Why Many Leaders Fail – and how personality assessment, accelerator programs, and purposedriven leadership can create success in search funds.

Overview

1. Why Leaders Fail: Key Insights from Recent Research
2. Human Content Personality and Capacity Assessments for Leadership Selection
3. Accelerator Programs: Training and Developing Leaders for Success
4. A Holistic Approach: Combining Personality assessment, Accelerator Programs,
   and Purpose-Driven Leadership
5. Applying the Insights: Leading with Purpose and Adaptability
6. Conclusion: Creating Purpose-Driven Leaders in Search Funds

Executive Summary

Leadership failure remains widespread, with studies showing that up to 70% of leaders struggle in their roles, often due to not matching well to the role requirements and/or with unclear expectations for the role. In many cases this is further compounded with poor self-awareness, overconfidence, cultural misalignment, and lack of resilience. For search funds, effective leadership is critical to acquisition success and long-term growth. Human Content’s assessment tools and methods integrated with accelerator programs such as TEMBO SEARCH PARTNERS offer a strategic solution to these challenges.

Human Content’s job and organisation analysis, along with their tools to assess the fundamental driving forces of candidates, allows us to evaluate how well the leader’s strengths match the demands of the role. While accelerator programs use this as guidelines to focus resources and build essential skills and resilience through targeted training and mentorship, it also brings clarity on what aspects are most important for the leader to focus on to succeed. Accelerator-based search funds have gained traction as a model that could outperform traditional search funds. Data from the 2024 Stanford GSB study shows that search funds achieve impressive returns, with an internal rate of return (IRR) of 35.1% and a return on investment (ROI) of 4.5x. Although specific studies comparing traditional and accelerator-supported search funds directly are limited, research and case observations indicate several advantages that accelerators provide in the search fund ecosystem.

Additionally, purpose-driven leadership principles, inspired by Simon Sinek’s “Start with Why,” help leaders align their actions with a meaningful vision, inspiring trust and engagement within their teams. This integrated approach helps search fund leaders achieve sustainable success, by driving impactful and resilient organisations. Multiple studies, including those from Gallup1), Gartner2) and DDI3), reveal that 60-70% of executives fail to perform effectively in their roles. Such findings underscore the need for a closer look at leadership selection, preparation, and development, particularly in high-stake environments like search funds, where the success of acquired companies rests heavily on the leader and the executive teams they build. By combining Human Content’s personality and ability assessment, structured accelerator programs, and a focus on purpose-driven leadership, search funds can address the root causes of leadership failure and select and prepare leaders who inspire and drive sustainable success.

Why Leaders Fail: Key Insights from Recent Research

Understanding why leaders struggle in their roles is essential to preventing leadership failure. Research highlights several contributing factors:

1. Unclear or missing expectations for the leadership role
   Most organisations use abstract, general statements to define “success” and what they are looking for in a leader. This effectively turns the selection of a leader into a lottery, we have no clear idea what the optimal leader for the organisation looks like. A 2023 DDI study found that only 15% of leaders feel well-prepared for their roles, while the majority face ambiguous expectations that contribute to a 50% failure rate within 18 months. This lack of clarity means leaders struggle to translate general goals into actionable strategies, limiting their effectiveness from the outset. One of the toughest challenges for the leader is to translate this ambiguity into actionable expectations for themselves, and to address their watchouts. The poorer the match is, the worse the leader is likely to fare in each of the points mentioned below.
2. Limited self-awareness and emotional insight
   Research shows that 95% of people believe they are self-aware, yet only 10-15% truly are (Eurich, 2018). Leaders with low self-awareness are more prone to misjudge their strengths and weaknesses, often leading to ineffective decision-making and strained relationships with their teams. A lack of true self-awareness affects not only personal growth but also team morale, as leaders who cannot recognize their own blind spots may struggle to create an open, collaborative environment.
3. Overconfidence and risky decision-making
   Overconfidence, sometimes referred to as “hubris syndrome,” leads to impulsive, highstake decisions that may not align with the organization’s long-term goals. Studies reveal that overconfident leaders are 50% more likely to pursue acquisitions and make decisions that ultimately underperform, because they tend to underestimate complexity or disregard long-term goals. For search funds, where financial stakes are high and strategic judgment is crucial, misaligned risk-taking can compromise the company’s stability and growth.
4. Cultural misalignment
   Cultural fit significantly influences leadership success. Leaders who resonate with the organisation’s values, communication styles, and team dynamics are more likely to engage their teams and build trust. DDI’s Global Leadership Forecast found that only 40% of leaders are deemed high quality, often due to a poor fit with company values and communication styles. Cultural misalignment disrupts team cohesion and engagement, both critical for sustaining momentum post-acquisition.
5. Stress and inability to adapt
   Leadership is inherently demanding, and leaders who lack resilience or adaptability are more vulnerable to burnout. According to recent studies, nearly three-quarters of leaders feel “used up” by the end of the day, highlighting the importance of adaptability and stress management for sustainable leadership. For search fund leaders, adaptability is especially crucial, as they must navigate change and uncertainty in acquisition environments.

Human Content Personality Assessments for Leadership Selection

To identify leaders who align well with the demands of searcher roles within the search fund concept, Human Content’s holistic approach provide insights into strengths, and watchouts of potential leaders, helping to match the right person to the right role.

1. Job and organization analysis
   Human Content’s approach begins with an in-depth job and organization analysis, which identifies what success looks like in the role. By assessing what the leader/en trepreneur will need to do, core responsibilities, expected outcomes, and required interactions with people, this method provides a precise understanding of what is needed from someone to be a successful leader in the role.
2. Personality and Ability Assessments
   Unlike traditional models, Human Content’s assessments go beyond basic personality traits to evaluate a leader’s core driving forces and cognitive capabilities. This approach identifies which internal motivators, or “driving forces,” enhance or detract from a leader’s potential for success in the role. By understanding how a leader’s strengths and motivations align with the job’s requirements, search funds can identify candidates who are naturally inclined to thrive and excel.
3. Behavioral Fit and Role Compatibility
   Human Content’s assessments evaluate how candidates are likely to behave in critical job situations, allowing organizations to predict areas where they will excel independently versus those where they may require more support. By understanding these dynamics, search fund investors can place leaders in roles where they are both effective and motivated to contribute, while ensuring that people in their top team complement the leader’s watchouts, reducing the risks of cultural misalignment and burnout

Accelerator Programs: Training and Developing Leaders for Success

While personality and ability assessments are crucial for selecting the right candidates, accelerator programs offer the structured development necessary to build the practical skills and resilience required for search fund leadership. Moreover, in Germany, business owners tend to be more skeptical towards individual, young MBA graduates wanting to take over their business and prefer experienced “operators” as their external successor.

The accelerator adds another element of trust and organisational backing to the searcher ensuring professionalism and deal certainty towards the seller. Evidence also suggests that accelerator-backed search funds tend to complete acquisitions faster and with higher success rates due to the backing of experienced investors and structured training. The 2022 IESE International Search Fund report highlighted that international search funds associated with accelerators or strong investor networks showed higher acquisition success rates compared to solo searchers, with over 65% successfully closing deals, compared to 55% among traditional, independent searchers.

1. Comprehensive skill development
   Accelerator programs for search funds provide targeted training in core areas like finance, strategy, and operational management. Searchers benefit from learning these skills in the context of acquisition and post-acquisition growth, ensuring they are wellprepared to address the unique challenges they’ll face when taking over the business and lead the company. However, skills alone are not enough — connecting these skills to a leader’s “why” helps ensure that their actions align with both personal values and organizational goals.
2. Mentorship and networking
   Mentorship plays a central role in leadership development, offering guidance through the complexities of acquisition and management. Research consistently shows that leaders who have mentors are 60% more likely to succeed, as mentorship provides both practical advice and emotional support. Accelerator programs often connect participants with experienced mentors, investors and industry experts, who encourage purposedriven decision-making, helping leaders to align their actions with a meaningful, longterm vision.
3. Simulated decision-making and stress management
   Accelerator programs often incorporate simulations and case studies that allow leaders to practice decision-making in a controlled environment. This hands-on experience builds critical thinking and resilience, skills that are essential for handling real-world challenges. By engaging in these simulations, leaders learn to approach problems strategically, rather than reactively, a mindset that fosters stability and adaptability.
4. Self-reflection and cultural alignment
   Accelerator programs also emphasize self-reflection, encouraging leaders to assess their values, goals, and personal drivers. This exercise supports a purpose-driven approach to leadership, helping leaders to understand how their actions align with both their role and the organization’s mission. Leaders who understand their purpose are more likely to inspire trust and commitment within their teams, cultivating a culture that is resilient, engaged and, also, one that is fully aligned with core organizational goals.

The acceleration model often provides a more tailored and risk-managed approach for aspiring search fund leaders, particularly in complex markets like Europe and North America. With specialized support in critical areas—such as finance, operations, and leadership development—accelerated search funds not only mitigate common risks of failure but also offer enhanced mentorship and networking, contributing to faster growth and higher potential returns for investors.

A Holistic Approach: Combining Individual Assessments, Accelerator Programs, and Purpose-Driven Leadership

The integration of Human Content’s personality and ability assessments, accelerator programs, and a focus on purpose-driven leadership provides a holistic approach to developing effective search fund leaders:

• Informed selection: Human Content’s assessments help identify candidates with the right personality traits and motivations and the necessary cognitive ability, ensuring they are naturally suited to the role and the demands of complexity within it
• Targeted skill development: Accelerator programs build the essential skills leaders need for success, preparing them to manage the multifaceted demands of search fund roles effectively.
• Alignment with purpose: Self-reflection and mentorship foster purpose-driven leadership, helping leaders to align their actions with both personal andorganizational values, inspiring trust and engagement within their teams.

Applying the Insights: Leading with Purpose and Adaptability
Once equipped with insights from these individual assessments and skills from accelerator programs, leaders can apply these lessons in their roles:

1. Intentional decision-making
   Self-awareness from individual assessments enables leaders to make deliberate, purpose-driven decisions. Leaders with an understanding of their strengths and growth areas can approach challenges with intention, balancing ambition with humility. Thisthoughtful approach reinforces the importance of values-aligned decisions, which resonate with teams and stakeholders alike.
2. Connecting skills to purpose
   Skills development is most effective when tied to a leader’s purpose. Leaders who connect their actions to a broader “why” inspire their teams and build cultures that are committed to a shared vision. Purpose-driven leadership encourages a culture of trust, innovation, and resilience, which are essential for the long-term success of any organization.
3. Building a culture of trust and vision
   Leaders who emphasize cultural fit and mentorship from the beginning foster an environment where employees feel valued and engaged. This approach strengthens trust within the organization, promotes continuous growth, and creates a foundation for sustainable success. In search funds, where rapid organizational change is common, leaders who focus on trust and alignment with a shared vision can effectively guide their teams through transitions.

Conclusion: Creating Purpose-Driven Leaders in Search Funds
Building effective leaders in entrepreneurship through acquisition models, especially in search funds, requires more than technical skills; it demands a commitment to purpose, self-awareness, and continuous development. By leveraging Human Content’s job and organization analysis and individual assessments, accelerator programs, and purposedriven leadership principles, search fund investors and founders can cultivate leaders who are well-prepared to navigate the challenges of acquisition and growth.

This approach ensures leaders are equipped with the insights, skills, and vision necessary to create long term success in search funds. By aligning actions with both organizational goals and personal purpose,search fund leaders can inspire trust, foster resilience, and drive sustainable growth in the businesses they lead. In conclusion, while direct scientific comparisons remain scarce, industry data and anecdotal evidence support the notion that accelerated search funds provide a more robust framework for search fund entrepreneurs. They combine targeted training, capital access, and hands-on mentorship, which help reduce acquisition timelines, improve acquisition success rates, and foster higher ROI, making them an increasingly appealing option in the search fund landscape.