaders at your company.
Of course, this practice will take time and effort, and many organizations won’t want to invest those resources. But vetting candidates for leadership roles will pay enormous dividends down the line.