The Negative Effects of Passive Leadership in an Organization

After advising and consulting with a lot of for-profit and non-profit organizations, I’ve recognized that there is an epidemic of passive leadership in today’s world.

So what are we talking about when we’re considering passive leadership?  Here are some common traits:

  • Letting obvious conflicts within the workplace linger, with no plan to address or solve them
  • Recognizing problems in the organization and making an intentional decision not to deal with them
  • Ignoring opportunities to improve and grow as an organization

Do any of these tendencies sound familiar?

I just watched a highly successful organization go down in flames, simply because the passive leadership of the organization chose to be so.  It wasn’t always this way, though.

A Story of Passive Leadership

When this organization started, the founder bootstrapped everything and put in the long hours to ensure its success.  He actively managed the key areas of his organization. The founder knew that recruiting, training and mentoring of his employees was the secret to his success, so he focused on them.  He was highly involved and visible in his industry, and looked for any opportunity to bring additional publicity and promotion for his organization.  As a result, he put himself in a position of owning a highly successful organization with a lot of potential growth.

This founder had a lot of courage and boldness, too.  When he needed an infusion of cash, he made the profound decision of placing a classified ad to see if someone wanted to be an investor and partner in the business.  As it turned out, he was successful in finding an investor – and it took the business to a much higher level.  For years, it grew and produced a healthy amount of income for everyone concerned.

And then the situation changed.  The founder was diagnosed with Alzheimer’s.  Not only was he no longer the trainer and mentor of the organization, much of his insight was lost, too.

Dangerous Delegation

The ownership group decided to hire a manager to replace the founder.  This manager was a great guy with a lot of experience in running and designing systems, but there was one big problem: he wasn’t the the same guy as the founder.  He didn’t have the motivation, practical experience and abilities that the founder provided to the organization.  He was fine with maintaining the current operations, and nothing else.  And, frankly, he was okay with doing what the “Board” (the founder, his wife and the investor) told him to do.

For the first couple of years, there wasn’t any visible damage.  Everything looked pretty good, especially when the founder still had some day-to-day responsibilities.  But when the founder started to stay home and let things run on their own, that’s when it became obvious that the organization was heading into a nosedive.  New employees were being hired, but the training missed key areas.  Market trends were changing the industry and the organization didn’t make any changes – in large part because no one wanted to approve any changes in strategy or training.  Marketing the organization to prospective clients was the responsibility of the ground-level employees – who didn’t receive training and support in marketing.

Passive Thinking in Management

The manager told people about his commitment to follow the founder’s template of past success.  He chose, however, to overlook those things that the founder did well because it didn’t fit his personality.  The Board incorrectly assumed that the core values were being maintained: highly interactive training, mentorship, and performance measurement of employees.  As a result, the organization started to see a increasing decline in revenues which resulted in reactionary decisions.   Talented employees were leaving or let go as they were unsuccessful.  Long-term employees began to slow down their work as they were more focused on what was going on in the organization from an internal basis.  In reaction to these trends, the manager was increasingly busy building more systems.

The End

Revenues continued to drop, which resulted in a major pay cut for the manager.  Eventually he accepted a position at another place, even though he was responsible to manage the organization.  There was a lot of anger and confusion as he hired his wife to run the office on a full-time basis.  She was frustrated as she was unable to answer the key questions without consulting her husband, now busy with his new job.  Employees were trying to figure out what to do and what they could expect for the future.  Some of them gathered together to talk about options, including the idea of breaking away from the organization.  The manager and his wife found out about the potential mutiny of the remaining employees, which caused a lot of hard feelings and increased distance between the two parties. The place was a big mess, and it became worse every day.

Within six years of the founder’s departure from the day-to-day operations, the organization shut its doors.  The manager and his wife liquidated the assets and closed the doors of the office.  The employees, now out of work, faced the task to figure out the next step in their careers.

What could have been done?  Here are key points:

Key Points:

  • Take the time to realize what makes the organization successful and focus on growing those opportunities.  If you see declining results, you really need to avoid passive leadership. Lead the effort to find and change the negative trends.
  • If you’re leading, work on the most important areas of success for the organization with active effort and wise decisions.  Even if you don’t have the same personality as the one you are replacing or representing, you need to strategize on how you can build and improve on what made the organization a successful one.
  • Don’t leave it up to others to define what needs to be done or what will be successful.  Lead the effort and give impetus to growth and improvement.  You don’t have to be the one with all of the ideas.  You don’t have to be the one who puts the ideas into action.  Simply lead and lead well.
  • As Coach John Wooden used to say, “Don’t whine.  Don’t complain.  Don’t make excuses.”  All of these areas are passive leadership that create an environment of uninspired and unmotivated team members.  No one wants to hear you cry about a bad situation.  What they want is a plan they can believe in.
  • Don’t pretend to lead when you’ve quit on your team.  Regardless of the situation or the reasons for either your imminent or realized departure, be a stand-up leader and tell your team that you are leaving – and then create the best exit plan.  If possible, create as much of a solid transition plan and position everyone in the best situation.  Remember that everyone involved will most likely remember best what you did in your last days as a leader.  Passive leadership isn’t the legacy you want to leave in the memories of those you led.


Please understand that the people involved in the demise of this organization are really good people.  They never intended to create this bad situation.  The situation, however, was totally avoidable.

Be an active leader, wherever you are, whatever you do.

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