The State of Leadership Capability: 2026 Edition
The Capability Gap, measured.
Most organisations don't have a leadership shortage. They have capability that was never installed. Here's what that looks like across thousands of leaders.
The shape of the gap
The offsite worked. For three weeks, people spoke differently, decisions moved, the room felt aligned. Then the quarter reasserted itself, the inbox, the firefights, the old defaults, and by the second month nobody could say what had changed. The energy was real. It just had nowhere to live.
And then there was the leader everyone relied on. The one who held the standard, who knew how the work actually got done, who absorbed the friction so others didn't have to. When that person left, they didn't take a role. They took the operating system, and the team discovered it had never been written down.
This is the gap. Not a deficit of talent. A deficit of capability that was never built into the structure of how the organisation works.
The gap across the Five Structural Pillars
How leaders actually score across the five pillars that determine whether capability holds, drawn from the free 5D Leadership Capability Diagnostic. This dataset grows and sharpens every time a leader completes it.
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See where you personally stand. Take the free 10-minute diagnostic and get your own profile across these five pillars. Take the diagnostic →
The global picture
Disengagement isn't a local problem, it's structural, everywhere
Engaged at work, by market
global average 20%Across every market we serve, the majority of employees are not engaged — the clearest signal that leadership capability was never installed.
Source: Gallup, State of the Global Workplace 2026 · three-year rolling averages
The wider picture
What the industry is finding, and what it misses
Gallup's 2026 State of the Global Workplace put global employee engagement at 20%, its lowest point since 2020, and priced the damage at an estimated $10 trillion in lost productivity worldwide. Most of that recent decline traces to one group: managers. Manager engagement fell from 27% to 22% in a single year, the sharpest drop Gallup has recorded.
Gallup calls this an engagement problem. I don't think it is. Engagement is what you measure after the fact. What actually failed is Cultural Reinforcement, the pillar that determines whether good management behaviour is the easy path or the exhausting one. A manager who is disengaged by month eight was rarely disengaged on day one. Something in the system stopped reinforcing the standard, and nobody was watching that pillar because it is the quietest one.
DDI's 2025 Global Leadership Forecast found trust in immediate managers has fallen to 29%, down from 46% in 2022, and that 40% of leaders under sustained stress have considered leaving leadership altogether. That is not a wellbeing statistic. That is capability walking out the door in the shape of a person, exactly the failure mode this page opened with.
SHRM's CHRO research backs this from the other direction: leadership and manager development has been the top priority for CHROs two years running. The people setting budgets already know where the gap is. What the research does not tell you is how to close it, because closing it is not a research question. It is a structural one.
Where the gap hides
Capability Pathways
Across the five pillars, one consistently runs weakest: Capability Pathways, the question of whether an organisation has a deliberate route for turning a capable individual into a repeatable, transferable standard.
Most organisations are strongest where capability is most visible, alignment in a town hall, identity in a values statement. They are weakest exactly where capability has to be built quietly, over time, into how people actually develop. That is why the gap stays hidden: it lives in the pillar nobody is watching.
Why it persists
The Event Trap
The gap persists because most organisations treat development as an event, not as infrastructure. A workshop. An offsite. A programme with a start and an end. The event creates a spike, and a spike, by definition, returns to baseline.
Infrastructure behaves differently. It is built once and then it holds: the standard is encoded, the pathway is repeatable, the capability survives the person who first carried it. The Event Trap is the quiet belief that you can buy a spike and keep a system. You cannot. Capability that isn't installed into structure decays the moment attention moves on.
The cost
What the gap quietly charges
Spend that evaporates
Development budget converted into a few good weeks, then nothing durable left to point to.
Decisions that wait
Choices that should sit one level down keep escalating, because the capability to hold them was never built there.
People who leave
Capable people leave for places that will grow them, and the standard they carried leaves with them.
What "installed" looks like
System, not heroics
Heroics
- The standard lives in one person's head.
- Quality depends on who happens to be in the room.
- Development is something you attend.
- When the key person leaves, the capability leaves too.
- Good weeks, then drift.
System
- The standard is written into how work is done.
- Quality holds regardless of who is in the room.
- Development is something the structure produces.
- When someone leaves, the capability stays.
- A baseline that rises and holds.
From Stuart Andrews, The Leadership Capability Architect
"Capability is not something you find in a person. It is something you build into a structure so that it survives whoever happens to be standing in the role."
Stuart Andrews, The Leadership Capability Architect
Read the free chapter →One leader, before and after
When capability got installed
Before. A senior leader, widely respected, running a team that ran on her. Every meaningful decision routed through her. Every new hire learned the standard by watching her. She was the capability, and she was also the ceiling. Nothing scaled past what she could personally hold.
After. The standard she carried was made explicit and built into how the team operated, the way decisions were framed, the way work was reviewed, the way newcomers were brought up to speed. The change was not that she did less. It was that the team could now do what she did without her in the room.
The capability stopped being a person. It became infrastructure.
Closing the Gap
See if you recognise yourself
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Proof
In their words
Real leaders Stuart has worked with — across telco, financial services, healthcare, supply chain and high-growth firms.
Taking teams to the next level
"I engaged Stuart to take my executive team from a group of high-performing individuals to a high-performing team. He read my staff well and unlocked potential, some now operate at a much higher level. I've since retired as CEO, and he's continued to assist my successor with a smooth transition of leadership. If you're a CEO looking to take your team to the next level, don't start without talking to Stuart."
Chris Cunniffe
CEO · Tax Management NZ
All about tangible results
"Stuart's method differed from a lot of executive coaches. Instead of theory, he led workshops solving the real challenges in the business at the time. I rate him very highly, he's all about tangible results, takes personal interest in the client, and uses an evidence-based approach to recommend what will really shift the dial."
Neil Bhattacharya
Head of Business Relationships · TMNZ
Challenges the thinking
"Stuart is not just interested in process and milestones, but interested in the detail and has been a valuable contributor to our strategy. Integrity is a strength, and he is not afraid to challenge anyone where he sees a more efficient way of tackling a problem."
Mel Anders
Associate Director, Partner Relationships · Optus
Conscientious and highly skilled
"Stuart is a conscientious, highly-skilled leader with deep insight into the securities-market industry, an expert in needs analysis, planning and execution, with the ability to find creative solutions to complex problems."
Rakesh Vengayil
Chief Operating Officer, Asia Pacific · Global financial services
Change expertise SMEs don't have in-house
"Stuart's organisational-change expertise has been invaluable, beyond the leadership work itself. Large enterprises are usually well equipped for this kind of program; SMEs typically aren't. I'd thoroughly recommend him for any mid-sized organisation taking on major change."
Chris Cunniffe
CEO · Tax Management NZ
Translated the technology into plain language
"The project needed real technical depth, strong communication across business areas, and an aggressive timeframe. What stood out was Stuart's ability to translate the technology into language I could actually understand, and whenever we hit a roadblock, he already had the options to resolve it."
John Wilkes
Chief Internal Audit Officer · Suburban Rail Loop Authority
Proof
What closing the gap produced
Real engagements where capability was installed as infrastructure, and the gap actually closed.
Fortis Investment Management Australia (FIMAL) → BNP Paribas
Alignment SystemConstraint
Under a global corporate transaction, FIMAL's European parent was acquired by BNP Paribas. With $4.3B in local assets under management across individually managed accounts, the APAC restructure carried extremely complex and sensitive strategic and operational stakes, and two earlier attempts to lead the integration had already failed before Stuart was called in.
Intervention
Brought in as the fixer after two prior attempts had stalled, Stuart took over the restructure and led the APAC region integration program end-to-end through the M&A, resolving leadership and operating-structure issues across the newly combined organisation on multiple fronts simultaneously, not the single workstream that had failed twice before.
Outcomes
- Succeeded where two earlier attempts had failed, the $4.3B AUM APAC integration led through to completion
- Strategic and operational continuity maintained across multiple fronts through a highly sensitive restructure
- Individually managed accounts transitioned without disruption to service
- Earned a lasting reputation inside the organisation as "the Fixer", the person called in when an integration was already failing, not just when it started
International Telco · multi-team
Confidential engagementConstraint
Change kept living in the PMO instead of the business, this wasn't the first attempt: new processes and systems had already been rolled out more than once without sticking, adoption stalling below 60% each time, with every relaunch meaning the same work redone from scratch.
Intervention
Rather than run a fourth identical rollout, installed a common leadership language and toolset owned by the leaders themselves, not the program office, fixing the ownership problem, the process problem, and the habit problem together.
Outcomes
- Adoption of new processes and systems rose from 57% to 86% in 6 months, this time, it actually stuck
- Rework due to poor adoption decreased by 33% within 9 months
- Stakeholder satisfaction with change delivery improved by 19 points over 12 months
Healthcare scale-up · ~$60M
Confidential engagementConstraint
Rapid hiring had roughly doubled headcount inside eighteen months, and the culture hadn't kept pace, what got rewarded in practice (speed, individual heroics) quietly contradicted what leadership said mattered (collaboration, sustainable pace). Regretted attrition was climbing fastest in the teams the business could least afford to lose, and exit conversations kept naming the same gap: what was said and what was actually lived didn't match.
Intervention
Activated a cultural reinforcement system rather than another values poster, translated the stated values into specific, observable behaviours, built them directly into how every manager ran recognition and performance conversations, and made the gap between what the organisation said it valued and what it actually rewarded visible and correctable in real time.
Outcomes
- A culture the team is proud of again, not just words on a wall
- Regretted attrition in critical teams fell
- What gets rewarded finally matches what's said
International Bank · global division · 1000+ leaders
Confidential engagementConstraint
A multi-region digital transformation was already stalling by the time Stuart stepped in, each country ran its own version of the operating model, wide variance in performance, and rising local resistance to change, after an earlier transformation cycle had failed to land.
Intervention
Took over a program that had already burned one cycle and installed a single execution rhythm across every country at once, decision rights, meeting cadence, and accountability loops fixed together rather than one country at a time, coaching local leaders to run it themselves instead of waiting on direction from HQ.
Outcomes
- 87% of countries implemented the new operating model within ±10% of the planned timeline over 18 months, in the cycle that actually landed
- Performance variance in core processes across countries reduced by 27% in 12 months
- Escalated resistance incidents decreased by 38% compared to the previous, unsuccessful transformation cycle
Which of these is you?
The gap looks different depending on where you sit, here's what closing it looks like for your role.
For Founders & CEOs
For founders and CEOs whose business has outgrown what they can personally decide.
For People Leaders (CHRO/CPO)
For CHROs and CPOs who need leadership capability that's measured, not just delivered.
For Managers
For managers promoted into leadership with no real preparation for the people part.
For Individuals
For individual leaders who want a real 360, not a self-assessment.
Where do you stand?
Take the free 10-minute diagnostic and see your own profile across the Five Structural Pillars, including where your capability gap is hiding.
Take the free diagnosticFrequently asked questions
Methodology. Figures are drawn from completed 5D Leadership Capability Diagnostics and shown as a calibration baseline, an expert reference that refines toward the live cohort with every diagnostic completed. No individual data is shown; all figures are aggregated and de-identified.
How to cite this research: Stuart Andrews, State of Leadership Capability, 2026 Edition, stuartandrews.me/state-of-leadership.