6 Ways Poor Leadership Impacts Your Business

Poor leadership has devastating effects on any team. Why? Because a leader is so much more than just a figurehead.

Anyone who holds a position of authority has the responsibility to ensure all team members are working together towards a collective goal. Leaders are a valuable part of any business because they determine the pace and progress of work.

With that said, poor leadership is a huge liability. The actions of a poor leader lead not only to missed targets, but can destroy the entire culture of a company.

6 Ways Poor Leadership Impacts Your Business

Let’s explore the potential impact poor leadership can have on your business. Spotting it early will help you to pivot in the right direction.

1. Loss of motivation to work

An article from the Community of Human Resource Management states that poor leadership can have a negative impact on the performance and morale employees.

Not only will they develop minimal commitment to their tasks, they'll also have no motivation to come up with innovative ideas or contribute to company growth.

2. Poor sales performance

According to AZCentral, the most direct result of poor leadership is poor sales.

As mentioned in the previous point, employees can lose motivation when working under a poor leader, which translates to low productivity.

In the sales industry, low productivity means missed targets. This has a direct impact not only on a salesperson's individual performance, but also on the company's overall financial gains (or, lack thereof).

Additionally, poor leaders do not fully maximize their staff members. They typically lack the necessary capacity to evaluate their employees' strengths and weaknesses.

Because of this, these employees are assigned roles that don’t bring out their strengths—which is detrimental to the company long-term.

3. Lack of ownership and transparency

A good leader is able to instill the value of ownership to his or her team members.

On the other hand, a bad leader makes people feel indifferent to taking responsibility over their own roles within the company.

Poor leaders also have the tendency of failing to be transparent to his or her employees.

Menlo Coaching believes that honesty is an integral trait of a great leader.

4. Mismanaged resources

Sales is not the only company function impacted by poor leadership. It can affect others as well.

Career Trend points out that time and expenses are usually wasted due to poor leadership. For instance, a lot of time ends up getting wasted in order to correct the wrong calls made by a bad leader or a mismanaged employee.

5. Poor work culture

Poor leadership, combined with low morale, will create a negative workplace environment.

This means that even workers who were not originally affected by the initial issues can become “infected” by this negative environment.

This low morale gradually spreads to all areas of the company.

Evaluating Poor Leadership

There is no room for poor leadership in your organization.

If you are a sales leader, take time to reflect on how you can challenge your own ideas about what it means to be a great leader. Actively work to ensure that you are enabling your team to be as effective as possible.

Take a step back and think about KPIs impacted by leadership including turnover and growth. Is turnover high? Are new employees leaving after a short tenure? Are tenured employees leaving after years of loyalty?

Analyzing your own leadership ability and that of your peers enables your company to recruit and keep those very employees that make your company successful.

Guest Author Biography

Before becoming a blogger, Jen worked in human resources, where she helped resolve company issues and worked closely with a variety of people. Aside from writing, she consults companies on employee development and management.