Startups don’t fail because of technology or funding - they fail because of people

In this series, we share practical insights, strategic tools, and field-tested practices from over 20 years in HR leadership.Our goal: to help founders, executives, and VCs master the human side of growth – from early hires to leadership culture.

New Article: Why Startups Can’t Afford to Neglect Leadership Development

Introduction Founders and young executives often postpone investing in leadership development, assuming it’s something to deal with “later.” Yet across industries, organizations that neglect leadership are finding themselves at risk: weak decision-making, cultural drift, and difficulty retaining top talent. For startups, where every decision carries disproportionate weight, overlooking leadership development can quickly become a barrier to growth.

Leadership Development - Not a Luxury, but a Growth DriverRecent research by The Josh Bersin Company in partnership with BetterUp (2023), based on more than 1,000 organizations worldwide, found that among all HR investments, leadership development is the strongest predictor of business growth. Companies that focus on developing leaders - not just promoting them - significantly outperform their peers. Despite this, only 25% of organizations believe their leadership programs provide high business value, and just 24% report having an up-to-date and relevant leadership model.

Leadership Is No Longer Just at the TopIn today’s workplace, leadership is not limited to the C-suite. A project manager, a team lead, or even an early-career product manager must all be able to influence, guide, and build culture. Bersin highlights Marriott’s approach, where “making every employee a leader” has become central to growth. For startups, where teams are lean and agile, every employee can act as a force multiplier - provided they are equipped with the right tools and mindset.

The Troubling DataThe study also reveals a steep decline in investment:

• Only 11% of companies provide mentoring for leaders.

• Just 18% offer coaching for managers.

• Over 60% of organizations spend less than $500 annually per leader on leadership development-less than many spend on coffee (Josh Bersin & BetterUp, 2023).
  

For startups, neglecting leadership can result in rapid manager burnout, loss of cultural alignment, and high attrition among ambitious employees who expect mentoring and growth opportunities.

Leadership as a Talent MagnetYoung professionals - especially Gen Z- are actively seeking employers who provide mentorship, coaching, and growth pathways. According to the Deloitte Gen Z and Millennial Survey 2025, nearly 60% of Gen Z employees select employers based on opportunities for learning and personal development. For startups competing for scarce talent, a strong leadership development culture is not just a management practice - it’s a competitive advantage.

Three Principles for Startups to Build Strong Leadership from Day One

• Define your leadership model clearly - Are you innovation-driven, customer-focused, or growth-oriented? Clarity shapes culture and decision-making.

• Invest at all levels - Extend leadership development beyond senior executives to project managers and emerging leaders.

• Create mentoring and coaching opportunities - Even simple peer-to-peer or founder-to-manager programs can accelerate growth and resilience.

• 
  

Conclusion In startups, where every leadership decision can alter the company’s trajectory, neglecting leadership development is a costly mistake. Early investment in leadership infrastructure-even on a modest scale-is a direct investment in growth, culture, and long-term talent retention.

We help startups build the human side of success.Curious how it could support your Business?

Let’s talk.

ליצירת קשר