When Results Fall Short: How Leaders Navigate Underperformance

Across more than four decades in international energy, working in more than 40 countries and including his time as COO and Board member of BG Group, Martin Houston has led and advised through some of the industry’s toughest cycles. Now, as a mentor to senior executives, he turns to a challenge every leader eventually faces: what to do when results fall short.

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Every leader will, at some point, face a period when results fall short of what was planned, promised or expected. What matters in that moment is not simply how the business responds operationally, but how the leader responds personally and publicly.

In my experience, underperformance is not a character verdict. It is a business condition. It requires diagnosis, honesty and deliberate action. The leaders who navigate it well are not those who avoid the discomfort, but those who face it directly, communicate clearly and bring their organisations together around a credible path forward.

Why underperformance is harder than it appears

When results disappoint, the emotional weight can distort judgement. Disappointment, embarrassment and self-doubt are natural responses to a shortfall. Left unmanaged, they can lead to over-correction – dramatic restructuring that destroys value – or under-reaction, where leaders minimise the problem to protect themselves from discomfort.

Neither serves the organisation.

There is also pressure from multiple stakeholders. Boards, investors, customers and employees will all have questions, while the leadership team still has to run the business. In these circumstances, the temptation to say different things to different audiences is understandable. But consistency matters. Managing the narrative is not the same as managing the problem.

The causes of underperformance are rarely straightforward either. External conditions, strategic decisions, execution failures and organisational constraints can all play a part. It can be tempting to reduce the problem to a single cause, but doing so often leads to superficial solutions.

And there is another dimension that leaders can underestimate: culture.

When results disappoint, people watch how their leaders behave. Do they take accountability or assign blame? Do they communicate honestly or focus on managing perceptions? Do they protect the people who raised concerns early?

Those signals can have a much longer life than the period of underperformance itself.

Diagnose before you act

One of the most important disciplines is to resist the urge to announce solutions before understanding the problem.

I have seen how easy it is, under pressure, to move too quickly. But premature action can signal panic rather than leadership. The first task is to separate external conditions from internal execution failures, because the response to each will be different.

It is equally important to involve the people closest to the business. They often have the clearest view of what went wrong and, importantly, are more likely to be committed to solutions they have helped shape.

For senior leaders, this is also where having an independent perspective can be particularly valuable. When you are close to the problem, it can be difficult to step outside the immediate pressure and test your assumptions.

This is one reason I believe mentoring can be so valuable for senior leaders. A good mentor provides a confidential space to think aloud, challenge your own assumptions and draw on experience from situations that may have some useful parallels. They are not inside the organisation and do not have a vested interest in the outcome, which can make the conversation especially useful when the stakes are high.

Communicate with precision and consistency

Acknowledging a shortfall directly and early is critical. Delayed disclosure can erode trust faster than the underperformance itself.

That does not mean pretending to have all the answers. Leaders should be specific about what they know, what they are still investigating and what they intend to do. Vague reassurance is rarely helpful; uncomfortable honesty is often more credible.

The same principle applies across stakeholder groups. The board, investors, leadership team and wider organisation may need different levels of detail, but the underlying message should be consistent.

Take accountability without taking all the blame

There is an important distinction between accountability and blame.

As leaders, we should own the outcome while remaining accurate about the factors that contributed to it. Scapegoating may relieve short-term pressure, but it can destroy the psychological safety that high-performing organisations depend on.

This extends to people who raise concerns early. If those who deliver unwelcome news are punished or ignored, people quickly learn to keep quiet. That makes the next problem harder to identify, not easier.

Build a credible path forward

Once the diagnosis is clear, the focus has to shift towards recovery.

That means defining what good looks like over the next twelve months in a way that can actually be measured. It means sequencing actions — demonstrating visible progress while the deeper structural work continues. And it means revisiting commitments once recovery is established, so that people see that leadership’s word is durable rather than simply a response to the immediate situation.

Ultimately, the aim is to move from:

“We missed our targets, but we are not entirely sure why.”

to:

“We know precisely what drove the shortfall, we have taken clear accountability, and here is exactly what we are doing about it.”

Every leader will face a moment when results disappoint. The question is how we use that moment.

Handled well, underperformance can be an opportunity to build stronger relationships, a more rigorous culture and a clearer understanding of what the organisation can actually deliver.

For me, this is also where the value of an experienced mentor becomes clear. Leadership can be isolating, especially when the pressure is greatest. Having someone independent with whom to test your thinking, challenge your assumptions and draw on relevant experience can help create the perspective needed to navigate difficult moments well.

Underperformance, handled well, can be the making of a leader. Handled poorly, it can compound into something much more difficult to recover from.