Executive Derailment: The “Dark Side” of Management

According to Lambardo & McCauley (1988), the term derail is when a manager who has the ability and is expected to go higher in an organization is instead fired, demoted, or plateaued below the expected levels of achievement. Derailment is a metaphor for a train coming off its tracks. Shockingly, between 30-50% of high-potential managers and executives derail during their business career. There are shocking similarities between a successful individual’s career and that of one headed towards derailment, so this paper will help us have a better understanding of the derailment process, the signs that it is hitting an individual, and how it can be prevented.

There are clear indicators and patterns in a person’s career that point towards this downward spiral called derailment; however, their career starts our very similar to that of a successful person. The individual is usually very bright, holds and outstanding track record, identified early as a “high potential employee,” personable, ambitious, sacrificial for the organization, has been moved up in authority, and excellent at motivating and organizing.

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The differences between a successful individual and one headed towards derailment will show up in areas such as track record, interpersonal style, composure, handling of mistakes, and solving problems.

For instance, an individual who is intelligent but headed towards derailment may be intellectually arrogant, putting down others whose opinions and ideas may not seem as helpful. Also, they may be a committed and focused person, but they are “workaholics” and close-minded. Another characteristic is ambition, but the individual may use manipulation to reach their goals.

Sometimes, when an individual seems to have so much potential for the company, it is easy to overlook their potential faults. “These derailers are often noted in advance, but frequently overlooked or forgiven because of the individual’s high potential or because their strengths were highly value.” Denton et. al. (2006).

So what does the process of derailment look like in an individual’s career? First, we see an early strength in that individual’s career become a weakness. For example, someone who is driven, focused and experienced may begin to become rigid, narrow-minded and a workaholic. Secondly, often times a deficiency is overlooked during the individual’s time in lower levels of hierarchy eventually begins to become a problem. These flaws may be discovered through different factors. The individual may suddenly have a clash with someone in authority above them, or there may be a boss covering for the individual’s faults who is replaced.

Usually problems arise and people are offended, causing an unwanted tension in the workplace, and giving light to the individual’s issue. Third, the individual may suddenly be exposed to extreme and unexpected challenges that they cannot handle. Finally, the success of the individual’s career and potentially a promotion may go to their head, causing an arrogant, disconnected attitude. Around 42% of executive derailment is a result of unethical or fraudulent behavior, 17% is caused by excessive aggression, 14% is caused by poor decision-making skills, 11% by error in judgment , another 11% caused by unreliable and deceptive communications, and a random 5% is caused by other miscellaneous reasons.

How do these derailment situations affect the company? First of all, business goals are not met, affecting company morale and decreasing productivity. There are also many expenses put on the company, from recruitment costs, wasted salary, relocation expenses, and replacement costs, derailment not only affects the individual, but also the company. At a lower level of employment, an individual’s derailing characteristics will only affect their immediate organization of function; however, in upper leadership levels, they affect the entire organization and almost everyone involved. It is important to fix a derailment problem in an organization, before it affects the entire company in a negative way. An organization must not be willing to tolerate derailing behaviors, and the executive has to believe that this is the case presently taking place in the company.

Most often, there are two options for preventing a derailing situation. First, a company can try to prevent derailment in its early stages. This involves being aware of the characteristics and causes and implementing an early warning system. This system should include feedback, coaching, developmental assignments, exposure to role models and mentors, coursework, and leadership challenges. Another key prevention method is to provide support during major changes in a company and an individual’s part in the organization. A rigorous interview and hiring process should help employers understand individuals and if they have the potential to derail. Also, a company should promote accountability throughout the entire organization in order keep people in constant communication and available to talk.

Executive derailment can be seen throughout the business world, in many stories of individuals and executives in companies. Many of these individuals started out extremely successful, but soon found themselves completely self-destructing. This past spring, the chief financial officer of my hometown was arrested and found to have stolen over 53 million dollars from our city over the course of 15-20 years. The city was enraged. This woman was in total power and authority, but she had no one holding her accountable or checking in on her. It was an expensive mistake for our city. Executive derailment affects everyone in a negative way, so it is important to take the necessary steps to prevent derailment in early stages, or completely avoid it in the first place.