The critical health factors business leaders can’t afford to ignore for sustainable success

Keywords: leadership, mentalhealth, managementteam, productivity, sustainability

Date: 22 January 2025, WorkLife Digital

In the relentless pursuit of organisational performance, business leaders often focus on strategy, execution, and market positioning while overlooking an equally critical factor: the health of their leadership team. This neglect is costly. A dysfunctional leadership team can derail strategy, weaken morale, and erode trust throughout the organisation. Moreover, research shows that the health of the senior leadership team can determine not only the organisation's success but also the longevity of a CEO’s tenure.

The silent crisis of dysfunctional leadership teams

A recent study involving over 100 CEOs and senior executives* revealed a troubling narrative of dissatisfaction with leadership team dynamics. Many executives disclosed that their teams faced significant internal issues, which hampered effective collaboration and decision-making. As one CEO recounted, “When I arrived, there was an extremely dysfunctional team. Communication was poor, both internally and with the board. The team simply didn’t work together effectively.”

Such dysfunctions are not rare. Leadership teams frequently fall into dysfunctional archetypes. Each presents unique challenges that undermine team performance and, by extension, organisational success.

Recognising dysfunction

1. Cut-throat competition

Un-checked ambition and competition lead to infighting, political manoeuvring, and decision-making driven by power struggles rather than open dialogue. Meetings become battlegrounds for personal agendas, while collaboration and consensus take a back seat. For example, a Swiss bank’s leadership team descended into chaos as executives vied for the CEO’s role, undermining core projects and morale.

Warning signs include:

Power struggles outside meetings
Shouting matches or tug-of-war over decisions
Resistance to implementing agreed plans

Solution: Address the source of aggression by confronting individuals who prioritise personal gain over team goals. Define acceptable behaviours, model collaborative leadership, and use tools like 360-degree feedback to align team dynamics.

2. Overemphasis on harmony

With an aversion to conflict, leaders prioritise harmony over debate, stifling critical thinking and innovation. Decisions are made without sufficient scrutiny, and issues go unresolved to avoid upsetting the status quo. A European services company’s leadership team exemplified this dysfunction, where camaraderie masked a lack of accountability and constructive criticism.

Warning signs include:

Muted discussions and a lack of robust debate
Avoidance of difficult conversations
A focus on positive news while downplaying challenges

Solution: Foster psychological safety to encourage candid discussions. Provide data-driven insights to anchor debates in fact, not opinion. Monitor team discussions to ensure meaningful participation and encourage healthy conflict as a driver of innovation.

3. Complacency and incompetence

Leaders lack the skills or motivation to drive performance, operating in silos with little regard for corporate purpose. Complacency and an unhealthy fixation on past successes prevent teams from adapting to new challenges. One CEO described inheriting a team that was “not fit for purpose” due to low competence and a lack of shared goals.

Warning signs include:

A focus on the status quo
Fragmented efforts and duplicated work
Resistance to change and innovation

Solution: Rebuild the team with individuals who possess the necessary skills and alignment with the organisation’s purpose. Balance competitive and collaborative behaviours, ensuring clarity in roles and responsibilities.

A framework for high-performing leadership teams

To avoid these pitfalls, business leaders must take a proactive approach to assess and enhance the health of their leadership teams. This process involves three key steps:

1. Clarity of vision and purpose

Leadership teams need a clear and compelling vision to guide their efforts. CEOs must articulate a roadmap that aligns individual contributions with organisational goals. This shared purpose fosters unity and motivation.

2. Alignment of skills and behaviours

Populate the team with individuals whose skills, experiences, and temperaments complement each other. Clearly define behavioural expectations and model these standards at the top. Encourage collaboration where it adds value and competition where it drives results.

3. Regular assessment and accountability

Use tools like the WorkLife Quotient (WL-Q) to measure individual and collective well-being, risk areas, and alignment with organisational values. Incorporate 360-degree feedback and structured reviews to continuously refine team dynamics.

The role of leadership in building healthy teams

Leadership starts at the top. CEOs and executives must model the behaviours they wish to see, whether it’s fostering open dialogue, challenging assumptions, or prioritising team goals over personal ambition. Regularly monitoring team dynamics—through both quantitative tools and qualitative observation—is essential to maintaining high performance.

Organisations led by cohesive, high-performing leadership teams enjoy a significant competitive advantage. These teams are better equipped to navigate challenges, drive innovation, and inspire trust throughout the organisation. Conversely, neglecting leadership team health can lead to dysfunction that stifles progress and erodes morale.

Business leaders must prioritise regular assessments of their leadership teams’ mental health, collaboration, and decision-making processes. By addressing dysfunction early and fostering a culture of balanced accountability, leaders can ensure their teams are not just steering the business—but steering it in the right direction.

WorkLife Digital is a global mental-wellbeing consultancy driven by the mission to improve the sustainability of businesses. Our psychological wellbeing tool, Worklife Quotient (WL-Q), is modelled on cutting-edge scientific research and provides organisation-wide measurement and intelligence on the mental wellbeing levels and psychological resilience of staff. WL-Q also assesses the impact of organisational practices (i.e. people and culture, leadership styles, organisational purpose and values, social impact) that have a direct influence on staff wellbeing and provides strategic recommendations on addressing risks and promoting strengths.

For more information, get in touch at lisa@worklife.digital

REFERENCES

Kell, T. and Zangrillo, M. Why Leadership Teams Fail And what to do about it Harvard Business Review October 2024. https://hbr.org/2024/09/why-leadership-teams-fail