One of the most common realities of the business world -- just as in the world of sports -- is that the best "players" don't necessarily make the best "managers," "coaches," or "leaders." We see this time and time again. High performers who succeed based on their talents often have no patience or tolerance for those who cannot keep up or perform at their level. Having someone like Michael Jordan, one of the best -- if not THE best -- basketball players of all time, trying to coach a team just by saying to his players, "Just do what I do!" is not going to get him anywhere...which is why he failed as a coach. As have many other talented players. As well as top sales people who become sales managers; top IT people who become IT managers, etc.
But that doesn't mean that your situation is unfixable...not at all! Because "managing," "coaching," and "leading" are skills. And they are skills that can be -- and must be! -- developed.
My suggestion would be to either get her a coach, or, if there are others who might benefit, bring in an experienced consultant/trainer/coach who can deliver a management/leadership development program for your entire management team so they can all go through the experience together. There are also tons of great books, articles, and videos out there that might help (let me know if you would like suggestions).
The key is to make this manager aware of the impact her poor management is having, and get her to take ownership and be willing to do something about it. But she's got to see the "WSIC" (Why should I care) and the WIFM (What's in it for me) if you want to gain her buy-in. Conducting a 360 assessment or doing a Manager Scorecard survey of her direct reports will give her the feedback she needs to make her aware of how she's doing as a manager.
Yes, there are costs associated with doing all this (assessments, training, coaching)...but what is the cost -- to her, to her team, and to your organization -- of not doing anything?