Leadership Readiness: How to Spot the Red Flags Before They Cost You

If you caught our recent webinar or podcast episode, The Cost of Bad Leadership, you’ve already seen the numbers. Research from Army University Press and Gallup shows that poor leadership can cost organizations between $80,000 and $300,000 per year—per manager. The losses come from reduced productivity, disengagement, turnover, and missed opportunities.

But here’s the truth: most of these costs are preventable.

That’s why leadership readiness matters. By identifying who is actually prepared to lead—not just who performed well in a previous role—you can avoid costly missteps and build a healthier, more future-ready culture.

This article outlines how to evaluate leadership readiness, spot red flags early, and use proven systems to build a stronger bench of capable, trusted leaders.

What Is Leadership Readiness—and Why Does It Matter?

Leadership readiness isn’t about tenure, popularity, or who’s next in line. It’s a structured process for identifying whether someone has the skills, behaviors, and mindset to lead effectively in your organization.

To get started, you need three foundational pieces in place:

1. A clear, behavior-based definition of what effective leadership looks like in your organization (a leadership competency model).
2. Organizational buy-in, especially from current leaders, in defining and owning these standards.
3. An evaluation process that looks beyond résumés and gut instinct to assess true readiness.

Step One: Define What Great Leadership Looks Like

You can’t assess readiness if you haven’t defined what you’re measuring. That’s where a leadership competency model comes in.

This model outlines the observable behaviors and skills you expect your leaders to demonstrate. Common leadership competencies include:

• Strategic thinking
• Emotional intelligence
• Communication and influence
• Accountability and follow-through
• Team development and collaboration
• Leading change
• Integrity and sound judgment

Instead of vague traits like “good communicator,” a well-formed competency sounds like:

“Tailors communication style to the audience and delivers detailed messages with clarity and confidence.”

When you involve leaders in defining these standards, they’re more likely to embrace and uphold them.

Step Two: Assess Leadership Readiness—With the Right Tools

With your competency model in place, you can select tools to evaluate individuals against it. A combination of methods works best to create a full picture.

Tool	What It Measures	How It Aligns
360-Degree Feedback	Leadership behaviors in practice	Questions built directly from competencies
Simulations	Judgment, adaptability, communication	Real-world scenarios map to competencies
Psychometric Assessments	Personality traits, cognitive style	Tests selected for alignment
Structured Interviews	Situational thinking and leadership approach	Tied to observable behaviors
Situational Judgment Tests	Prioritization, leadership instincts	Job-relevant decision-making

Pro Tip: Use a mix of methods to reduce bias and gain balanced insights.

Step Three: Add a Red Flags Assessment

Leadership readiness is about more than just potential—it’s also about risk.

While competency models define what good leadership looks like, a Leader Red Flags Assessment helps you identify the behaviors you can’t afford to overlook. These patterns often predict disengagement, dysfunction, or culture erosion.

Red Flags Assessment: How It Works

Rate observable behaviors from 0 (Never) to 5 (Often) in three critical areas:

1. Goal Setting & Communication

• Fails to set or communicate clear goals
• Changes priorities frequently without explanation
• Only reacts when things go wrong
• Avoids proactive planning
• Doesn’t invite questions or feedback

2. Performance Tracking & Feedback

• Ignores data or metrics
• Makes decisions based on gut
• Fails to address poor performance
• Only engages team when issues arise
• Sets unrealistic deadlines for self-gain
• Shifts blame to others

3. Workplace Culture (High-Risk Behaviors)

• Plays favorites
• Doesn’t follow the same rules they enforce
• Shuts down expert input
• Avoids tough conversations or conflict
• Uses dismissive language (“That’s just the way it is”)
• Interrupts or ignores team feedback

Scoring Guidelines

Total Score	Flag	Action
0–5	Green Flag	Minimal concern
6–16	Yellow Flag	Watch closely and coach
17–26	Orange Flag	Intervention strongly advised
27+	Red Flag	High risk—immediate action needed

Note: Any score of 5 in the Culture section should trigger concern—even with a low total score. Why? Because bad leadership damages culture, and culture drives everything else.

Your Leadership Readiness Roadmap

To build a repeatable, scalable process:

1. Define your competency model
2. Select aligned assessment tools
3. Train participants and assessors
4. Conduct evaluations with consistency
5. Analyze results and share feedback
6. Create personalized development plans

This system doesn’t just identify who’s ready—it also reveals how to get others ready.

Common Pitfalls to Avoid

• Promoting based on performance in a previous (non-leadership) role
• Basing promotions on tenure or gut feel
• Ignoring red flags
• Using generic leadership models not tailored to your organization
• Skipping development after assessment

Avoiding these mistakes means making smarter decisions and retaining high-potential talent who see a clear future in your organization.

The Payoff: A Stronger Pipeline, Smarter Promotions, Better Culture

When you take a structured, strategic approach to leadership readiness:

• Succession planning becomes proactive, not reactive
• Development becomes targeted and effective
• Promotions are trusted and transparent
• Leadership reflects your values, not just your org chart
• High performers stay because they feel seen and supported

Final Thought: Don’t Guess—Assess

Leadership missteps are expensive. But they’re not inevitable.

When you stop guessing and start using clear models, practical assessments, and red flag indicators, you make better decisions—and build a leadership culture worth following.

Because while bad leadership costs you, great leadership is priceless.