Do Leaders Really Matter?

Some of the fastest growing organizations I have seen were led by very difficult people.

This reflection draws on experiences from a few organizations I have worked with over the years in the development and corporate sectors.

For a long time I assumed that good leadership was the main reason organizations succeed. That is what most management books suggest.

But over the years my own experience has made me less certain.

I have seen several organizations grow rapidly under leaders who were difficult, insecure, or even toxic. At the same time, I have also seen capable and decent leaders struggle to build institutions.

These observations come from many years of working across very different kinds of institutions. And they have often left me wondering: how much do leaders really matter in organizations?

Early Lessons

When I moved into the development sector, I joined a consulting organization whose founder had built an extraordinary network among senior civil servants and international agencies. Because of those connections, assignments came regularly.

Inside the organization, however, the atmosphere was quite unpleasant. The founder trusted very few people. He micromanaged constantly. The work environment was tense and often toxic.

Yet the organization grew rapidly. During the years I was there it expanded almost tenfold.

Later I worked with a development organization trying to apply technology to agriculture. The founder was exceptionally bright and deeply committed to the cause. But he also wanted to control almost everything. Strategy, partnerships, even routine decisions.

People gradually became frustrated. Many capable professionals left.

But the organization kept growing. The idea itself was powerful. Technology for agriculture was attracting attention and support. Networks were strong and the sector was expanding.

I encountered something worse while consulting for a rural development organization. Its leader was intellectually formidable and widely respected. Yet he treated colleagues with a degree of disdain that made it difficult for many talented people to stay for long.

Still, the organization continued to grow.

The Same Pattern Elsewhere

Even in the corporate world the pattern is not unusual. A relative working as a director in a large business house once told me that most important decisions were simply attributed to “Lalaji,” the owner. Authority flowed from the individual rather than from institutional processes. My wife had a similar experience early in her career in another business group where abusive language from the owner was not unusual.

And yet these organizations prospered.

The Leadership Puzzle

Experiences like these make me pause whenever leadership is described as the decisive factor behind organizational success.

Sometimes organizations grow simply because they are in the right sector at the right time. Sometimes strong networks bring a steady flow of opportunities. Sometimes capable professionals within the organization keep things moving despite the culture at the top.

But there is another side to this story.

Organizations that grow under domineering or insecure leaders often pay a hidden price. Talented people leave. Initiative declines. Decisions become centralized. The institution becomes dependent on the personality at the top.

Growth happens, but maturity does not.

From Organizations to Institutions

This is where leadership truly matters.

A good leader gradually builds systems that outlast him. Authority shifts from the individual to the institution. Decisions become more distributed. Professional competence begins to matter more than proximity to the founder.

Many family-owned or founder-led organizations struggle to make this transition. Some remain extensions of the founder’s personality for decades. Others evolve into professional institutions with stronger cultures and deeper capabilities.

The difference between the two often lies in the leader’s ability to step back and allow the organization to grow beyond himself.

So perhaps leadership does not always determine whether an organization grows.

But it often determines whether the organization eventually becomes a mature and enduring institution.

In the end, leadership is not only about building organizations.

It is about building institutions that can eventually function without the leader.

Organizations may grow through opportunity and circumstance. Institutions are built through leadership.