How to Ensure You Don’t Lose Great Talent to Promotions

A few years back, I watched an incredibly talented individual contributor — the most elite person on a particular team — get promoted into the role of managing that team. Everyone cheered and was genuinely excited for this freshly-minted leader. And then…things quietly started to fall apart.

It wasn’t for lack of effort. This person was putting in the hours and doing all the “right things.” But the role required a fundamentally different set of muscles — prioritization over execution, delegation over control, coaching over doing.

Within a couple of months, someone whose execution had been absolutely flawless looked overmatched, overwhelmed, and deeply unhappy in their job.

A month later, they had left the company.

We had taken one of our brightest potential talents, put them through the meat grinder of a role that wasn’t a great fit for them — and lost them entirely.

The Peter Principle is real. Amazing people can get promoted right into failure. How can we avoid this outcome?

What is the Peter Principle?

For those unfamiliar, the Peter Principle states that people in organizations tend to be promoted until they reach their level of incompetence. You watch someone crush it in role after role, so you keep promoting them, until suddenly they hit an invisible wall and can’t perform.

The brutal reality is that once someone reaches that wall, they almost always leave the company. It’s nearly impossible to step backward to the role where they were wildly successful, for reasons that are entirely predictable.

Their old role has been filled.

Nobody wants to lose face by taking a title demotion.

They’ve re-budgeted their personal finances around their new salary.

We lose great people not because we try to promote them, but because we make these promotions a one-way door.

After watching this pattern play out too many times, we completely changed our approach to promotions at Riskalyze. Instead of promoting people and hoping they’d figure it out, we started giving ourselves the time to prove they could excel in the new role before we made it permanent.

Interim Assignments Are Your Secret Weapon

How does this work?

Before anyone gets promoted, they step up to take on the new responsibilities on an interim basis. They get to test-drive the role, and we get to observe their performance with much lower stakes.

Sometimes interim assignments happen quietly. If someone wants to move from one individual contributor role to another, they might agree with their manager to take on some of those new responsibilities for a few weeks or months. Nobody else even notices it’s happening. At the end of that period, the manager either moves forward with the promotion or the person goes back to their original work.

Other interim assignments are more visible. When a manager role opens up, we communicate that we’ve asked this person to step up and help with those leadership needs on an interim basis. If it works out, we celebrate the permanent promotion. If it doesn’t, we publicly thank them for being dedicated and helping us out.

If the additional responsibilities require significantly more hours, I’ve often negotiated a special one-time bonus as appreciation for the extra work.

This approach protects everyone. The employee doesn’t face the career damage of a failed promotion, or the inability to get back into the role they loved. The team doesn’t suffer under someone who isn’t ready. And the company retains amazing talent.

Making Promotions Merit-Based, Not Political

Part of our approach was to rigorously focus on eliminating any hint of politics from our promotion decisions. It’s far too easy for promotions to become a breeding ground for organizational politics. The best way to prevent that is ensuring every promotion is widely perceived as based solely on merit, excellence, and intelligence.

We accomplish this with a process that mirrors our hiring approach.

First, there must be a job scorecard for the role we want to fill. You can’t evaluate someone fairly without clear expectations.

Next, the manager would fill out a promotion scorecard that’s very similar to our interview scorecards. This document captures why this person is the right fit for this role.

The completed scorecard went to all S-Team members the day before our weekly meeting. Any one of them could “pull” the promotion for discussion up to an hour before the meeting, and managers reserve time to join if their promotion gets pulled.

Finally, S-Team would vote to approve each promotion — and even a single person with a thumb down might lead us to slow down and evaluate it more carefully.

This process eliminates the perception that promotions are handed out based on who you know, or who your manager likes best. Everyone sees the same evaluation criteria, and every promotion requires broader organizational buy-in.

The Hidden Cost of Premature Titles

Another foundational component of fixing this was being careful with job titles. They might seem like a “free” thing you can give out, but I’ve seen 20-person companies with five C-levels, and it almost always creates major problems down the road.

Too many growing companies hand out these C-level titles to people who are leading a function but whose job responsibilities don’t match what you’d expect from a typical C-level leader.

Here’s the problem: when your organization grows faster than even your most talented people can handle, you will often need to bring in more senior talent to run a function and mentor your existing leader.

But if you’ve already given away the C-level title? You’re stuck. While many people can accept getting a new boss if they see opportunities for growth, almost nobody is willing to take a demotion. They leave instead.

I’ve started to err on the side of giving titles that designate someone as a leader in their function — Marketing Lead, People Operations Lead, Finance Lead. As we reached scale, we were able to determine the appropriate promotion for these individuals to Director, VP, SVP, or C-level titles.

I think it’s important to only grant ranked titles when I’m confident the person’s job responsibilities match what those titles mean in the broader world — or at least match how I think about that role long-term.

The Bottom Line

Great companies protect their people from career damage while still creating opportunities for growth. They make promotions based on demonstrated excellence rather than hope and politics. And they think strategically about titles to preserve flexibility as they scale.

Getting promotions right isn’t just about being fair to your employees — though that matters tremendously. It’s about building an organization where your best people can grow sustainably, where merit drives advancement, and where you don’t constantly lose great talent to the meat grinder of “wrong role.”

The companies that master this approach don’t just retain their top performers — they develop them into the leaders who will drive their next phase of growth.