Tower Supervisor described near conflict event with two successive departures when Local Controller failed to note conflict developing; reporter listed his/her failure to provide timely corrective instructions.

Narrative

I was FLM (Front Line Manager) monitoring operations. Runway 5 was in use. A C172 had departed VFR with a turn to 350; climbing to 2000. Local Control (LC) then issued departure instructions to Aircraft X; a DH8A; turn left 280; climb to 2000. LC also issued the C172 traffic to Aircraft X with the takeoff clearance. I observed Aircraft X airborne and asked LC what heading Aircraft X was issued. LC stated 280 and reissued the turn to Aircraft X. The pilot responded 'unable'. I then asked LC what he was using for separation. LC stated he thought that Aircraft X would turn inside the C172. When Aircraft X gained some altitude and distance the Pilot said he could take the turn. This did not resolve the conflict since both aircraft were now on converging courses climbing to 2000. I thought LC would coordinate with the Departure Controller for a higher altitude or a different heading for Aircraft X but instead LC transferred Aircraft X to Departure. The alert Departure Controller immediately climbed Aircraft X. The aircraft passed each other with 600-700 feet vertical separation and what appeared to be zero horizontal separation. I allowed LC to resolve the situation assuming he would take action to ensure separation after his initial plan did not work. I did not expect LC to transfer Aircraft X to Departure. I should have instructed LC what to do when his initial plan clearly was not going to work; rather than question him on what he was using for separation. Recommendation; as FLM or CIC (Controller in Charge); when you observe an action by a Controller that will create a problem; take immediate action with the involved Controller. Instruct the Controller on what action you think is appropriate; then ask questions about the Controller's intent. If the Controller unexpectedly transfers communication with the involved aircraft; be prepared to coordinate with other controllers yourself. Follow up reviews and performance discussions are critical to ensure the involved Controller has a proper understanding of the required separation.