Every tech exec knows the feeling: the roadmap is solid, you’ve locked in budget, and yet momentum stalls. Not because the work is wrong, but because the leadership bench isn’t ready.

According to Talenza’s 2025 Tech & Transformation Talent Outlook, 61% of tech professionals plan to move roles this year. Many of them are emerging leaders. And if you're not planning for that shift, you're already behind.

Meanwhile, the AHRI found 77% of employers say they’re strengthening talent pipelines, yet just 14% prioritise leadership development. That’s more than a gap – it’s becoming a fault line. Especially when 53% of Australian CEOs name AI disruption, cyber risk, and transformation fatigue as their top concerns.

What does that tell us? Leadership fluency across tech, people, and systems is now a strategic differentiator. If it’s missing, retention suffers and projects slip while confidence fades.

This article explores:

• What’s really causing capability gaps in 2025
• How those gaps quietly derail transformation outcomes
• What CIOs, CPOs, and digital leaders can do to close them

Because in high-stakes delivery environments, talent strategy has to start with equipping them to lead. Let’s look more closely at some of that data.

What’s driving the gap?

The leadership capability gap isn’t new. But this year, it’s accelerating – driven by pressures that most executive teams can feel but many haven’t yet fully named.

1. Leadership expectations have quietly evolved while many orgs haven’t

The high-performers you’re trying to retain aren’t just looking for vision or strategy anymore. They’re looking for purpose, flexibility and a human-centred EVP.

But they’re also looking for leaders who are confident in certainty and uncertainty. Who can talk AI and ethics in the same breath. Who understand that “transformation” is a human process before it’s a technical one.

2. Mobility is outpacing succession planning

Talenza’s 2025 TTTO data shows 61% of tech professionals plan to move roles within 12 months, even in a softened job market. It’s not just mid-career talent making moves. Emerging leaders and senior contributors are shifting too – either stepping into more aligned roles elsewhere, or leaving to contract independently.

That turnover isn’t always visible until it’s disruptive. And it exposes thin succession plans that rely on a single “go-to” person rather than a repeatable leadership bench.

3. Investment is focused on pipelines (not readiness)

The AHRI reports that 77% of Australian employers are investing in talent pipelines, but only 14% are prioritising leadership development. That’s a critical mismatch. It suggests most businesses are trying to source great leaders, rather than build them. But when the pace of transformation outstrips onboarding speed, those externally hired leaders often struggle to gain traction.

And then what happens? You’ve probably seen it already. Good hires burn out. Or worse, they churn (taking institutional knowledge with them).

4. There’s a new kind of leadership fatigue

Senior leaders have weathered pandemic pivots, economic shifts, and now AI disruption. And, due to the speed of change, it was often without structured development support. Many have been holding delivery weight while also absorbing the emotional load of hybrid team management, cultural repair, and shifting employee expectations.

Without time to re-skill, re-orient, or re-charge, even high-calibre leaders start to wobble.

What does it all add up to? A growing mismatch between what transformation requires and what many leadership teams have the capacity to deliver.

And unless that changes, the leadership gap won’t just hold your organisation back. It’ll erode trust in the very people trying to move it forward.

What happens when capability gaps are left unchecked?

Leadership capability gaps don’t just dent morale. They derail outcomes. And for CIOs, CPOs, and transformation leaders, that risk is mounting.

According to PwC, transformation now hinges on leaders’ fluency in both systems and human dynamics. Not just technical literacy, but influence. Sponsorship and ownership.

When that fluency is missing:

• Strategic vision stalls at the exec table
• Delivery teams lose confidence in the direction
• Critical initiatives get delayed or diluted

Even well-funded programs can falter if the leadership bench can’t carry them forward.

Public sector agencies are already responding. The Australian Public Service Commission now uses formal capability audits to ensure leadership alignment with delivery outcomes. It’s a shift from theory to readiness, because good intentions don’t land change.

And, remember, high-seniority professionals are on the move. That means the gaps you’re seeing today might just be the beginning.

Three signs there’s a gap in your leadership bench

Some capability gaps announce themselves with resignations or missed targets. But most arrive quietly – in the lag, the friction, the slow drain on momentum. Here are three signs it’s time to take a closer look.

1. Your succession plan feels theoretical

You’ve got names on paper, but your gut says no one’s truly ready. When a senior leader exits, you scramble. That’s not just a talent issue — it’s a capability signal that needs to be acted on earlier.
“We thought they’d step up” becomes “We weren’t prepared.”

2. Delivery is competent, but not confident

Work gets done, but decisions stall. Dependencies stretch. Teams hesitate to escalate. If transformation feels slower than it should, the issue may be in leadership misalignment.

3. People are staying but disengaging

Retention looks fine on the surface, but the energy is flat. Your strongest contributors aren’t raising their hands for new challenges. High-potential talent is quietly coasting. That’s often a sign that they’re not inspired, or not seeing a path forward.

Most leadership gaps don’t start with a resignation. They start with someone quietly opting out of ambition because they’re not being led in a way that fuels it.

Now, here’s an important question: How do you build a framework to identify the gaps in the first place?

Start by borrowing a page from the Australian Public Service Commission playbook: conduct a capability audit aligned to your delivery goals.

Ask: what will your transformation actually require of your leadership team in the next 12-24 months? What skills, decisions, and dynamics will they need to lead through?

Then scan the signals. The most effective leaders are already using three things.

• Attrition and engagement data. Is a high-potential team quietly disengaging?
• 360 feedback loops. Is there daylight between how leaders see themselves and how others experience them?
• Performance bottlenecks. Are delivery teams stalling not from technical blockers, but decision paralysis or unclear escalation?

And finally, benchmark your findings against current market expectations. Talenza’s TTTO and the Sydney Executive Plus 2025 Future Skills Report are a good place to start – both highlight emerging must-haves like tech fluency, EQ, and systems thinking. If your top layer can’t demonstrate those traits, it’s not just a gap. It’s a liability.

The good news is, once you can see it, you can start to fix it. The first step is getting clear on exactly what you want to develop.

How future-ready leaders think (and lead) differently

According to the Sydney Executive Plus 2025 Future Skills Report, the highest-performing transformation leaders blend three core capabilities:

• Tech fluency. Not just awareness, but applied understanding of how technology shapes value.
• EQ and inclusive leadership. The ability to lead through ambiguity, build trust across hybrid teams, and foster psychological safety.
• Systems thinking. The mindset to zoom out, map complexity, and anticipate second-order effects (not just execute what’s in front of them).

They’re sharper leaders because they know how to balance velocity with sustainability.

The Deloitte “Mind the Skills Gap” report backs this up: leadership training investments often focus on generic skills, but it’s these compound traits (tech x human x strategic) that actually shift outcomes. Yet many organisations aren’t measuring or developing them.

These future-ready leaders:

• Ask better questions instead of reaching for faster answers
• Run capability audits, not just team standup
• Translate AI hype into meaningful risk/compliance strategies
• Know when to challenge the plan, and when to reframe it entirely

They’re the ones who create clarity without oversimplifying. Who steady the ship in order to speed it up. And they’re not always your most obvious high performers. Which is why the next section matters – because identifying and elevating these leaders can’t be left to chance.

Building the bench: From intention to investment

If you want leaders who can carry transformation, you need to invest in them like they’re part of your core infrastructure (because they are). Here are some things to consider.

1. Build on clarity, not charisma

Before you promote the “obvious choice,” get clear on what the next phase of transformation actually demands. What kind of decisions will this person need to make? What kinds of tensions will they need to manage? Then design the role (and the support) around that.

Too often, we inherit role scopes from last year’s structure and wonder why they don’t deliver. Future-ready teams start with delivery intent and backfill from there.

2. Recode EVP to reflect leadership behaviour

If your EVP says you support growth and flexibility, but your leadership culture rewards burnout and presenteeism, the gap will show. Fast.

High-performing teams align leadership norms with culture claims – so your best people don’t feel gaslit by the gap between what’s said and what’s seen.

A good first step? Use stay interviews and 360 feedback to map misalignments. Then coach your leadership cohort to close them, visibly and consistently.

3. Prioritise learning that compounds

Generic leadership training still dominates in many organisations, but it’s not what shifts outcomes. Deloitte’s “Mind the Skills Gap” report shows nearly half of employers don’t track ROI on leadership development. Now that’s a missed opportunity.

Prioritise training in compound capabilities:

• Tech literacy with decision-making fluency
• Emotional intelligence with systems thinking
• Inclusive leadership with commercial accountability

4. Move succession planning into sprint cycles

Annual reviews are too slow for today’s mobility rates. Consider adding leadership bench reviews to your quarterly operating rhythm, so you’re always planning 6-12 months ahead of critical shifts.

If someone leaves next week, who steps up? If no one’s ready, what’s your buffer strategy? These are your operational contingencies.

The best leadership pipelines are strong because they’re adaptive. Right now, adaptability is more than a leadership trait. It’s a business imperative.

Final thoughts: Don’t just map the future – equip your people to get there

Every transformation story has two arcs: the work and the people leading it. Most programs are over-invested in the first, and under-prepared on the second.

But when your leaders grow at the pace of change? That’s when momentum becomes sustainable.

Let’s build that bench, together.

Start here:

• Download the Talenza 2025 Tech & Transformation Talent Outlook for capability benchmarks and candidate expectations
• Book a 1:1 advisory session with Talenza to assess your leadership bench against upcoming transformation goals
• Explore a partnership with Tranzformd for hands-on uplift and delivery alignment

The hardest part about capability gaps? You rarely see them until they’ve already slowed you down.

But if you pause now, if you take a sharper look at what your transformation really demands, you might just stop the next slowdown before it starts. And that’s not just good leadership. That’s legacy-level thinking.