Leaders often fail to create clarity not out of malice, but because it is intellectually difficult and politically risky. Setting clear priorities forces tough trade-offs and can make some teams feel less important, which threatens a leader's own narrative and sphere of influence.

Companies mistakenly bundle management with authority, forcing top performers onto a management track to gain influence. Separate them. Define management's role as coordination and context-sharing, allowing senior individual contributors to drive decisions without managing people.

Dysfunctional leadership creates a self-sustaining cycle where employees vying for promotion mimic the toxic behaviors of their boss. They do this to endear themselves to the decision-maker, believing that demonstrating a better leadership style would disqualify them from the role.

Formal board meetings are often performative. The true direction is set in informal discussions dominated by the largest shareholder and the board member with the most gravitas, not by the entire group.

A key source of executive team dysfunction is the "empire builder"—a leader who is skilled at managing up but is ineffective in their role and hard on their team. A strong CEO identifies and removes these individuals quickly to maintain a high-performance culture.

Structure your organization with employees at the top and managers at the bottom. This re-frames a leader's primary role as one of support—listening and removing obstacles to help their teams execute more effectively. It shifts the leader's focus from directing to enabling.

All founders make high-impact mistakes. The critical failure point is when those mistakes erode their confidence, leading to hesitation. This indecisiveness creates a power vacuum, causing senior employees to get nervous and jockey for position, which spirals the organization into a dysfunctional, political state.

Drawing on personal experience, Jonathan Lewinsohn argues that office politics are "deadly" to organizations. He was a better investor when he could focus solely on investing, not internal positioning. A flat, transparent structure is a competitive advantage that eliminates this drag.

Companies like Amazon and Meta that cut middle management are not necessarily wrong to flatten their organization, but they err by doing so without first redesigning the underlying system. The true mistake is removing the people responsible for coordination and decision-making without fixing the processes they managed, leading to chaos.