Purpose - This paper aims to analyze the leadership role of first-line managers in self-managed production units, particularly the existence, relevance and closability of competence gaps. Design/methodology/approach - Self-assessments on competence and other variables shed light on the first-line managers' situation; a quasi-experiment investigates the effects of a leadership development programme. The sample consisted of 38 lower-level managers in a typical manufacturing plant in Germany that had recently introduced a teamwork structure. Findings - Results indicate that the production unit managers report difficulties with their new leadership-related tasks. Higher levels of leadership competence are found to be associated with better perceived acceptance as a manager by superiors, but not by subordinates, better interaction with both subordinates and superiors, and with higher job satisfaction. Finally, a quasi-experiment shows that a combination of workshops and individual coaching has measurable positive effects on reported leadership competencies and partly improves identification with the managerial role. Research limitations/implications - The causality of the relationships requires further research, ideally with larger samples, as does the partner-oriented leadership style that tends to be practiced by the first-line managers. Practical implications - The findings imply that it is advisable to improve front-line managers' leadership competencies and identity, and that leadership development can contribute to closing the competence gaps. Originality/value - This paper closes a research gap regarding a key position in modern work organizations by using a new format of self- assessments for a more valid measurement of competencies.