THE ISSUE
When that house of cards a former boss had created to make me feel safe, valued and understood, finally came down I could suddenly see him for what he was. And his game plan, which didn’t foresee a very comforting role for me.
I fell deep and I knew who I had to blame. It was easy. It was obvious.
But was it really? Did I see the whole picture?
And don’t we love that myth of the toxic individual? The narcissist who slipped through the cracks. The manipulator who fooled everyone. It’s a comforting story, because it keeps the system innocent. But here is the uncomfortable truth: often organizations do not accidentally promote toxic leaders. They do it systematically, repeatedly, and often with full structural support. The individual is not the anomaly. The system is the engine.
WHAT THE RESEARCH SAYS
Decades of organizational research consistently show that toxic leadership is not a random byproduct of hiring mistakes. It is, in large part, a predictable outcome of how organizations are designed.
Research on narcissistic leadership has demonstrated that individuals high in narcissistic rivalry actively manage upward perception through ingratiation, self-promotion, and selective information sharing — and that these tactics are frequently misread as indicators of leadership potential (Fehn & Schütz, 2020). In competitive, high-pressure environments, these traits don’t raise red flags. They raise promotions.
Equally important is the toxic triangle framework: the convergence of destructive leaders, susceptible followers, and conducive environments. A case analysis of a public university found that an environment lacking fundamental checks and balances, combined with instability and perceived threats, created precisely the conditions that brought a toxic leader to power — and kept them there (Pelletier, Kottke & Sirotnik, 2019). Toxic leadership rarely thrives in a vacuum. It requires an organizational context that rewards short-term results over relational health, tolerates power asymmetries, and lacks meaningful accountability mechanisms. Remove any one side of the triangle, and the dynamic weakens. But most organizations never examine the triangle at all. They only ever look at the individual at the top.
Research on promotion decisions further reveals a structural bias: performance metrics in most organizations are output-focused and short-term oriented. A leader who drives results through fear, extraction, and psychological pressure may score exceptionally well on quarterly KPIs, while the human cost remains invisible in the data. Organizations, in other words, are often measuring exactly the wrong things.
IN PRACTICE
Consider a pattern that appears across industries with striking regularity. A senior manager is known internally for creating a climate of fear. Employees avoid escalating concerns because past attempts led to retaliation: subtle, deniable, but effective. HR receives occasional signals: above-average turnover in that team, a spike in sick leave, vague complaints that never quite crystallize into formal grievances.
And yet, the manager’s performance review is strong. The numbers are good. They are articulate in leadership meetings and skilled at managing upward. Two years later, they are promoted.
This is not a failure of individual judgment. It is a systemic failure: an incentive structure that rewards visible output and ignores invisible damage, a complaint architecture that protects the organization more than the employee, and a promotion process that never asks the structural question: what has this person’s leadership cost the people around them?
THE STRUCTURAL QUESTION
The question organizations should be asking is not “how did this person get through?” but “what in our system created this outcome?”
Three structural gaps tend to appear repeatedly:
1. Incentive misalignment. When leaders are evaluated primarily on financial outcomes or project delivery, the relational and psychological dimensions of leadership become externalities: real costs absorbed by employees, invisible to the system.
2. Accountability asymmetry. Formal complaint processes are rarely designed with power differentials in mind. Reporting a direct superior carries enormous personal risk: career risk, social risk, and often psychological risk. Systems that do not actively compensate for this asymmetry will systematically underreport toxic behavior.
3. Governance blindness. Boards and senior leadership often lack the tools, incentives, or mandate to scrutinize leadership culture below the executive level. Toxicity can persist for years within a single department while remaining entirely invisible at the governance level.
Each of these gaps is a design choice, or more precisely: a design omission. And design omissions can be corrected.
ONE TAKEAWAY
The next time you hear someone say “we didn’t see it coming” about a toxic leader, ask one question: What would your organization have had to measure, report, and reward differently in order to have seen it?
If the answer requires fundamental changes to your incentive structure, complaint architecture, governance framework or nepotism culture, then you didn’t miss a person. You have a system that was never designed to see them.
That is the work.
Markus
SOURCES
Babiak, P. & Hare, R. D. (2006). Snakes in Suits: When Psychopaths Go to Work. HarperCollins.
Fehn, T. & Schütz, A. (2020). What You Get is What You See: Other-Rated but not Self-Rated Leaders’ Narcissistic Rivalry Affects Followers Negatively. Journal of Business Ethics. DOI: 10.1007/s10551-020-04604-3
Pelletier, K. L., Kottke, J. & Sirotnik, B. (2019). The toxic triangle in academia: A case analysis of the emergence and manifestation of toxicity in a public university. Leadership. DOI: 10.1177/1742715018773828