Leadership In Crisis

No ship can set sail without a captain, and the same is true of businesses. Without the right leadership, a business will almost certainly fail even if the best possible employees are on hand. There’s a reason leaders in organizations get paid the big bucks.

Sometimes it’s the wrong fit, someone leaders get burned out and don’t step down or sometimes the leaders had no right being there in the first place. Still not convinced? Take a look at these five businesses that were destroyed because of poor leadership. They might still be active and flourishing today if someone else was at the helm.

1. Netflix

Who had the bright idea to split Netflix into separate paid services? The leadership, of course, and it was to detrimental effects. Netflix had the potential to take over and revolutionize the video industry, and in fact that’s exactly what it did when it took down Blockbuster. Nobody saw RedBox coming or the popularity of paid online streaming like Hulu Plus – including Netflix – until it was too late.

2. Blackberry
Remember when Blackberry was the ultimate status symbol, and nobody could fathom having any other type of smartphone? Blackberry has a history of nepotism, which often leads to poor leadership. The company also promotes people from within based on tenure rather than on skills and potential to actually lead. When competence isn’t the primary reason for a promotion, a company will surely sink.


3. Enron
This may be an extreme example of leadership gone corrupt, but it happened and is likely happening (perhaps on smaller scales) at other companies today. A number of Enron executives were found guilty for a variety of charges and are now serving long prison sentences. The takeaway lesson here is that they got away with it for years, and corrupt leadership caused financial ruin for hundreds of people.


4. Citi
Vikram Pandit simply didn’t have what it took to save Citi, which is why the company is now in bailout and basically owned by the government. He’s an example of a leader who should have never been put in the position, and should have had the foresight and courage to step down before taking down everyone else with him.


5. Merrill
Stan O’Neal wasn’t popular to begin with, and his incredible cost-cutting tactics earned him plenty of enemies. However, as the CEO of Merrill, he also became an ouster and he was in charge when Merrill had the biggest losses in nearly 100 years. He was then caught trying to merge with Wachovia behind the board’s back.
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It’s clear that poor leadership is poison to a business. However, keep in mind that it’s also important for everyone in a company to be invested. Many of these disasters could have been prevented if the leaders weren’t blindly trusted and given the keys to the kingdom. It’s a two-way street with both leaders and subordinates being held accountable.


Figuring out and strategizing leadership is something that should start in a business plan when a business is just beginning to stretch its limbs. Failure to plan and not having SOP in place are triggers for poor leadership, but it’s just so easy to skip over these steps in the early stages. Business owners too often think they can get around to these kinds of details later, but later never seems to come.


Perhaps if more startups focused on streamlining management protocol, foundations would be sturdier.