What causes some managers to be effective and others to derail even though the looked like they have lots of potential?

Researchers at the Centre of Creative learning identified traits associated with success or failure of top executives (McCall & Lombardo, 1983; Lombardo & McCauley, 1988; Van Velsor & Leslie 1995).  Relevant traits/skills includes emotional stability, defensiveness, integrity, interpersonal, technical and cognitive skills

Emotional stability

Managers who derailed were less predictable and less able to handle pressure during a crises. They also undermined their interpersonal relationships by being moody and not controlling their tempers well enough.

Defensiveness

Derailed managers were more likely to cover up mistakes and blame others.  Successful managers admitted mistakes, accepted responsibility and took action to fix it.  They did not dwell on it, but they learned and adapted.

Integrity

Derailed managers advanced their careers at the expense of others.  They were more likely to betray others or break promises.  Successful managers were more focussed on the immediate task and the needs of subordinates than to compete with rivals or impress superiors.

Interpersonal skills

Derailed managers were selfish, manipulative and  intimidating towards others.  Lower level managers could still compensate with charm, great technical knowledge and skill, but in higher levels of management this no longer worked.  Successful managers are sincere and tactful and are capable of building networks and relationships with all types of people.  Successful managers were also direct but diplomatic as oppose to derailed managers who were outspoken and offensive.

Technical and cognitive skills

For many derailed managers, their technical brilliance were a source of success in lower levels of management, but they were unable to shift their focus from technical problems to the broader and more strategic perspective needed for higher levels of management.  These brilliant technical managers were overconfident, arrogant and rejected sound technical advice or micromanaged subordinates with more technical expertise.

References

Gary Yukl, Leadership in organisations.  Sixth Edition, Pearson Prentice Hall, 2005, Chapter 7