Why Leaders Derail - Shadows of Success in a Changing World

 

The Paradox of Downfall

The downfall of leaders exerts a strange fascination. In every civilisation, stories are told not only of great leaders who built institutions or nations but also of how those same figures stumbled dramatically. The Athenians gathered to watch Oedipus and Agamemnon undone by fate; Elizabethans thrilled at Lear or Macbeth. In our age the theatre is different — not chorus and stage but press conferences, boardrooms, and social media storms — yet the drama is familiar. A leader rises, triumphs, and then falls, sometimes swiftly, sometimes through a slow erosion of credibility. Leaders rarely derail because they are mediocre. They derail because their very strengths become their undoing. Courage turns into recklessness, confidence into arrogance, vision into delusion. Aristotle described this as the excess of virtue; Shakespeare called it tragic flaw. In the twenty-first century, investor impatience, digital transparency, and relentless scrutiny accelerate the cycle of rise and fall. Derailment is not aberration but systemic risk. To understand leadership fully, we must study not only success but derailment — the shadow that follows achievement.

I. The Spectacle of Derailment: Recent Cases, Ancient Echoes

Contemporary business and politics abound with derailments. Carlos Ghosn, celebrated as Nissan’s saviour, was arrested in 2018 on charges of misconduct, his daring escape from Japan adding operatic flair to his downfall. Adam Neumann built WeWork into a global phenomenon, but erratic behaviour and governance lapses destroyed billions in value. Chanda Kochhar of ICICI Bank resigned amid conflict-of-interest allegations; Vishal Sikka of Infosys left after cultural clashes with founders; Byju Raveendran’s edtech empire unravelled under debt and mistrust. McKinsey (2022) found over half of CEO departures globally were unplanned, many forced by boards. PwC reported misconduct-related exits had nearly doubled in two decades. 

Political life mirrors this. Nixon, undone by Watergate; Berlusconi, consumed by scandal; Boris Johnson, felled by loss of party trust. The arc is ancient: hubris, blindness, retribution. Sophocles dramatised it, Shakespeare refined it, and modern headlines replay it. Derailment is not anomaly; it is archetype.

II. Literature on Derailment

Scholars have studied derailment through multiple lenses. The Center for Creative Leadership (CCL) pioneered systematic research. Lombardo & McCauley, and later Lombardo & Eichinger, showed derailers were not incompetence but strengths overplayed: ambition into self-serving behaviour, confidence into arrogance, detail into micromanagement. Their influential 'FYI: For Your Improvement' catalogued derailers and prescribed developmental assignments. Lombardo & Eichinger also advanced 'learning agility' — the capacity to learn from experience — as critical to avoiding derailment. Leaders high in learning agility recover from mistakes; those low repeat them.

Psychodynamic thinkers like Manfred Kets de Vries emphasised the unconscious. Leaders act out inner theatres shaped by childhood. Narcissists crave admiration and collapse without it. Perfectionists strangle teams with control. Paranoids alienate allies with suspicion. Clinical categories sharpen the view: narcissists brittle, sociopaths manipulative, psychopaths cold. Jung’s notion of the shadow applies: traits repressed resurface destructively. Freud’s repetition compulsion explains why leaders recreate old patterns until crisis forces rupture.

Developmental theorists reframed derailment as plateau in growth. Robert Kegan mapped adult meaning-making: socialised minds dependent on approval; self-authoring minds guided by internal compass; self-transforming minds integrating paradox. Nick Petrie distinguished horizontal growth (skills) from vertical growth (operating system). Leaders often collect horizontal tools but fail to grow vertically. Complexity outpaces capacity, and derailment follows. Wittgenstein’s dictum — 'the limits of my language mean the limits of my world' — captures the trap.

Elliott Jaques highlighted 'time-span of discretion': derailment occurs when cognitive horizon mismatches role complexity. Gillian Stamp extended this through her Matrix of Working Relationships and Tripod of Leadership. Leaders fail when they cannot shift relational stance — directive, consultative, systemic — as context demands. Derailment is often relational illiteracy as much as cognitive lag.

Barbara Kellerman identified seven bad leadership types: incompetent, rigid, intemperate, callous, corrupt, insular, evil. Each represents a derailment path where leaders actively harm. Herminia Ibarra showed identity rigidity as risk: leaders clinging to outdated selves — entrepreneur, rescuer, insider — derail when context demands reinvention. Mihaly Csikszentmihalyi’s flow theory adds nuance: derailment occurs when challenge overwhelms or bores capacity, driving anxiety or disengagement.

Nitin Nohria & Anthony Mayo emphasised historical context. Leaders succeed or fail depending on alignment with their 'era.' Ram Charan’s Leadership Pipeline describes derailment at career passages: from managing self to managing others, to managing enterprises. Sumantra Ghoshal stressed context and purpose: leaders who create toxic climates derail themselves and others. Together, these literatures show derailment is multi-causal: psychological, developmental, relational, systemic.

III. The Anatomy of Derailment

Five themes explain derailment. First, strengths overused. Virtue untempered becomes vice. Courage into recklessness, vision into delusion. Kalanick’s aggression built Uber and destroyed trust. Welch’s efficiency at GE sowed fragility. Aristotle and Shakespeare anticipated this: excess breeds downfall.

Second, failures of vertical growth. Leaders accumulate tools but resist transforming meaning-making. They plateau at self-authoring minds, unable to embrace paradox. Complexity outruns cognition. Icarus soars on the same waxen wings until they melt. Leaders fall when their interpretive grammar no longer maps reality.

Third, relational breakdowns. Leadership is trust. Boards, teams, stakeholders sustain leaders until confidence erodes. Vishal Sikka’s exit from Infosys reflected cultural dissonance more than competence. Boeing’s 737 MAX crisis deepened when regulators and engineers lost faith in executives. Gillian Stamp shows derailment often follows failure to shift relational mode: from authoritative to consultative, from transactional to systemic.

Fourth, psychological vulnerabilities. Under stress the inner theatre erupts. Narcissists lash out, sociopaths exploit, psychopaths corrode. Elizabeth Holmes embodied narcissistic fragility; Adam Neumann manic charisma; Carlos Ghosn paranoid control. Freud’s repressed returns, Jung’s shadow erupts. Leaders fall from what they deny.

Finally, systemic misfits. Organisations design derailment by poor governance, misaligned culture, collusive boards. Chanda Kochhar’s case exposed governance gaps. Infosys’ founder conflicts revealed cultural fissures. Jaques and Stamp remind us: derailment is often institutional as much as individual.

IV. Implications for Leadership Development

How can derailment be mitigated? First, early identification. Hogan Development Survey predicts derailers. Lombardo & Eichinger’s learning agility highlights who adapts and who repeats errors. 360-degree feedback surfaces blind spots before they metastasise.

Second, developmental ecosystems. Petrie prescribes heat experiences, colliding perspectives, deliberate reflection. Stamp’s tripod insists on balancing task, people, and systemic exposure. Leadership development must move beyond classrooms to crucibles that stretch identity.

Third, governance stewardship. Plato’s ship of state metaphor reminds us leaders need ballast. Boards must balance vision with restraint, guard against hubris, and anchor ethics. Madison’s checks and balances apply in corporations as in states. Boards that collude accelerate downfall.

Fourth, recovery and renewal. Derailment is not always terminal. Steve Jobs, ousted from Apple, returned transformed. Howard Schultz re-entered Starbucks stronger. Nandan Nilekani re-anchored Infosys. Eastern wisdom underscores renewal: Kabir likened life to a millstone grinding ego; the Gita teaches detachment from outcomes. Derailment can be crucible as much as catastrophe.

V. Closing Reflections: The Universal Drama

Derailment is archetype, not anomaly. Nietzsche warned of overreach, Kierkegaard of dread, Wittgenstein of limits. Indian sages counsel humility and detachment. Leaders derail not from mediocrity but humanity: ambition, vulnerability, bounded growth. Success magnifies both light and shadow. The task of leadership development is not flawless leaders — impossible — but systems where shadows are acknowledged, strengths tempered, growth sustained. Derailment teaches. It signals where growth stalls, where humility is absent, where renewal is required. To anticipate and learn from derailment is the deepest challenge of leadership in our turbulent age.