By Paul Starbuck MCC, Founder and CEO of Starbuck & Associates
The leadership gap: what your accounts don’t show
Every year, someone independent goes through your accounts line by line. Your stock is counted, your debtors are chased and your property is valued. Yet the asset that decides whether any of those numbers grow, the leadership team running your business, is rarely examined at all.
That is a remarkable blind spot. Your strategy, your biggest customers and, one day, the value you realise when you sell or step back all depend on the people sitting around your leadership table. Most owners know exactly what their stock is worth. Far fewer could say, with any confidence, what their leadership team is worth, or what it is quietly costing them.
I have spent more than 35 years in and around boardrooms, first leading large teams in retail and healthcare, and since then coaching directors and board members at some of the world’s largest businesses. The pattern I see most often is not a lack of talent. It is a leadership gap: capable people promoted into senior roles, then left to work out the hardest part of the job on their own.
What the leadership gap costs, in pounds
The research is blunt. The Chartered Management Institute and YouGov found that 82% of people entering management roles in the UK had no formal management or leadership training when they took up the role. Many of the people now running divisions, signing off budgets and representing your business to its most important clients stepped into leadership without being prepared for it.
That gap has a price, even if your accountant never sends you the bill.
Oxford Economics found that replacing a single UK employee costs a business £30,614 on average, most of it in output lost during the 28 weeks a new starter takes to reach full productivity. That figure is at 2014 prices, so today’s cost is higher. Research by the Chartered Management Institute and YouGov found that one in three UK workers has left a job because of a negative work culture, and half of those who do not rate their manager plan to leave within a year.
Then there is the upside you are not getting. Speaking in 2017, the Bank of England’s then chief economist, Andy Haldane, said that a one standard deviation improvement in the quality of management raises productivity by around 10% on average. That is better output from the people you already employ.
None of it appears as a line in your accounts. It is hidden in recruitment fees, delayed decisions, initiatives that never quite land and good people who quietly take their talent to a competitor.
Who runs the business when you step back?
Ask most owners what they want from the next five years and the answer is some version of freedom. Time to step back, to bring in a chair, to sell, or to hand over to the next generation.
Every one of those depends on a leadership team that can run the business without you. And this is where the gap does its real damage. Many businesses have grown around a founder who still makes the important calls, a senior team that defers rather than decides, and a layer of directors promoted for being brilliant at the work rather than for leading the people who do it.
It rarely shows while you are in the room. It shows the moment you are not. Decisions wait for your return. Problems reach you late, after they have become expensive. Good people leave because nobody below you has the confidence to lead them. And when a buyer or investor looks closely, a business that depends on one person is worth less than one that does not.
The same is true in larger organisations. Boards regularly sign off strategies their executive teams are not equipped to deliver, then wonder why the plan stalls. A strategy is only as strong as the leaders responsible for carrying it out.
Five questions to bring to your next board meeting
- If I stepped back tomorrow, who would run this business, and would they be ready?
- Is our senior team genuinely aligned, or just polite to each other in the room?
- What did losing good people cost us last year, in pounds rather than percentages?
- Which of our directors have ever been developed as leaders, rather than simply promoted?
- If a buyer looked at our leadership team today, would it add to the value of the business or take away from it?
If any of those made you pause, you are in good company. Most of the owners and chairs I work with could not answer them with confidence either, until they looked.
Closing the leadership gap: what the best-run businesses do differently
The businesses that get this right treat their leadership team like any other asset that matters. They invest in it deliberately, review it honestly and do not leave it to chance. In my experience, three things make the difference.
First, they give their most senior people a proper thinking partner. The higher someone rises, the fewer people will tell them the truth. Confidential CEO executive coaching gives owners and chief executives a place to test decisions, see their blind spots and lead with more clarity. Not all coaching is equal at this level, which is why we have written about how to choose an executive coach.
Second, they develop the leadership team as a team. Some of the most expensive problems in a business are nobody’s individual fault. They sit in how a senior team communicates, decides and trusts each other. Our senior leadership transformation work and our team effectiveness programme help executive teams align around strategy and take ownership of it, so the business no longer runs through one person.
Third, they strengthen the board itself. Good governance depends on non-executives who can challenge, support and see around corners. Our non-executive director coaching and mentoring for senior leaders help board members bring that confidence and judgement to the table.
The businesses that win the next decade will not simply be the ones with the best strategy. They will be the ones whose leaders can deliver it without the owner in the room.
Check your own leadership readiness
We have built a short leadership readiness check around the questions in this article. It takes two minutes, your answers stay private, and it shows where to look first. It also gives an illustrative estimate of what avoidable staff turnover may be costing a business like yours, with every assumption shown. Take the leadership readiness check.
Book a free leadership conversation
If this article has brought a name, a team or a decision to mind, let’s talk.
We offer a free, confidential leadership conversation with me to business owners, chairs and chief executives, to look at what is really going on in your senior team and where to start. Book your free leadership conversation, email hello@starbuckassociates.com or call +44 1529 240355.
About Starbuck & Associates
Starbuck & Associates is a B Corp certified coaching and leadership development company, working with organisations across the UK, Europe, the US, the UAE and Australia. We were named Coaching Business of the Year 2025 at the National Coaching Awards and are finalists for Learning and Development at The Investors in People Awards 2026 (see our awards). We also run ICF accredited coach training and publish Coached™ magazine.
Frequently asked questions
What is a leadership gap?
The difference between the leadership a business needs to grow, and the leadership it actually has. It often appears when capable people are promoted into senior roles without being developed for them.
How much does it cost to replace an employee?
Oxford Economics found that replacing a UK employee costs £30,614 on average, mostly in output lost while a new starter reaches full productivity. That is at 2014 prices, so the cost today is likely to be higher.
How many UK leaders have had no leadership training?
The Chartered Management Institute found that 82% of people entering management roles in the UK had no formal management or leadership training when they took up the role.
How can a business owner prepare the business to run without them?
Develop the senior team before you need it: coaching for the people at the top, development for the leadership team as a whole, and a board that can challenge and support. Start early, because it takes time to build.
Is executive coaching worth it for business owners?
At senior level, the value of coaching lies in better decisions, a stronger team and a business that depends less on one person. Measured against the cost of losing senior people or a stalled strategy, it is usually a small investment.
