The Most Expensive Leadership Decision Is Usually the One You Don't Make

Every institution has financial obligations. Most leaders think about operating budgets, capital projects, deferred maintenance and the many competing priorities that demand limited resources.

But there's another kind of financial obligation, a debt that rarely appears on a balance sheet, and in my experience, it can be even more costly.

I call it leadership debt.

Leadership debt accumulates every time an organization delays investing in its people. It builds when difficult conversations are postponed, leadership development gets pushed to "next year," key positions remain vacant for months, or promising employees are promoted without guidance and coaching to help them succeed. None of those decisions feels catastrophic in the moment. In fact, many seem reasonable given competing priorities and limited resources.

The problem is that leadership debt compounds. Just like financial debt, the longer it goes unpaid, the more expensive it becomes.

I've seen organizations spend years trying to recover from decisions that felt insignificant at the time. A delayed hire becomes a burned-out team. An unprepared manager creates turnover that ripples through an entire department. A culture issue left unchecked slowly erodes trust, collaboration and confidence. By the time leadership recognizes the true cost, they're no longer solving one problem—they're untangling several years' worth of accumulated interest.

Leadership debt doesn't usually announce itself with a crisis. It shows up quietly through symptoms that are easy to dismiss on their own but difficult to ignore together. Employee engagement begins to slip. High performers start exploring other opportunities. Donor relationships lose momentum because key leaders are stretched too thin. Collaboration becomes harder. Decision-making slows. Instead of focusing on strategic priorities, leadership teams spend time reacting to issues that could have been prevented months—or even years—earlier.

The cost of leadership debt has never been higher. Gallup's 2026 Employee Retention and Attraction Indicator shows that 52% of U.S. employees are watching for or actively seeking a new job. Organizations that wait to invest in their leaders, culture and people aren't just risking turnover—they're competing for talent from a weaker position than they realize.

One of the most common examples of leadership debt I've seen throughout my career is a leader who tolerates behavior that undermines the team because the individual exhibiting the behavior is considered "too valuable" to confront and/or to hold accountable for their actions. On paper, it can feel like the practical decision. In reality, the cost is almost always greater than a leader anticipates. 

When values are compromised for “great” performance (e.g., funds raised, events accomplished, reports provided, or investment returns) trust begins to erode, accountability becomes inconsistent and the rest of the team notices. Strong leaders understand that upholding the organization's values is as important as experience, talent and skill. Each employee must exhibit those values while delivering the results expected in their role. That is the only environment where the entire team succeeds.  The difficult conversation may be uncomfortable today, but avoiding it often creates a much larger organizational challenge tomorrow.

Another example of avoiding leadership debt is intentional succession planning. Organizations that weather leadership transitions effectively are rarely the ones with the biggest budgets. They're the ones that invest in developing future leaders long before a transition becomes necessary.

Not long ago, I spoke with the CEO of a foundation who shared that she has two—and possibly three—people within her organization who could successfully step into her role when she eventually retires. That level of succession readiness is remarkably uncommon. More often, we meet leaders who have served their organizations well for many years but haven't taken the time to intentionally prepare the next generation of leadership. Those who make succession planning an ongoing discipline, rather than a last-minute exercise, create stability, confidence and continuity long before a transition ever occurs.

Organizations that avoid leadership debt don't wait for problems to surface before they act. They address difficult conversations early, establish clear expectations, invest in coaching, develop leaders and reinforce the behaviors they want to see continually and consistently. Those investments may not generate immediate results, but over time they build stronger teams, healthier cultures and organizations that are better equipped to navigate change. Like succession planning, investing in culture before there’s a crisis is far less costly than trying to repair it after trust has eroded or performance has declined or other forces beyond one’s control cause a disruption.

The bottom line is that proactive investment is always less expensive than reactive recovery.

Leaders can invest intentionally by developing people, strengthening culture and preparing future leaders before they're needed. Or they can be forced to invest later by responding to turnover, burnout, stalled initiatives, weakened relationships and lost institutional momentum.

Organizations that invest early don't simply avoid problems; they build stronger teams, create healthier cultures and position themselves to thrive through whatever comes next. That's a return on investment every institution can afford to pursue.

Gallup. Employee Retention and Attraction Indicator. 2026.