I promoted my warehouse manager to VP of Operations despite zero executive experience because I stopped writing job descriptions around credentials and started writing them around problems to solve.
Here's the rule that made it work: Every internal role opening had to include a "Skills Translation Guide" that mapped what we actually needed to what people were already doing. When we needed someone to oversee our 140,000 sq ft facility expansion, the traditional hire would've been someone with a construction management degree. Instead, I looked at what the role actually required: coordinating multiple vendors, managing timelines under pressure, and making quick decisions when things went sideways. My warehouse manager had been doing exactly that for three years, just with different stakeholders.
The breakthrough was forcing hiring managers to list five specific situations the person would face in their first 90 days, then asking which current employees had handled similar situations anywhere in the company. Our customer service lead became our first marketplace partnerships manager at Fulfill.com because she'd spent two years translating frustrated brand owners' complaints into operational fixes. That's the same skill as managing 3PL relationships, just from a different angle.
The mistake most companies make is treating internal mobility like a favor to employees rather than a competitive advantage. When I scaled my fulfillment company to $10M, roughly 60% of our leadership team came from internal promotions where we'd recognized adjacent skills. These people ramped faster, understood our culture, and had credibility with the team that no external hire could match.
The real test: If you can't explain to a current employee why they weren't considered for a role using specific skills they lack rather than credentials they don't have, your process is broken. Skills-based hiring isn't about being nice to internal candidates. It's about recognizing that someone who's solved similar problems in a different context will outperform someone with a perfect resume every single time.