Why do internal appointments so often backfire? Hidden bias, rushed decisions, and poor oversight quietly erode performance, culture, and organisational value.
"The key to successful leadership today is influence, not authority."
– Ken Blanchard
Companies often go to great lengths to refine strategy, optimise operations, or pursue acquisitions. Yet one of the most overlooked threats to enterprise value comes from within: poor internal leadership placements. These hidden missteps not only slow performance but quietly erode morale, culture, and competitive advantage.
While external hiring decisions typically receive scrutiny and structure, internal executive appointments often bypass formal evaluation. That is where some of the costliest and most enduring mistakes occur, yet few organisations confront this issue directly.
This article explores why internal placements so often go wrong, what is really at stake, and how to improve this critical decision-making process.
Why Do Internal Placements Fail So Often, and Why Are They So Damaging?
- Decisions made by only a few: CEO-led or board-driven choices often exclude broader stakeholder input, limiting constructive challenge or discussion.
- Hasty, instinct-led selections: Many placements happen quickly, driven by gut feeling rather than thorough analysis or preparation.
- Lack of accountability: When an internal hire underperforms, those responsible for the decision rarely face consequences.
- Short-term cost savings: Redeploying underutilised executives may appear efficient, but the long-term costs of a poor fit can be severe.
- Difficult-to-measure consequences: Cultural erosion, leadership friction, and lost momentum are hard to quantify but deeply damaging.
It is no surprise that miscast leaders often fail. For example, executives with strong analytical skills and attention to detail—effective at streamlining processes and driving efficiencies—may struggle in roles that demand innovative strategy in fast-changing industries. Yet many CEOs and investors continue to rely on favoured candidates, assuming past performance will guarantee future success. This assumption often leads them to overlook critical factors such as personality, cultural fit, motivation, and other attributes essential to success.
It is alarming how frequently these mismatches occur, and how little is done to prevent them. When someone attempts to challenge these appointments, they are often without the tools, authority, or support needed to intervene effectively.
How to Prevent Missteps in Internal Executive Appointments
The first step is simple: recognise the risk. Too often, internal placements are treated as routine decisions—until they lead to underperformance, misalignment, or costly reversals.
Recognition alone, however, is not enough. Leaders must commit to avoiding shortcuts. HR policies and succession plans offer guidance, but they are not foolproof. What is needed is true oversight and objective challenge, especially when decisions are made quickly, politically, or based on loyalty.
To break this cycle, oversight must begin internally. Appoint someone—such as a board member or Chief HR Officer who is not overly influenced by the CEO—with the authority to question internal placements. This person should understand the business, be trusted, and act independently. If concerns arise, the process should pause, and discussions should be held at the highest levels—whether in board meetings, nomination committees, or senior leadership forums—until a clear and well-supported decision is made.
For higher-risk roles, consider bringing in an external expert. A headhunter or independent adviser can offer an unbiased view, benchmark internal candidates against external talent, and highlight red flags others may miss. If concerns are raised, they should inform the decision, not derail it. The real risk lies in ignoring them.
Getting internal appointments right does not require a complex system. It requires discipline, objectivity, and a willingness to ask hard questions before taking easy decisions.
Final Thought
Internal placements often feel safe and familiar, but comfort does not equal correctness. Misjudged executive appointments can quietly undermine performance, weaken culture, and cost millions in lost opportunity. Unlike market shifts or external shocks, this is a risk entirely within a company’s control. Boards, CEOs, and investors must begin to treat internal executive selection with the same rigour as capital allocation or strategic planning. Because when the wrong person holds the “right” seat on paper, the entire organisation bears the cost.
