Betting on the Wrong Horse

"Ego makes it so hard—it's easier to delay, to double down, to deliberately avoid seeing the changes we need to make in our lives." — Ryan Holiday, Ego Is The Enemy

Early in my career, a corporate counsel shared advice I still carry: "One bad employee spreads like cancer through a tree. You can't just ignore it. You have to cut away all the infected bark, or the whole tree dies. You have to remove it from the bark so the tree survives and grows."

Yet executives often behave like gambling addicts, betting on the same losing horse again and again. They refuse to cut ties with the person who erodes company culture and drives losses. The question is: What keeps leaders from making the hard call?

Some of the reasons sound operational: the void they create in the organization, the difficulty in finding replacement talent, their innovative ideas, and their critical relationships. But the real reasons run deeper.

Firing a senior hire can feel like admitting, “I misjudged this person,” which can undermine a leader’s confidence in their own judgment. After years invested in coaching the toxic executive, the equity granted to them, and the political capital spent defending them, it often feels easier to keep betting on them than to acknowledge the mistake.

Other executives rationalize that it's "better to have the devil you know." After working through multiple setbacks, they believe they finally "have a grasp" of this person, that "this time it'll be different" because they now "know how they operate." It’s very close to the classic definition of insanity: repeating the same actions while expecting a different result.

For some leaders, the need to be right and stay at the center of attention creates an ecosystem that sustains them. Toxic executives who flatter and protect their boss's ego receive disproportionate protection, even as they drive out talent and damage the enterprise.

Leaders' hires inevitably reflect their own standards and behavior. When they keep low-performing or toxic executives, they send a powerful message across the organization: these are the standards that truly matter. This message overrides the official ethos in employee manuals and training materials—the values leaders are expected to communicate.

When ego drives decisions at the C-suite level, it establishes a new, unspoken set of values. People throughout the company see that there are values written on paper, and then there are the real values, where certain executives remain protected regardless of performance.