When growth hides problems: The leadership challenge organizations face today

By Sandra Oliver, Impact Founder

Many organizations experienced extraordinary growth over the last few years, when demand surged and talent was scarce. Leaders were under pressure to scale quickly, deliver results, and move faster than ever before. And in many companies, this rapid growth hid problems.

Processes that worked at one size stopped working at another, standards became inconsistent, and strong performers burned out. Leadership gaps widened, and difficult behaviours were tolerated because the business was still succeeding financially.

In some organizations, leaders became so focused on growth that operational discipline, culture, governance, and risk management quietly weakened underneath the surface.

Now the cleanup has arrived.

More leaders are stepping into businesses, practices, and divisions that look successful externally, but internally are carrying operational, cultural, financial, or reputational strain. And many are discovering that turnaround leadership requires a completely different approach than leadership during normal operations.

The leaders who excel in stable environments aren’t always the leaders who succeed in a turnaround. Turnarounds require leaders who can:

• Tolerate pressure and resistance.
• Make difficult decisions quickly.
• Create clarity in ambiguity.
• Communicate consistently.
• Maintain emotional steadiness during uncertainty.
• Confront issues directly without becoming reactive or political.

Leadership alignment should be the first step

Most importantly, turnaround leaders understand that execution alone isn’t enough.

One of the most common reasons turnarounds fail is that senior stakeholders hold different versions of reality. Some leaders minimize the severity of the issues the organization faces, while others quietly resist difficult decisions because of politics, relationships, or fear of disruption. This starts at the board and includes all of senior leadership. Addressing these discrepancies and aligning leadership for the changes ahead is what the turnaround leader has to focus on first.

Before meaningful change can occur, leadership teams need:

• A shared understanding of the problem.
• Agreement on priorities and non-negotiables.
• Visible public alignment.
• Clear and consistent messaging cascading through the organization.

People don’t need perfection from leadership during difficult periods, but they do need consistency. Mixed messages, quiet disagreement, or unclear priorities can lead to organizational paralysis very quickly. Strong turnaround leaders know this and spend significant time aligning the senior team before asking the broader organization to change.

Because ultimately, an organization’s culture changes through leadership behaviour. And while turnarounds are some of the hardest assignments in leadership, they’re often the moments that define leaders permanently. Those who can successfully navigate them develop a level of judgment, resilience, and credibility that can’t be built in easier environments.

In our next Insight, we’ll outline the four key steps leaders need to take to help ensure their turnaround is successful, and that they can lead their people and the whole organization into the future with confidence.