The Hidden Costs of Poor Management
CPA Samwel Baraka Ochieng
There is an adage that “People leave managers, not companies.” Have you ever been in a situation where you loved your company, role, career prospects, and colleagues, but found your manager exceptionally difficult or even intolerable? You’re not alone—and therein lies the danger. Research by Development Dimensions International (DDI), a global leadership consulting firm on “The Frontline Leader Project: Exploring the Most Critical Segment of Leaders”, (https://www.ddiworld.com/research/frontline-leader-project ), underscores the idea that people leave people, not companies. According to their findings, 57% of employees have left a job due to their manager, 14% have left multiple jobs for the same reason, and 32% have seriously considered leaving because of their manager. When great employees leave, look at the company’s leadership, not the logo. This raises an important question: Is there a distinction between a company and its leadership? Absolutely. A company’s culture is often reflected in its leadership. Managers are the frontline representatives of the company’s values, ideals, and policies. Effective leadership is more critical than ever in today’s business landscape, shaped by the complexity of geopolitical conflicts and climate challenges. If people in leadership positions don’t embody and espouse the company’s cultural ideals, the company culture can suffer. Therefore, aligning leadership with company culture is essential for its success. This view is also supported by a 2019 article published by the Harvard Business Review, titled “8 Things Leaders Do That Make Employees Quit” (https://hbr.org/2019/09/8-things-leaders-do-that-make-employees-quit ), which explored the link between employee departures and failures in leadership rather than issues within the company itself. The article identified several common leadership mistakes that drive employees to leave, including setting inconsistent goals or expectations, imposing excessive process constraints, wasting resources, misallocating roles, neglecting psychological safety, stifling creativity, and leading with bias. It emphasized that understanding these detrimental behaviours—and their impact on team dynamics—can help leaders identify at-risk employees and implement changes that might encourage them to stay.
While the sampled research data highlights the impact of poor leadership, it’s crucial to recognize that the company itself also bears responsibility. Managers, after all, are extensions of the company as their actions reflect the values and culture the company cultivates. A company that doesn’t enforce a consistent culture or allows managers too much leeway risks creating an environment where poor leadership thrives. The concern is whether companies are taking enough steps to ensure their leaders promote the company’s ideals and address the systemic issues that enable problematic management to persist. Rising through the ranks to a leadership position should instil a sense of humility, yet for many, it does not. As Abraham Lincoln wisely observed, “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.” Character is revealed not by how one handles misfortune, but by how one wields power. It is through the responsible and ethical exercise of power that one’s true character is revealed. When the tides of power elevate the unwise to leadership positions, they become enamoured with the authority they wield, using it to dominate and control their subordinates. Sadly, this often serves their selfish interests rather than advancing the team or the company’s objectives leading to the loss of valuable employees, who faced with a hostile work environment, often choose to resign in search of peace of mind elsewhere. When leadership fails, it causes employees to leave the company, which reveals a deeper systemic issue within the company. This can happen even if the company is successful in generating wealth.
At the heart of any company’s purpose is the pursuit of success, whether profitability in the private sector or effective and efficient service delivery in the public sector. In both contexts, leadership effectiveness plays a critical role. The private sector focuses on achieving financial growth and surpassing breakeven points to benefit stakeholders and shareholders. In the public sector, the focus is on providing high-quality services while ensuring transparency and accountability. Be it in the public or private sector, a leader must create a positive and supportive work environment. Without principled leadership—characterized by integrity and fairness—even the company’s most well-designed strategies and goals may fail. However, poor leadership can persist within the company for several reasons. Firstly, leaders who deliver short-term financial or operational results might overshadow the negative impact on employee morale and retention. Secondly, in companies with weak systems, senior management may be unaware of the detrimental effects of ineffective leaders or may overlook employee feedback. Thirdly, leaders with strong internal relationships might be difficult to replace due to their connections. In addition, companies may also be reluctant to replace such leaders because of the time, cost, and effort associated with recruitment and onboarding. Lastly, decision-makers might underestimate the long-term damage caused by poor leadership, focusing instead on short-term stability. These factors contribute to a scenario where poor leadership may endure and eventually harm the company and its employees.
Poor management impacts more than just losing the company’s greatly talented employees. It also affects team morale, productivity, and overall company performance. Successful companies need managers who act as “coaches,” not “bosses.” A good manager/coach supports employees by providing prompt guidance and advice while allowing them enough freedom to work independently. A coach proactively uncovers the inherent vulnerabilities of their team by fostering trust and accountability, which drives success. In contrast, bosses rely on fear and authority. Companies can either have a boss-like manager or a coach-like manager, and these two approaches produce markedly different results. This distinction is central to why people often leave managers, not companies. Employees guided by a coach-like manager are more likely to feel valued, supported, and empowered to excel within the company. However, when management is driven by control and fear, employees become disillusioned, even if they appreciate the company’s mission and values. My concern is that even with a strong reputation and culture, a company can still lose talented employees through quite firing if its managers fail to embody these principles and instead create a toxic work environment. Therefore, companies should invest in developing leaders who can coach and inspire, rather than merely manage.
Employees who leave due to quiet firing—where an employee’s work environment is made so difficult that they eventually resign on their own—may be unfairly perceived as failures, despite their significant contributions before leaving. Unbeknownst to the company, some employees may harm their reputation by sharing negative experiences on online review platforms to paint a gloomy image of the company and its operations. The damage can be very costly for the company to repair once it becomes public, as the brand and logo will bear the brunt of the impact. Even if a company has a strong brand and positive culture, poor management can damage its reputation, driving away potential talent and thinning the company market which might be scared by the negative reviews. Therefore, companies must address management malpractices to prevent the loss of valuable employees and protect their overall reputation.
In conclusion, poor management practices can severely damage a company’s brand and reputation. Great employees may be compelled to leave not only due to dissatisfaction with their roles but also because of ineffective leadership that fails to inspire and support them. Investing in leadership development to foster a coaching mindset rather than a controlling one is crucial for retaining top talent and protecting the company’s reputation. As the inimitable Sir Richard Branson wisely said, “Train people well enough so they can leave. Treat them well enough so they don’t want to.” Companies need to embrace this insight and focus on cultivating leaders who genuinely support and empower their teams. By doing so, they will not only enhance employee satisfaction but also strengthen their long-term success.
Email: barsamwel@gmail.com
The writer is a Leadership Enthusiast and a Member of ICPAK
