Bad Leadership: Why Good Leaders Make Bad Decisions

When leaders make good decisions, their teams succeed; when they make bad decisions, people suffer and results stall. Bad leadership can also push people to leave their roles, using a toxic workplace as a jumping-off point for the next stage of their careers. 

While it can be tempting to categorise all managers who make poor decisions as bad, there is a difference between making mistakes and truly negligent leadership. Many bad bosses go on to be great leaders, learning from missteps and drawing on the experience of those around them. So, what is bad leadership and how can bad managers learn from their mistakes?

What is bad leadership?

A 2024 study by Reward Gateway found that 65 per cent of Australian employees wouldn't describe their manager as appreciative and over 60 per cent reported that they didn't feel regularly recognised for their work. These can be considered as bad leadership traits.

Here are a few other commonalities to consider:

What makes a bad leader

• lack of empathy for others
• blaming others for their mistakes
• resistance to change
• poor communication skills
• dismissive of feedback and criticism
• lack of accountability
• prioritising their image
• assuming they have superior knowledge

Many people have incorrect assumptions about what makes a good leader. Hiring managers will sometimes short-list people with traits like ambition, perfectionism and competitiveness, mapping these traditional must-haves against things like time in the industry and experience. While someone can present as an ideal candidate on a resume, potential leaders won’t always have the same skills from applicant to applicant – recruiting managers must be willing to go a step further and read between the lines.

Why good leaders make bad decisions

There are many reasons why good leaders make bad decisions. Most try not to, others don’t realise they have until it’s too late and a few struggle to accept that they lack the skills to make better decisions. Leadership is a spectrum of experience, and while some lessons are more formative than others, most leaders and managers struggle for the same reason – they’re not quite sure how to approach their role and succeed.

Let’s explore some of the reasons why people might display the qualities of a bad leader.

Leadership is challenging

Put simply, working in a leadership role can be tough. Management and executive positions are often very competitive, making the people in them feel like they must constantly prove themselves to colleagues and stakeholders.

Leaders also need to manage a variety of personalities and will often work with others who exhibit the characteristics of a poor leader. It’s easy for leaders in this position to mirror the personalities around them in an attempt to fit in. However, good leaders must learn to resist this temptation and avoid making bad decisions for their companies, employees and themselves.

Many leaders are victims of self-enhancement bias

There is a disconnect between how employees see leaders and how leaders see themselves.

In general, leaders tend to rate themselves more highly than their employees do — a phenomenon called self-enhancement bias.

For example, a 2024 study conducted by Allianz found that 85 per cent of Australian managers believe they demonstrate care and empathy about their team's personal matters and how they can affect their job performance. However, only 46 per cent of employees feel the same way.

This suggests a lack of self-awareness in many leaders, which could prevent them from working on the necessary skills required to thrive within their roles.

Studying an MBA can help bridge this gap by equipping managers with relevant and up-to-date leadership skills.

5 tips for how to be a better manager and leader

One way that leaders can make good decisions and improve their skills is by learning from others. We spoke to CEOs, founders and managing directors to find out how to improve management skills.

1. Beware of overconfidence

“In many cases, overconfidence will cause bad decisions,” says David Sayce, CEO at Compare My Move. “If a good leader has experienced positive results for a long period of time, they may become overconfident in their abilities. While confidence is a good thing, it needs to be checked consistently to ensure it’s valid.”

2. Ask for advice

Sayce continues to explain that to be successful, leaders must be open to receiving advice from others. This includes asking for feedback from their teams and being aware of their knowledge gaps.

“If a leader isn’t seeking advice, it can lead to their downfall,” Sayce remarks. “They need to ensure the people around them aren’t afraid to challenge their thoughts and actions when, and if, it’s needed.”

3. Prioritise trust and honesty

Juliet Robinson, Managing Director at Big Goals, explains that leaders need to encourage trust and honesty within their teams.

“Leaders are less likely to make bad decisions when they’ve built a team where there is a high level of trust,” she says. “People need to know they can be honest if they don’t know the answer to something, need help or have made a mistake.

“By building this environment, the team is more likely to feel comfortable challenging a leader’s decision to get the best outcome.”

4. Embrace vulnerability

“Good leaders occasionally make bad decisions because they don’t allow themselves to be vulnerable,” says Robinson. “Even good leaders sometimes forget that they don’t need to know everything, and it’s okay to rely on their team.”

5. Reframe your role

Peter Benei, Founder of Anywhere Consulting, explains that managers need to interrogate the purpose of their roles to avoid falling into the trappings of poor leadership.

“Switch from being a power player — ‘I’m the leader; I will make the call’ — to a facilitator.

Benei explains that by taking this approach, leaders can grow more collaborative, productive and satisfied teams.

“Bad leadership means you are a power player, and you ignore what your team thinks. Being a facilitator not only helps you to get your team onboard with your decision, but it also boosts morale and engagement.”

Commitment to personal growth is vital

A key difference between good leadership and bad leadership comes down to self-awareness. Everyone makes mistakes, even the greatest leaders. Having the drive to learn and grow from such mistakes is what sets the best leaders apart.

A postgraduate degree equips you with essential leadership skills

According to an Ipsos study in 2024, 30 per cent of Australian workers reported that not feeling valued would be their main reason to consider leaving their roles. To address this concern, managers must have critical skills such as communication and emotional intelligence to create a work environment where their team members can feel empowered.

Leaders must demonstrate commitment to growth to hone these skills and thrive within their careers. They can achieve this through self-improvement or formal education, such as a postgraduate course in leadership or an MBA.

This postgraduate qualification empowers aspiring and established leaders by teaching valuable skills and helping them succeed. Students will develop abilities in:

• advanced leadership
• critical thinking
• expert communication
• risk management
• strategic thinking
• emotional intelligence

By learning from experienced professionals and collaborating with a diverse cohort, postgraduate students can take their skills to the next level and learn how to be a better manager and leader.

There are a wide range of options in Australia if you want to pursue a master's degree in leadership or an MBA, such as the following.

Advance your leadership skills today

Becoming a great leader is a lifelong process. Leaders must commit to constant learning and development to excel in their careers. Pursuing a postgraduate degree can be a valuable venture to help them hone their leadership skills. Discover various postgraduate courses in leadership and MBAs in Australia that can elevate your career prospects.