“Jim” has been with your company for 18 years.

~ He started as a machinist.
~ Moved into a supervisory role.
~ Became a manager.
~ Then a department head.
~ Now he’s your Vice President of Operations.

He’s loyal. He’s respected.
Is he ready for the C-suite?

Probably not.

And that doesn’t mean Jim has failed. It means the company may have.

Unlike large organizations, most privately held companies do not have multiple business units, formal rotational assignments, or layers of executive roles where leaders can be tested and stretched over time. There aren’t six adjacent roles to step into or a structured executive bench to learn from. Growth is lean. Promotions happen fast. And “high potential” often means “best performer in their current lane.”

As a result, many internal leaders develop deep expertise in one function—operations, sales, finance—but very limited exposure beyond it. They become indispensable specialists, not enterprise leaders. Yet when the need arises, they’re often tapped to step up.

That’s where the real risk begins.

Promoting from within is often framed as the safer option. It feels responsible. Familiar. Loyal. And in a small talent pool, it may be the only realistic option. But internal promotions are not automatically low-risk. In fact, without intentional preparation, they can be more dangerous than external hires.

Because tenure does not equate to readiness.

Too often, I see leaders promoted based on loyalty, longevity, or technical excellence rather than on whether they’ve been prepared for what comes next. “They’ve earned it” becomes the justification. But earning a promotion is not the same thing as being ready for the role.

The jump into senior leadership—especially the C-suite—is not just a bigger version of the last job. It’s a fundamentally different job.

At the executive level, the work shifts. Decisions become less about optimization and more about trade-offs. Success is no longer measured by departmental performance, but by enterprise-wide outcomes. Leaders must think across silos, manage competing priorities, balance the needs of a variety of stakeholders, and make decisions with incomplete information—often under pressure and scrutiny.

The question isn’t whether Jim is smart or capable. It’s whether he’s been exposed to the realities of executive leadership before being promoted.

• Has he had visibility into how major strategic decisions are made?
• Has he been accountable for outcomes outside his functional area?
• Has he led through disruption, uncertainty, or conflict at the organizational level?
• Has he been given real decision-making authority—or just more responsibility without autonomy?

Without exposure to executive-level work—governance, strategy, cross-functional risk, financial trade-offs—internal succession can feel safe while quietly increasing organizational risk.

This is where many companies get tripped up.

They assume that time served equals readiness. Or that intelligence will automatically translate upward. Or that leaders will “figure it out” once they’re in the role.

Sometimes they do. Often, they don’t.

And when they struggle, the cost isn’t just personal—it’s organizational. Decision bottlenecks form. Strategic initiatives stall. Confidence erodes. Things start to be whispered after meetings. It looks like “Jim” has failed, when in fact, he wasn’t prepared to succeed.

Internal promotion should never be about rewarding the past. It should be about preparing for the future.

That preparation doesn’t require a massive corporate structure. But it does require intention. Stretch assignments. Cross-functional exposure and responsibility. Ownership of outcomes.

Opportunities to think, decide, and lead at a higher level before the title changes.

Hiring a senior leader from outside your organization is risky. And so is promoting an internal candidate, if you failed to prepare them.

And that’s a risk every privately held company can control—if they choose to.

By Nanette Miner, Ed.D.

Keywords: Entrepreneurship, HR, Leadership

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