Strategic alignment: how to avoid the costly pitfalls of an ill-fitting executive

It starts with excitement.

A new executive joins the team. Their CV sparkles, their references glow, and their charisma impresses the board and everyone else during the interview stage. There’s a collective breath of anticipation; finally, the leadership team feels complete.

But fast forward a few months, and the story unravels.

Deadlines are missed. Decisions are delayed. Senior staff are leaving. Projects stall. The culture shifts, but not for the better. Morale plummets, trust erodes, and the board is left wondering: where did we go wrong?

Sadly, this isn’t rare. Hiring the wrong executive leaders is an all-too-common scenario that quietly drains organisations of momentum, morale, and millions.

Direct costs can total hundreds of thousands of dollars —recruitment firm fees typically run from 25%–35% of the candidate’s total first-year compensation (retained search). For a $300K executive role, that’s $75K–$105K upfront. Plus there’s onboarding and relocation expenses, termination payouts and legal costs. 

However, what runs even deeper are the indirect costs, such as lost productivity, disrupted teams, delayed strategies, and revenue shortfalls.

In fact, research has shown that a poor hire at manager level can cost more than three times their annual salary.

There’s also the opportunity cost – according to McKinsey, a top-performing a critical role can be up to 800% more productive than an average one. Every month spent with the wrong leader in place is a month of opportunity squandered.

As well as the direct and indirect costs, the wrong hire has a ripple effect across the organisation.For example, in healthcare, the wrong hire can flow down to care delivery, funding, and accreditation risk.

But there is something even deeper than these immediate impacts. Bad leadership sends a silent message throughout the company: this is what we accept. And that message can be more damaging than any single resignation or failed project.

The cultural cost is where the damage truly multiplies. With the wrong leader, disengaged employees stop innovating and start looking for the exit. Research has found that nearly half of people have quit a job because of poor culture. 

And not only do good employees move on, but when they do, they carry their experience with them, which may damage the employer brand and make future hiring harder – according to the same research, around 70% of people have turned down a job because of poor cultural fit.

Toxic leadership styles also create fear and stifle initiative. The impacts are significant; as this research highlights, 87% regularly witness declines in team productivity due to toxic leadership.