Matthew Ryder argues against promoting your best employees into management roles. He cites the Peter Principle, which says people get promoted until they fail, and warns that internal-only promotions create echo chambers that stifle growth and diversity of thought in leadership.
Never promote your employees. There's a thing in business called the Peter Principle. Let's say you have an awesome sales guy. He's crushing it. And you make the catastrophically stupid mistake of promoting your best sales guy to manager. If you internally promote, what are you doing? You're creating an echo chamber within your own business. Okay? So what you need to grow is you need different thought. You need diversity of thought. And if everyone comes up from the bottom the entire way up, then everyone will have the same thought pattern as me, because I taught everybody how to think think. I taught them how to problem solve. I taught them how to do the sale. I taught them how to do this. So essentially, everyone is a somewhat replicant of me with, like, different variations and from different experiences. However, there is no real diversity of thought. So what you then have to do is you have to bring externals in. You have to be very careful, only internally promoting, because you end up really stifling someone's career because you're not willing to have a tough conversation.
