My feeling (not verifiable fact, by any means) is that character may actually be more important in the development of a player than in a player who has already made the majors.
In other words, I see a lot of fairly talented players with low intelligence and/or poor work ethic who bust. And others with similar or even slightly less talent (per my scout) but with good character traits who exceed their perceived potential.
Now a top of the line prospect can probably get away with some character deficits. But unless you plan on losing year after year or your scouting team is just so much better than any other organization, you aren't going to be able to get by just developing the very best prospects. You need at least some 4th to 12th round draft picks to surprise and become decent role players if not starters (and maybe occasionally stars.) Of course, random talent change plays a factor too, but I don't think you can plan for that. You just ride that wave.
Oh, and I almost forgot to mention morale. (Or as many tend to spell it here- moral. I'm pretty sure that's a different issue though.
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A decent prospect unhappy or angry too long in your minor league system can wither on the vine. You can't please all the people all the time. But you want to, to the extent it is possible, at least keep your better prospects somewhat contented. It will vary from player to player what it takes to do so. But you can get a good idea by looking at the categories of their morale. Perhaps they hate losing and they are angry because they are stuck on a horrible team. Can you make some moves that might improve that team? Or maybe they are ready for a promotion to the next level, where hopefully you have a less awful team? Maybe they just really hate it when they don't do well personally. If they are really struggling to perform and this is the main reason for their discontent, might be good to send them back down a level where they can theoretically thrive for awhile and get their mojo back. Anyway, that is just two examples, but you get the idea.
My feeling is that developing players is more an art than a science. (But this might just be my bias because I am more an artist than a scientist.) With time, and yes, with a track record of dismal failures, you will eventually get the feel for this.
You know, fail, learn, fail better, etc.