9 Leadership Mistakes Business Owners Make (and How to Fix Them)

Leadership mistakes often affect your team long before they affect your numbers. Decisions drag on for weeks, good people refuse to speak up, turnover creeps up, or there’s a growing sense that something isn’t right, but no one can put their finger on why.

Those problems look different from one business to the next, but they trace back to the same nine mistakes.

If a few of these mistakes hit close to home, you’re in good company. Ramsey Solutions founder and CEO Dave Ramsey says his company grew into a $300 million business one mistake at a time. Along the way, he learned the traits of a great leader and discovered that leadership is a skill you can develop. And one of the best ways to learn is from someone else’s mistakes. So let’s look at all nine of the common leadership mistakes business owners make as they grow and how to fix each one.

1. Being Paralyzed by Fear

Fear that paralyzes you stalls decisions, and your team pays the price.

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A little fear is healthy because it makes you stop and think before you make a big decision. But when fear keeps you from making the call at all, your whole team gets stuck right there with you.

Sure, there are plenty of things in business worth worrying about, like missing payroll or making a bad hire. The problem is letting that fear make your decisions for you. We call this squirrel theology. You’ve seen a squirrel run into the road, dart one way, then the other, then back again until you hear bump, bump. That’s what happens when you let fear get the best of you.

The Solution:

First, acknowledge that you’re afraid and that your concerns may be well-founded. Most leaders have made decisions that cost them money, customers or team members. But you can’t let the possibility of getting it wrong stop you from making a decision. Doing nothing has a cost too. In fact, indecision can lead to missed opportunities and problems that keep just growing. So say out loud that the decision scares you, then make it anyway.

Set a deadline, gather the facts, and work through the worst-case scenario. Your team needs you to lead, so take the next step that seems right. And keep building your decision-making skills so you have a proven process to lean on when the stakes are high.

2. Hiring the Wrong People

One of the biggest mistakes you can make as a business owner is hiring too quickly just because you need someone. That quick fix creates bigger problems down the road, and you’ll probably find yourself repeating the hiring process a few months later when you have to let that person go.

The Solution:

Take time to find someone who’s truly a good fit for the job. Hiring the right person is way more important than hiring any person. Look for someone with integrity who believes in your company’s mission and has the skills that are needed to do the job well. Sometimes it takes a while to find that someone. We get it. To keep you on track, use the 12 Components to a Good Hire as your checklist.

At Ramsey Solutions, candidates are run through the gauntlet before they’re ever hired. The process includes multiple interviews, a personality assessment and even a meal with the candidate and their spouse. All that work up front builds a team of thoroughbreds and keeps the crazy out. And it’s a whole lot less painful than hiring, training and firing three donkeys before you luck into an actual thoroughbred.

3. Being a Control Freak

No one cares about your business as much as you do. But if the place can’t run without you, you’re the bottleneck. If you want to grow, you have to delegate.

Remember those people you put through the rigorous interview process? Trust that they have the skills and judgment to do a great job. Otherwise, why did you hire them? When you hover over every decision and second-guess every move, your team gets fearful and stressed. That’s when good people start looking for the door.

The Solution:

If you’ve hired the right people, step back and let them succeed. Of course, new team members need training, guidance and time to prove their competency and integrity. But once they’ve earned your trust, lengthen the rope. And don’t micromanage them or they’ll never reach their full potential. It’s time to make the mindset shift from boss to leader.

4. Being Disconnected From Your Team

If you’re disconnected, you don’t know what’s happening with your team, and they have no idea what you’re thinking. You can’t build trust that way.

On the opposite end from control freaks are leaders who fly in, create chaos, and fly away. The only time their team hears from them is when they’re giving orders or pointing out what’s wrong. That’s a problem because transparency builds trust. To build real connection, your team members need to know you, and you need to know them.

The Solution:

Hold regular one-on-ones with your direct reports to talk about how their work is going and how they’re doing personally. Give them room to bring up concerns, questions, challenges and wins. Then listen. Really listen.

Between one-on-ones, use weekly reports to keep a finger on the pulse of your team’s morale, stress levels, workload, highs and lows. And don’t keep your team guessing about what’s happening from your vantage point. You’re the chief reminding officer, so effectively communicate about why you’re making certain decisions and what matters most to your company’s mission and vision.

The opposite of this is what we call mushroom communication: keeping people in the dark and feeding them manure. That’s one of the five enemies of unity, and it destroys trust.

5. Lacking Self-Awareness

When you lack self-awareness, you can’t see the problems you’re causing, even when everyone around you can. You may not even realize you’re disconnected from your team or notice that your decisions are hurting the company, your customers are unhappy, or your team members are walking on eggshells. And it takes humility to admit any of it.

The Solution:

Ask for honest feedback and build a personal growth plan. You’re both the problem and the solution.

Start by identifying your blind spots. Send a 360-degree feedback survey to your peers and a few team members to find what you might not see on your own. Then build the habits of successful leaders into your growth plan. Don’t assume you know everything just because the business is growing. There’s always another skill to develop, book to read, person to learn from, or problem to solve.

6. Neglecting to Cast Vision

If your team doesn’t know where the company is headed, why it matters, and what winning looks like, morale will go out the window quickly. Nobody wants to feel like they’ll be doing the same thing every day for the rest of their working life. They want to be part of something bigger than themselves. As Proverbs 29:18 (KJV) reminds us, “Where there is no vision, the people perish.” A lack of shared purpose is also one of the enemies of unity.

The Solution:

Your team won’t pick up your vision by osmosis. You have to cast vision. Take some time to think seriously about the future of the team you’re leading. What do you want to be true in the next three to five years? Once you cast that vision, make a plan for what you’ll focus on in the next year to get you closer.

Also, make sure you’ve created a mission statement for your team or company and that every team member knows what it is. Help them see where the company is going, how you plan to grow the team, and what opportunities they’ll have to grow down the road. Give your team members something meaningful to believe in and work toward.

7. Avoiding Conflict

Avoiding conflict just to keep everyone happy is people-pleasing, and it lets small problems grow until your culture becomes toxic. Yes, most of us hate conflict. It’s not comfortable to be at odds with your team or feel like the bad guy. But when you shut down all forms of conflict, including healthy disagreements, the problems don’t disappear. They go underground. Gossip and unresolved disagreements are two more enemies of unity, and both thrive when leaders won’t deal with conflict.

The Solution:

Treat conflict like a splinter and pull it out right away, even if it hurts. Say the hard thing, but say it kindly.

Make room for healthy disagreements and let your team members push back and speak honestly without fear of retaliation. A great leader creates an environment where people can disagree respectfully but where gossip, name-calling and passive aggression have no place. At Ramsey Solutions, No Gossip is a company value and a fireable offense after one warning.

If a conflict has been bottling up for a while, it’s not going to just magically work itself out. Schedule time for you and your team to work through the discomfort together. You'll create more trust and build a stronger, healthier team.

8. Forgetting to Take Care of Yourself

You have to take care of yourself before you can take care of your team.. It’s like putting your oxygen mask on first before helping others. You may be a hard worker who believes sleep is for the weak, but if you let your mental, emotional, physical and spiritual health fall by the wayside, you’ll eventually run yourself into the ground.

The Solution:

Protect your health and your boundaries like the assets they are. Start with sleep. Seven to eight hours a night is the baseline, so quit treating it like a luxury. Add some exercise, even if it’s just a 30-minute walk a few days a week, and step away from your screen regularly throughout the day.

When it comes to boundaries, pick a shutdown time and stick to it. If that means taking email off your phone, do it. When you’re home, be home. Make room for the things that fill your tank too, like reflection, prayer and hobbies you enjoy. And when you’re feeling exhausted or burned out, don't try to power through it. It isn’t worth sacrificing your health for another hour of work.

9. Forgetting to Have Fun

Fun might seem pretty low on the list of priorities, but if everything is intense and high-pressure all the time, your team isn’t going to enjoy coming to work. That wears people down over time. Your people need opportunities to kick back and connect.

The Solution:

Find ways to celebrate and enjoy each other’s company. This could be as simple as a group lunch or as elaborate as an annual awards ceremony to recognize your team for their hard work. And don’t wait for a big occasion to shout people out. When you catch a team member doing something right, recognize it in front of the team. A little celebration and appreciation go a long way.

Which Leadership Mistakes Are You Making, and What Should You Fix First?

Use the table below to spot the mistake that’s probably affecting your team most. Then make the first fix this week.

Owning a mistake means saying it out loud, even when it’s embarrassing. Dave Ramsey once chewed out one of his leaders in front of three of her team members. The next morning, he woke up at 5 a.m. and realized he’d been a jerk. He called all four of them into his office and apologized to her in front of the same people who’d watched it happen.

That’s what owning a mistake looks like. You don’t make excuses or hope everyone forgets. You make it right.

Mistakes are part of being human, and they’re a huge part of leadership, but they don’t have to define you as a leader. When you get something wrong, fix what you can and keep growing. Start with one of these steps:

• Rate yourself on each of the nine mistakes. Circle the one that’s costing your business the most.
• Ask two people you trust on your team to name your biggest blind spot. Then say thank you no matter what you hear.
• Block 30 minutes this week to work on one fix. Maybe that’s a one-on-one, a hard conversation or brainstorming your vision.
• Read What Is Leadership? for a better understanding of the kind of leader you’re working to become.