Case Study – The Cost of a Bad Leader: Why Hiring the Right Leadership Is Crucial for Your Business

This is the first of a new series of fictional case study articles. The business principles are applicable to all industries, not just the industry mentioned below. 

Mike had spent years building his commercial construction company from the ground up. He took pride in his work, bidding on high-profile projects and assembling what he thought was a solid team. But as his company grew, so did his hiring challenges—especially when it came to leadership positions.

One project in particular—a multi-million dollar office complex—pushed his business to the edge. Under pressure to meet deadlines, Mike rushed to hire a new project manager, Tom, who came with an impressive résumé and glowing recommendations. But within weeks, cracks began to show.

Tom cut corners, ordered cheaper materials to save costs (without approval), and ignored safety protocols. Worse, he treated crew members poorly, causing skilled workers to quit mid-project. By the time Mike caught on, the damage was done. The project was behind schedule, client trust had eroded, and fixing Tom’s mistakes cost the company thousands.

Determined not to repeat the mistake, Mike changed his hiring approach. He thoroughly vetted new hires, conducted trial periods for leadership roles, and built a workplace culture that rewarded integrity and reliability. Within a year, his company had a team of dedicated leaders who took pride in their work—and it showed in their projects.

For businesses like Mike’s, hiring the right leadership isn’t just about filling roles—it’s about protecting the company's reputation, profitability, and long-term success.

The Importance of Hiring Strong Leaders

A business can only succeed if its leadership is competent, ethical, and aligned with company values. A poor leadership hire can derail entire teams, weaken morale, and ultimately cost the company in lost productivity and damaged relationships.

The problem isn’t just finding someone with the right credentials. Many executives, managers, and directors look great on paper but fail to lead effectively. Worse, some take advantage of their positions, making decisions that benefit themselves at the expense of the company.

Avoiding these pitfalls requires a thoughtful hiring strategy that goes beyond skills and experience to assess character, leadership style, and long-term commitment.

How to Hire the Right Leaders

When hiring for leadership roles, businesses should focus on finding ethical, capable, and accountable individuals. Here’s how:

  1. Refine Your Hiring Process
    • Conduct in-depth interviews that go beyond technical skills—ask situational and ethical questions.
    • Use work simulations, leadership assessments, or trial periods to see candidates in action.
    • Verify references carefully and speak to past employers about leadership style and integrity.
  2. Prioritize Cultural and Ethical Fit
    • A great leader must align with company values. Someone who lacks integrity, respect, or teamwork skills can cause more harm than good.
    • Clearly communicate your company’s mission and culture during the hiring process to attract leaders who share your vision.
  3. Set Clear Expectations for Leadership Roles
    • Define what success looks like for the position, including decision-making authority, accountability, and ethical standards.
    • Be upfront about company policies, workplace expectations, and leadership responsibilities.

How to Retain Great Leaders

Even the best leadership hire won’t stick around if they feel undervalued or unsupported. To keep strong leaders, businesses should:

  1. Foster a Leadership-Friendly Culture
    • Create an environment where leaders feel empowered to make informed decisions while staying accountable.
    • Provide opportunities for collaboration and mentorship to help leaders grow.
  2. Offer Competitive Compensation and Growth Opportunities
    • Leadership talent is in high demand. Ensure your pay, benefits, and perks are competitive within your industry.
    • Provide ongoing professional development, including leadership training and career advancement opportunities.
  3. Maintain High Ethical and Performance Standards
    • Hold all leaders accountable to the same standards. If employees see favoritism or unethical behavior in management, morale will suffer.
    • Encourage transparent communication and decision-making to build trust within the company.
  4. Recognize and Reward Strong Leadership
    • Leadership can be a difficult and often thankless role. Recognizing and rewarding great leadership fosters loyalty and encourages long-term commitment.

Final Thoughts

Hiring and retaining the right leaders is just as critical—if not more so—than hiring the right employees. Leaders set the tone for company culture, influence productivity, and ultimately determine business success.

If your company has struggled with hiring leadership roles, it’s time to refine your hiring process, emphasize integrity, and invest in leadership development. By learning from mistakes—like Mike did—and implementing better hiring and retention practices, businesses can build a team of strong, ethical leaders who drive long-term success.

For more pratical information on hiring for a leadership position, check out this recent episode of the Expandable Show. https://www.youtube.com/watch?v=NtRezs5v4oA

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