Benjamin - - -

Great question; very difficult to answer, as you noted. A thought:

If the organization is a family company (i.e., if the “non-leader leader” is the owner), it is most difficult, because no one is going to “fire” them — and as an HR person (and employee), you need to come to grips with that fact. If there is some leadership potential in the individual, certainly you can work with them (quietly and behind-the-scenes, of course) to help bring out whatever latent potential there might be. At the same time, the most effective strategy may be to help the “non-leader leader” see their own strengths and weaknesses, point out the organization’s great need for leadership skills that the individual may never wish to have themselves (because it is wholly outside of their comfort zone), and work with the individual to design the organization in a way that a leader/manager is brought on board.

This doesn’t diminish the owner’s power (everyone always knows who the owner is and where the ultimate power resides) — but it does eliminate a tremendous amount of bad feeling (usually unstated) against the owner for their leadership failings. The owner’s stature rises, the newly-hired “middle manager” brings new life to the organization, morale increases (with an attendant rise in productivity), and everyone’s quality of life is improved.

Ahh, yes — easier said than done, to be sure . . . but a worthy goal for all, still.