Selecting Leaders: The Mistake That Costs You Everything

Selecting leaders is one of the highest-leverage decisions a business makes, and one of the most consistently mishandled. Get it right and you multiply the capability of everyone around them. Get it wrong and you spend the next 18 months managing the fallout.

Most hiring processes are built to find people who interview well, not people who lead well. Those are different skills, and confusing them is expensive.

Why Most Leadership Hiring Goes Wrong Before the Interview Starts

The failure usually happens in the brief. Businesses write job descriptions that describe the person they just lost, or worse, an idealised version of someone who never existed. They optimise for credentials and sector experience, and underweight the things that actually determine whether someone will succeed in that specific environment, with those specific people, at that specific stage of growth.

I have made this mistake myself. When I was scaling a performance marketing agency from around 20 people toward 100, I hired a senior leader based largely on their track record at a much larger business. The experience was real. The capability was real. But the context was completely different. They were used to having infrastructure, process, and support functions that we simply did not have. They struggled to operate without those things, and I had not been honest enough in the brief about what the environment actually looked like day to day. That is on me, not them.

The brief needs to describe the reality, not the aspiration. What does this person walk into? What is broken? What is working? What will they need to build versus inherit? What kind of pressure will they face in the first six months? If you cannot answer those questions before you start hiring, you are not ready to hire.

This is part of a broader pattern that affects go-to-market execution as much as internal hiring. When teams lack clarity on what they are actually trying to achieve, and who is accountable for achieving it, everything downstream suffers. If you are thinking through how leadership selection connects to your wider commercial strategy, the Go-To-Market and Growth Strategy hub covers the structural decisions that sit behind effective execution.

The Promotion Trap: When Your Best Performer Becomes Your Worst Manager

Promoting the highest performer into a leadership role is one of the most common and most damaging decisions in business. It feels logical. They know the work, they know the clients, they know the team. But leadership is a fundamentally different job, and the skills that make someone exceptional at execution rarely translate automatically into the skills that make someone effective at enabling others to execute.

What you tend to get when you promote a top performer without proper assessment is someone who reverts to doing the work themselves when things get difficult. Because that is what they are good at. They micromanage not out of malice but out of habit and anxiety. They struggle to delegate because they have never had to before. And the team underneath them either stagnates or leaves.

The question to ask before promoting anyone into leadership is not “are they the best at this?” but “do they make the people around them better?” Those are different questions with different answers, and conflating them costs businesses a great individual contributor and gains them a mediocre manager.

BCG has written about how the alignment between people strategy and commercial strategy is a structural advantage, not a soft HR concern. Their work on the intersection of marketing and HR makes the case clearly: who you put in leadership roles shapes what your go-to-market capability actually looks like in practice.

What a Good Leadership Interview Actually Tests

Most interviews test for confidence, communication, and the ability to give structured answers to structured questions. Those are useful signals, but they are not leadership signals. They are presentation signals.

The things that actually matter in a leader are harder to surface in a 45-minute conversation: how they handle ambiguity, how they behave when they are wrong, how they make decisions under pressure, how they respond to pushback, and whether they build trust or just project authority. None of those show up reliably in a competency-based interview where the candidate has had a week to prepare their examples.

Some of the most revealing moments in leadership assessment come from unstructured conversation. Ask someone to walk you through a decision they got wrong and what they did next. Not what they learned in the abstract, but what they actually did differently. Ask them about a time they had to tell a team something they did not want to hear. Ask them about a situation where they disagreed with their own leadership and how they handled it. The quality of those answers tells you more than any competency framework.

I remember sitting in a pitch debrief years ago where a candidate for a senior role gave a textbook answer to every question. Structured, articulate, confident. And something felt off. We pushed on one of the examples and it became clear the story was heavily edited in their favour. The messiness had been removed. Real leadership experience is messy. If someone’s examples are too clean, they are either very lucky or not being straight with you.

The Cultural Fit Problem: Signal or Bias?

Cultural fit is a legitimate consideration in leadership selection. A leader who fundamentally clashes with the operating norms of a business will struggle to build trust and get things done, regardless of their capability. But cultural fit is also one of the most abused concepts in hiring, and it is worth being honest about when it is doing useful work and when it is just a polite way of filtering out people who challenge the status quo.

The test is simple: are you looking for someone who fits the culture you have, or someone who can build the culture you need? Those are not the same thing. If a business is trying to grow, improve, or change direction, hiring leaders who are comfortable replicas of the existing team is unlikely to produce different outcomes.

When I was turning around a loss-making agency, one of the most important hires I made was someone who operated very differently from the existing leadership team. Different communication style, different commercial instincts, different tolerance for ambiguity. There was friction early on. But that friction was productive. It surfaced assumptions the team had stopped questioning. The business needed that challenge, and hiring for cultural comfort would have meant missing it entirely.

The distinction worth making is between culture fit and values alignment. Values alignment matters: honesty, accountability, the willingness to have difficult conversations. Culture fit, in the superficial sense of “do they feel like us,” is a much weaker signal and a much stronger source of bias.

The 90-Day Test: What New Leaders Reveal About Your Selection Process

If a new leader is struggling at 90 days, the instinct is often to blame onboarding. Sometimes that is right. But more often, the 90-day performance is a retrospective signal about the quality of the selection process. The problems that surface in the first quarter are usually visible in the interview data if you look for them honestly.

A leader who cannot build relationships with their team in 90 days probably showed signs of low interpersonal curiosity in the interview. A leader who avoids difficult decisions in their first quarter probably gave answers in the interview that were heavy on analysis and light on action. A leader who creates confusion about priorities probably could not articulate a clear point of view when you pushed them on it.

The 90-day period is also when you find out whether you were honest enough in your own brief. If the leader is surprised by the reality of the role, that is a briefing failure. If they are overwhelmed by the pace or the ambiguity, you may not have been clear about what the environment actually demands.

One practice worth building into any leadership hire is a structured 30-day check-in that is explicitly not a performance review. The purpose is to surface surprises, on both sides. What has the leader found that they did not expect? What has the business found that the selection process did not surface? That conversation, done honestly, is more valuable than any amount of onboarding documentation.

Internal vs External: When to Promote and When to Hire In

There is no universal answer to whether you should promote internally or hire externally for leadership roles. Both have real advantages and real risks, and the decision should be made based on what the business actually needs, not on a default preference for one approach or the other.

Internal promotion has genuine advantages: the person knows the business, the clients, the team. They have built relationships and credibility. The transition is faster and cheaper. And promoting from within sends a signal to the wider team about what progression looks like, which matters for retention.

But internal promotion also carries a specific risk: it can entrench existing thinking at exactly the moment a business needs fresh perspective. If you are trying to grow into a new market, improve commercial performance, or change how the business operates, someone who has only ever seen one way of doing things may not be the right choice, regardless of how capable they are.

External hiring brings outside perspective and, ideally, experience of challenges the business has not yet faced. The risk is integration: an external hire who cannot adapt to the context, or who underestimates how different the new environment is from the one they came from. The failure rate for external leadership hires is higher than most businesses want to admit, and the cost of that failure, in time, money, and team morale, is significant.

The decision framework I use is straightforward: if the business needs to do more of what it already does, better, an internal promotion is usually the right call. If the business needs to do something it has not done before, external hiring is worth the risk and the cost.

This connects to a broader point about how businesses structure their growth plans. Market penetration strategy and leadership selection are more closely linked than most businesses acknowledge: the leaders you choose shape the commercial moves you are capable of making.

The Signals Most Businesses Miss

After two decades of hiring, being hired, and watching leadership decisions play out across dozens of businesses, there are a handful of signals that consistently predict leadership effectiveness and that most selection processes consistently miss.

The first is how a candidate treats people who are not in the room. How they talk about former colleagues, former managers, former clients. Not whether they have criticisms, everyone does, but whether those criticisms are fair, proportionate, and free of contempt. Contempt for people who are not present is a reliable predictor of how someone will behave when things get difficult.

The second is intellectual honesty. Does the candidate acknowledge the limits of their own knowledge? Do they say “I don’t know” when they don’t know, or do they fill the gap with confident-sounding noise? Leaders who cannot admit uncertainty create environments where uncertainty gets hidden, and that is where businesses get into serious trouble.

The third is how they respond to being challenged in the interview itself. If you push back on something they have said and they either immediately capitulate or become defensive, both are warning signs. The response you are looking for is someone who engages with the challenge, thinks about it, and either updates their position with a reason or holds it with a reason. That is what good judgment looks like under pressure.

The fourth is energy management. Not enthusiasm, energy management. Leaders who perform high energy in every conversation are often running on adrenaline and approval. The leaders who sustain high performance over time tend to be quieter about it. They are consistent rather than spectacular. That consistency is what teams actually need.

There is a useful parallel here with how go-to-market teams think about pipeline quality versus pipeline volume. Vidyard’s research on GTM team performance makes the point that volume without quality creates noise, not revenue. The same logic applies to leadership selection: a long list of impressive-sounding candidates is not the same as a strong shortlist.

Building a Selection Process That Works

A leadership selection process worth running has a few non-negotiable components. First, a brief that describes the reality of the role, not the aspiration. Second, a structured set of assessment criteria that are agreed before the process starts, not reverse-engineered to fit the preferred candidate afterward. Third, multiple perspectives: no single person should make a leadership hire alone, because individual bias is too strong a distorting force.

Fourth, and this is the one most businesses skip: a reference process that is actually rigorous. Not a box-ticking exercise where you call the two referees the candidate has pre-selected and ask whether they were a good person to work with. A reference process that seeks out people who have managed the candidate, been managed by them, and worked alongside them at peer level. And that asks specific questions about specific situations, not general questions about general impressions.

The most valuable reference call I ever had was with someone who was not on the candidate’s reference list. A mutual contact who had worked with them at a previous business. That conversation told me things that three formal reference calls had not surfaced, and it changed my decision. That is not a comfortable process, but it is an honest one.

Finally, build in a decision review point where the hiring panel asks explicitly: are we hiring this person because they are the right choice, or because we are tired of the process? That question sounds obvious, but the pressure to close a search is real, and it produces compromised decisions more often than most businesses want to acknowledge.

Leadership selection is not a standalone HR exercise. It is a strategic decision that shapes commercial capability, team culture, and the speed at which a business can execute. If you are working through how these decisions connect to your broader growth architecture, the Go-To-Market and Growth Strategy hub is worth spending time in.

About the Author

Keith Lacy is a marketing strategist and former agency CEO with 20+ years of experience across agency leadership, performance marketing, and commercial strategy. He writes The Marketing Juice to cut through the noise and share what works.

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