It's so hard to do well that most organizations shouldn't do it. I have never seen a good manager hired from the market. Through referrals/network: yes, from within: yes, but never from a posting "come be a manager here". I'm not sure if the interview funnel is hard to build, or if the posting attracts the wrong sorts of people, or maybe another reason entirely.

The common theme in both of the successful methods is that the candidate's leadership ability has already been observed. And if they already work for you, then they have a value adding position they can revert to if they turn out not to be a great leader.