Forty-four percent (44%) of Australian managers have received no formal leadership training, yet they are the people your business depends on to execute, retain and grow. If everything still passes through you, this is not a people problem. It is a pipeline problem.
There is a sentence I hear from the CEOs I work with almost every other week.
It sounds like a talent complaint. It sounds like a frustration with a specific person. But underneath it, it is always the same structural problem wearing a different face.
"There is no one there who can think and make decisions quickly."
I heard a version of this from a CEO at a roundtable I ran recently. He runs a business across three states. He is flying back and forth, city to city, because the managers in one location cannot hold the weight of the operation without him. He is not there because he wants to be. He is there because he is still developing leaders to make decisions.
He is not alone. I hear it in every room I work in, across manufacturing, professional services, recruitment and infrastructure. The CEO is still the one every decision passes through. The CEO is still the one who gets the call on a Tuesday afternoon about something a competent manager should have resolved by Thursday morning.
What looks like a people problem is almost never a people problem.
It is a pipeline problem.
Here is what typically happens in a growing Australian mid-size company.
Someone performs brilliantly as an individual contributor. They hit their numbers, they earn trust, they demonstrate drive. The CEO rightly wants to retain them and reward them. So they get promoted.
The title changes. The salary changes. The role, on paper, changes entirely.
The capability does not.
This is not a criticism of the person who was promoted. They were excellent at what they did. They were just handed a completely different job: leading people, managing performance, holding others accountable, delegating without losing sleep. They were given no tools, no structure, and no development to help them do it.
According to Robert Walters Australia, 44% of Australian managers have received no additional training to carry out their manager duties. Of those surveyed, 32% admitted feeling under-supported. 26% felt like an imposter. Just 22% felt genuinely empowered in the role.
And the CEO who promoted them is now quietly absorbing the cost of that underdevelopment every single day.
Most CEOs in mid-size companies feel the impact of this problem before they calculate it. The cost sits in the hours spent resolving issues that should have been resolved two levels below. It sits in the team members who leave because their manager does not know how to lead them. It sits in the decisions that take three weeks because no one is empowered to make them.
When you do calculate it, the numbers are not small.
A management-level bad hire costs 18–20% of salary in direct terms, according to Robert Half Australia. That figure does not include the productivity drag on the team this manager oversees, the turnover it triggers, or the time the CEO spends managing around the gap. The Australian HR Institute puts the true cost of replacing a skilled employee at 1.5 times annual salary. For a manager on $150,000, that is $225,000 per departure, before anyone has noticed a pattern.
But the financial cost is only half the picture. The other half is culture, and it is the half that almost never appears on a balance sheet.
There is a pattern I hear from CEOs almost every time I run a roundtable. It comes up unprompted. It sounds almost identical every time. It goes something like this: "I wish I had let go of the toxic manager it sooner. I kept putting it off because I didn't want to upset people. But when it finally happened, so many people came up and thanked me. And then people felt safe to tell me what had been going on."
Teams that had been quietly losing their best people stabilise. Behaviours that had become “normal” because they went unchallenged simply stop. Culture does not always take years to repair; it recovers quickly once the source of the damage is removed.
An underdeveloped, unaccountable leader doesn’t just underperform. They set the standard. They teach everyone what is tolerated. And the good people, the ones with options, leave first.
What makes this particularly painful for mid-size businesses is that there is nowhere to hide. A large organisation can absorb an underperforming manager across a structure. In a 50-person business, one poor leader poisons a third of the company.
And yet 63% of Australian organisations do not measure the financial cost of turnover at all, according to the Australian HR Institute. The cost accumulates invisibly, dismissed as just the way things are, until the CEO is on a plane to another state because no one is holding the wheel.
There is a layer to this problem that makes it harder to solve: most managers genuinely believe they are doing well.
Research from the University of Melbourne's Centre for Workplace Leadership found that 84% of frontline managers believe they are effective at gaining employee commitment. Only 50% of employees agree. 85% of Australian managers believe they demonstrate care and empathy about their team's personal matters. Only 46% of employees feel the same, according to Allianz Australia's research.
This is not dishonesty. It is the absence of a mirror.
The manager cannot see the gap because no one has shown it to them clearly enough. They are operating on self-perception alone. Self-perception without data, without feedback, and without structured development almost always runs ahead of reality.
The CEO can see the impact clearly. The manager cannot see the cause at all. That asymmetry is where the frustration lives, on both sides of the relationship.
The data from my own leadership program makes this visible in a way that is hard to argue with. When participants rate themselves at the start of the program and again at the end, and their managers do the same independently, the gaps that appear tell a more honest story than any performance review.
Take recognising and rewarding the right behaviours. Across a recent cohort, leaders reported no change in how much they were doing this. Their managers reported a 19% improvement. The leaders were doing more than they realised. They just could not see it.
The reverse is equally revealing. Leaders who came in rating their ability to provide difficult feedback quite confidently often found their managers saw significantly more room to grow than they did. Not because the leaders were performing poorly. Because the standard they were holding themselves to was not the one their team was experiencing.
I worked with a factory manager. I will call him Daniel. He lead a team of 55 people in a manufacturing business. He came into my program knowing something was wrong. He had an anger pattern when things went wrong on the floor and he knew it was there. What he did not have was a map for how to change it, or any real picture of how it was landing on the people around him.
The program's measurement process, which includes independent ratings from his direct manager alongside his own self-assessment, showed him the full picture for the first time. Not just that the anger was there. How far it was travelling, and what it was costing his team's willingness to flag problems early.
After a leadership coaching session with me, it shifted. He started sleeping more, managing his stress differently, approaching conflict with more curiosity than reaction.
Within two months, he was promoted. Today, the person who is succeeding him in his original role is running the factory as well as Daniel ever did. That is what development looks like when it sticks. Not a workshop. A process with teeth.
CEOs in mid-size businesses have almost always tried something before they come to me. A course. A workshop. A coach for one or two people. They invested in good faith and watched the behaviour revert within weeks.
This is not a failure of intent. It is a failure of design.
According to survey data cited in Entrepreneur, only 8% of managers believe their leadership programs actually work. Gartner research confirms that 70% of organisations report their current leadership development programs fail to prepare managers for what they actually face.
The programs fail for predictable reasons. They are one-off events, not sustained processes. They develop the individual in isolation from their manager and their team. They have no before-and-after measurement, so no one knows whether anything changed. And they have no accountability built in, which means the new behaviour has nothing to anchor it once the participant returns to Monday morning.
According to The CEO Institute, managers are managing more than ever, but doing it without the clarity, support, or structure they need. The program that works is not necessarily the most sophisticated. It is the one designed to stick: measurement at the start, measurement in the middle, measurement at the end, and the direct manager involved throughout.
Manager involvement is the piece most programs leave out, and it is the one that makes the biggest difference. When a manager’s own leader is part of the development conversation, behaviour change has somewhere to land. Without that, people return to the same context and the new awareness dissolves.
When development is done at the team level, something else happens. Managers build a shared language and use the same frameworks. Accountability stops feeling like confrontation because everyone understands the standard.
I saw this with a leader named Emma. She was strong with her own team, but when promoted to lead other managers she lacked the structure and confidence to hold them to account. Hard conversations were delayed and standards slipped. Her CEO put Emma and her leadership team through the program together. The change was quiet but real: the frameworks moved into daily conversations, and holding each other accountable started to feel natural, not combative.
According to their CEO, Emma's team met the strategic objectives that no other team had been able to achieve before.
That is what shared development produces: a common operating language that makes leadership consistent across the team, not just better in isolation.
Here is what strikes me most when I look at the leadership development landscape for Australian mid-size companies.
Most organisations that invest in development focus on their executives. They send the senior team to programs, they fund coaching for the leadership group, they invest in the top of the house.
The middle is left to figure it out.
And yet the middle is where the business lives. The mid-level manager is the person your frontline team interacts with every day. They are the one who determines whether people stay or go, whether performance is addressed or avoided, whether the culture you talk about in the executive team meeting is the culture your team actually experiences on the floor.
Trust in managers has fallen from 46% to 29% in just two years, according to the DDI Global Leadership Forecast 2025. That is not a communication problem. That is a development problem. Managers who have not been built are not able to lead in the way their teams need. The cost travels upward through the organisation until it lands, again, on the CEO's desk.
Gartner research shows that 75% of HR leaders believe their managers are overwhelmed, and that 70% of current leadership development programs fail to prepare managers for future demands. This is particularly acute for Australian SMEs, according to PerformHR's 2025 research. These are businesses that operate with lean teams and limited budgets where every underdeveloped manager has outsize impact.
The CEOs I sat with at a recent roundtable understood this instinctively. One described the moment he realised his general managers had never even been given their own budgets. They had been making decisions for years without the information or authority they needed to make them well. Another described the shift in her organisation when she stopped waiting for her managers to step up and started building the conditions for them to do it. The change, she said, was almost immediate. Not because the managers suddenly became different people. Because they finally had what they needed to act like the leaders they were supposed to be.
If you are reading this and recognising your business in it, the temptation is to look for the course, the coach, or the workshop that will fix it.
That impulse is understandable. It is also the pattern that has already not worked.
The question worth sitting with is not "What program should I send them to?" It is: "What does my organisation need to build around this person to make the development stick?"
That means measurement at the start, so there is a baseline to work from. It means structured development over time, not a two-day event. It means involving the direct manager, so accountability is shared. And it means real-world application between sessions, so the learning is not theoretical.
The leaders in my Tribe of Trusted Leaders program are measured before the program begins, at the midpoint, and at the end. Their direct manager is involved in that process throughout. 95% are deemed promotion-ready by the time the program closes. 62% have already been promoted.
Daniel, the factory manager, did not transform because he attended something. He transformed because he was measured, challenged, supported, and held accountable over time, with the people around him involved. He was also keen to transform. That is the difference between development that stays and development that evaporates.
When a CEO tells me everything still passes through them, I do not hear a staffing complaint. I hear an investment gap.
The business grew. The leadership layer was not grown alongside it. The managers who were promoted were excellent at what they did before. They were handed a role that required an entirely different set of capabilities and given nothing to build those capabilities with.
That is fixable. It is not fast. It does not happen in a workshop. But it is entirely fixable. The return on fixing it is not just performance data. It is the CEO getting off the plane and knowing the operation is running without them.
That is what good leadership development is designed to produce. Not better managers in isolation. A better-run business. And a leader who finally has room to lead.
Marie-Claire Ross is the founder of Trustologie® and author of Trusted to Thrive: How Leaders Create Connected and Accountable Teams. She works with mid-size companies across Australia to build leadership pipelines that stick. Her program, the Tribe of Trusted Leaders, has an 95% promotion-ready outcome and has been running since 2023.
If you recognise this problem in your business, you can learn more at Tribe of Trusted Leader's or reach out directly.
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