It is a familiar story in Australian workplaces: an employee who consistently outperforms peers gets promoted into management. On paper, it seems like a reward for loyalty and hard work. In reality, this decision often backfires, leaving businesses with disengaged teams and burned-out managers.
The truth is that being a high performer does not automatically mean someone will be a great leader. Leadership requires a very different skill set, one that must be nurtured and developed, not assumed.
Why This Mistake Happens So Often
Business owners and executives often conflate performance with leadership potential. The logic seems sound: if someone can do their job better than anyone else, surely they can show others how to do the same.
But leadership is less about technical excellence and more about:
- People management: coaching, mentoring, and motivating others
- Strategic thinking: aligning team goals with organisational objectives
- Conflict resolution: managing disagreements constructively
- Communication: inspiring, listening, and influencing across levels
Without these capabilities, a top performer may find themselves out of their depth in management, leading to frustration for both them and their team.
The Risks of “Accidental Managers”
- Team disengagement: Employees managed by an untrained leader are more likely to feel unsupported and undervalued.
- High turnover: Poor management is a leading driver of resignations across industries in Australia.
- Burnout for the manager: Being thrust into leadership without training leaves top performers feeling stressed and unprepared.
- Lost productivity: Instead of lifting team performance, a poor manager often drags it down.
Capability Building: The Missing Ingredient
Instead of promoting based solely on performance, businesses should adopt a capability-based approach to leadership development. This involves:
- Assessing leadership potential: using tools like 360-degree feedback, behavioural interviews, or psychometric assessments.
- Structured training: offering programs focused on communication, delegation, and conflict management.
- Mentoring and coaching: pairing emerging leaders with experienced mentors to build confidence.
- Trial opportunities: providing short-term leadership projects to test readiness before formal promotion.
Case Study: The Step-Up Done Right
Consider a small business in Sydney that promoted a star salesperson directly into a sales manager role. Within six months, staff turnover spiked, and sales declined. The problem was not effort or loyalty, it was a lack of leadership skills.
The business course-corrected by providing external coaching and leadership training, as well as introducing a mentoring relationship with the general manager. Within another six months, employee engagement improved, and team performance stabilised.
The lesson is clear: leadership requires investment, not assumption.
Why Small Businesses Are Especially at Risk
In larger companies, structured succession planning often identifies leadership talent early. Small businesses, however, tend to promote reactively, waiting until there is a vacancy and then filling it with the best available performer.
This reactive model often creates accidental managers, people thrust into leadership with little preparation. The risk is amplified because small teams feel the effects of poor leadership more acutely.
The Smarter Alternative
Forward-thinking organisations are building leadership pipelines, where employees are:
- Identified early for leadership potential
- Given development opportunities before being promoted
- Supported with coaching and structured training once they step up
An external advisory like Hack Your HR helps small and medium-sized businesses implement these strategies without the overhead of an in-house HR department. By assessing capability gaps and designing tailored leadership programs, they ensure promotions translate into long-term business success.
Final Word: Leadership Is Learned, Not Gifted
Promoting your best performer without investing in leadership capability is like asking a skilled athlete to coach a team without training. Some may succeed naturally, but most will struggle.
The smartest businesses recognise that leadership is a craft. It requires patience, skill-building, and support. If you want sustainable growth, do not just promote your best performer, develop them into the leader your team deserves.