Ever heard of a bloke called Kenny Dalglish?
Kenny didn't coach though. He took care of man-management and transfers. At Liverpool he let Evans and Moran do their thing. At Blackburn he brought in Ray Harford. On his return to Liverpool, he brought in Steve Clarke.
So there's probably little doubt that one of Gerrard or Xabi could do the man-management and transfers part. In fact, they probably do it better than the people who didn't play professionally, or to a high level. If we look at those types of managers, then it's not a surprise that a lot of them tend to end up having personality clashes with their players whenever they are managing the absolute top players. Not so much for sub-elite players though, because any success with those players creates buy-in.
But Tactics Tim can do the man-management part. I don't think there is a doubt about that facet, from either or both of Xabi or Gerrard. The question I posed, at least, was "who brings the coaching ability?". And that's where being an ex-player of some renown is of no benefit at all.
Because it's the planning of an entire season of coaching, breaking that down into blocks, breaking those blocks down into individual weeks, planning each week according to the game schedule, having an overall playing plan, breaking that plan into the various units, then the individual tasks within each unit; selling that vision to the players, keeping that vision in front of them in the face of losses, making sure the players who aren't playing are capable of retaining their interest in that vision, getting out on the training pitch and going through the specifics of that vision in an organized and varied manner. Then, choosing the right exercises to bring out the key factors of that vision such that the players are confronted with the problems and are guided to the solutions. Choosing the right fitness components to enhance that vision, whether specifically and separately, or in an integrated manner into the actual tactical and technical exercises. And then, creating feedback loops so that players can see not only their own progressions, but the progressions of their units, and then the team, so that the next block of coaching follows logically from the previous one, until a cohesive picture is built up in the player's minds of what the coach wants from them.
All of that (and that's just the surface), is why most top ex-players don't live up to expectations as coaches and managers.