There’s a promotion pattern that plays out in businesses of every size, in every industry, all over the world. And it almost always ends the same way.
Your best salesperson is consistently crushing their numbers. Quarter after quarter, they’re at the top of the board. So you do what any reasonable business owner would do — you reward them. You promote them to sales manager.
And then something strange happens. The person who was genuinely excellent at their job is now doing a completely different job. Instead of selling, they’re managing schedules, running performance reviews, dealing with HR issues, and sitting in meetings. Their reward for being great at sales? Doing almost no sales.
You lose twice. You pay them more, and they produce less.
The psychologist Laurence Peter identified this pattern in 1969 and gave it a name that has stuck for a reason: the Peter Principle. People, he observed, tend to get promoted to their level of incompetence. We take them out of what they’re genuinely excellent at and put them in something entirely different — something they weren’t hired for, weren’t trained for, and often don’t even enjoy.
Most businesses have been doing this for decades and calling it career development.
There is a better way. And the best companies have been using it for years.
Coaches vs. Mentors: Knowing the Difference
Before we get into the how, it’s worth being precise about what we’re actually building — because “coaching” and “mentorship” get used interchangeably, and they’re not the same thing.
Coaches help employees apply the company’s standards and perform their jobs better. Coaching is, at its core, an investment in company performance.
Mentors help employees achieve more in their careers. Mentorship is, at its core, an investment in the employee.
At senior leadership levels, that distinction starts to blur. The best way a CEO develops their company is often the same as the best way they develop as a person — self-leadership is the foundation of organizational leadership. But for most roles, the distinction holds. And knowing which one you’re building tells you who runs it, what success looks like, and how you measure it.
One more thing before we get into the mechanics: sometimes the most valuable coaching and mentorship you’ll ever receive comes from outside your organization entirely. It’s hard to read the label when you’re inside the jar. An outside coach or mentor carries no political baggage, no relationship history, and no agenda. They just see what’s true. Build the in-house program — but don’t let it replace outside perspectives entirely. The two work best in combination.
Part One: Building Your Coaching Program
The Right Alternative to the Wrong Promotion
Instead of promoting your best salesperson into management, make them a coach.
As a coach, they don’t manage schedules. They don’t do performance reviews. They don’t deal with HR paperwork or sit in budget meetings. They do one thing: they help the rest of the team sell better — which was probably the whole point of the promotion in the first place.
This is what I call “who” leverage: taking your best people and using them to raise the performance of everyone around them. Without removing them from the thing they’re actually good at.
The key insight here is that great coaches don’t just share knowledge — they transfer it. And being great at a job doesn’t automatically make you great at teaching it. The best basketball players aren’t always the best coaches. Your job, when you formalize a coaching role, is to develop both dimensions: the skill and the ability to transmit it.
How It Works Across Five Roles
Here’s how to identify the best, teach them to coach, and measure whether it’s working — across five common business roles.
Sales
Your best salesperson has figured out something the others haven’t. Maybe it’s how they open a call. Maybe it’s how they handle objections or how they think about rejection. That knowledge lives almost entirely inside their head, and it’s enormously valuable sitting there — and exponentially more valuable once it’s been transferred to the rest of the team.
Finding the best is straightforward: it’s whoever closes most, consistently. Not the person who had one great quarter — the one who is reliably at the top, across different conditions and different clients.
Teaching them to coach is harder, because skilled salespeople often do things instinctively they’ve never had to articulate. The coaching development process is about helping them reverse-engineer their own performance. Have them shadow junior reps and narrate what they notice. Review recorded calls together. Ask them to explain not just what they did, but why it worked. Within a few weeks, they’ll have language for things that were previously just instinct — and that language is what they’ll use to coach others.
Measuring the 3-month test: track close rates across the reps they’re coaching before and after. If a rep goes from a 15% close rate to a 20% close rate, your sales coach has generated measurable, attributable value. Run the math — we’ll come back to the ROI question in a moment.
Developers and Coders
Your best developer isn’t just technically skilled — they make better architectural decisions, write cleaner code, debug faster, and ask the right questions before they start building. That judgment is what’s worth transferring.
Finding the best means looking beyond raw output volume. Who writes code that doesn’t break six months down the road? Who flags problems before they become crises? Who do other developers go to when they’re stuck on something difficult?
Teaching them to coach means shifting the instinct from “let me fix it” to “walk me through your thinking before you try to fix it.” The skill being coached isn’t primarily syntax — it’s problem decomposition and professional judgment under ambiguity.
Measuring the outcome: track code review cycles, bug rates in production, and how often junior developers come back with the same category of mistake. A good development coach should reduce repetitive errors meaningfully within a quarter.
Customer Service
Your best customer service rep is probably the one who de-escalates difficult situations without making the customer feel managed. That’s a subtle, high-value skill — and unlike many people assume, it is absolutely teachable.
Finding the best: look at resolution rates, repeat complaint rates, and customer satisfaction scores if you track them. Also, ask the customers directly. They’ll tell you who they trust and who they want to deal with.
Teaching them to coach: role-play is the single most effective method here. Run through difficult scenarios. Have the coach observe live interactions and debrief immediately afterward. Focus specifically on the moments of tension — what exactly did they say, why did it work, what would they do differently if they could replay it?
Measuring the outcome: track escalation rates and average resolution time before and after. If coached reps are resolving issues faster with fewer escalations, the program is working.
Project Managers
Your best project manager hits deadlines without burning the team out. That sounds simple, but it’s one of the rarer skills in most workplaces. Most project management capability is a combination of expectation-setting, early risk-detection, and clear communication — none of which is formally taught in most organizations.
Finding the best means looking at on-time delivery rates and, just as importantly, team feedback. The best project managers are the people other people genuinely want to work with. That’s a meaningful signal.
Teaching them to coach: focus on pre-mortems — helping other project managers think through what could go wrong before it does, rather than diagnosing afterward why it did. Build shared checklists based on past failures. Have the coach run brief weekly reviews where their role is to ask questions, not give directions.
Measuring the outcome: on-time delivery rates and team satisfaction scores, tracked across the coaching period.
Finance and Analysts
Your best analyst or finance person doesn’t just report numbers — they know which numbers actually matter for decisions, and they communicate that clearly to people who don’t live in spreadsheets. That translation skill is genuinely rare and disproportionately valuable.
Finding the best: who gets invited into strategic conversations? Whose analysis actually changes the decisions being made?
Teaching them to coach: the core skill is learning to lead with the “so what” rather than just the “what.” Have the coach sit with junior analysts monthly, reviewing not just the accuracy of their work but the clarity of the insight they’re surfacing.
Measuring the outcome: look at whether leadership is making faster, better-informed decisions — and whether the analysis being produced is being used, not just received and filed.
The ROI Test — Don’t Skip This
Before you formalize any coaching role, you need to run the numbers.
If your best salesperson is generating $30,000 a month in revenue and you pull them off the floor for 10 hours a week to coach, you’re potentially giving up around $7,500 a month in direct sales activity. That coaching program needs to produce at least that much in incremental value — from the improvement it generates in the reps being coached — to justify the trade.
Most of the time, it does. One rep who goes from a 15% to a 25% close rate often generates far more incremental revenue than the coach’s foregone sales. But you have to measure it. Don’t assume.
Set your baseline before the 3-month test begins. Track the relevant metrics throughout. Review the numbers honestly at the end. If the program isn’t generating a return, the problem is almost always one of three things: you picked the wrong coach, you haven’t invested in teaching them to transfer their skills, or the time commitment is structured badly. All three are fixable — but only if you’re paying attention to the data.
Connecting Coaching to Your Company College
In a previous episode, we talked about building a company college — using online courses, drip learning, gamification, and AI to systematize your internal training. [LINK: Company College episode] Your coaching program and your college are a natural pair, not parallel tracks.
Online courses handle the foundational knowledge — the processes, the standards, the baseline competencies. Your coaches then handle the application layer: watching that knowledge get used in real situations and providing real-time correction.
Drip learning can prepare a new hire for their first coaching session, so the coach isn’t starting from scratch re-explaining fundamentals every time.
Gamification and progress tracking can surface coaching outcomes — skill badges, certifications, performance leaderboards — in a way that motivates both the coach and the employees being coached.
AI tools can record and review coaching sessions, flag patterns you might miss (“your coaching conversations are heavily focused on objection handling — is that where the biggest performance gap actually is?”), and surface insights from call recordings or project data faster than any human review process can.
The college delivers the curriculum. The coaches deliver the application. Together, they close the gap between knowing and doing — which is where most training programs fall apart.
Part Two: Building Your Mentorship Program
Coaching is about performance. Mentorship is about potential.
In companies where people build long careers — law firms, accounting firms, hospitals, architecture practices, established technology companies — mentorship is consistently one of the primary reasons people stay. Not compensation packages. Not perks. The sense that someone is genuinely invested in where they’re going, not just what they’re producing right now.
Here’s what’s at stake on both sides.
For the company: employee engagement goes up. Your best people start looking for a path forward inside your organization instead of responding to the recruiters in their inbox. And it’s always the best people — the ones with the most options — who leave first when they don’t see growth ahead. Mentorship is retention strategy, and it’s far cheaper than the cost of replacing a high-performer.
For the employee: the value is enormous. They stop reacting to their workday and start managing a career. They see the path forward. They understand what they need to develop to get there. They handle interpersonal conflict and high-pressure situations better — not because they’ve been in therapy, but because they’ve been thinking more clearly about where they’re going and what actually matters.
And even if they eventually do leave — they leave with significantly better feelings about your company. Many of them come back as clients, partners, or collaborators. Some start their own businesses that become referral partners or future acquisition targets. The relationship doesn’t end; it changes form. That has real long-term value.
This is not therapy, and it’s not just coffee chats with a senior leader. It’s architecture. You’re helping someone design the structure of their professional life, with the support of someone who has already navigated the territory.
How to Set It Up
Step one: identify your mentors. Look for your most respected senior leaders — not just the most senior by title, but the ones who have genuinely navigated the challenges your high-potential employees are heading into next. The best mentors are people whose careers others aspire to, and who have the self-awareness to reflect on how they got there.
Step two: teach them how to mentor. This is the step most programs skip, and it’s why most programs underperform. Being great at your job doesn’t make you a great mentor automatically. Great mentors ask more questions than they answer. They resist the instinct to just tell people what to do. They hold space for the mentee to figure things out, rather than shortcutting to the answer.
A useful framework for mentor training is GROW: Goal, Reality, Options, Will. It gives mentors a simple structure for a productive one-hour conversation — where are you trying to get, where are you now, what options exist, and what are you willing to commit to. It takes about half a day to train, it works across virtually every context, and it immediately improves the quality of mentoring conversations.
Step three: build small cohorts. Assign each mentor three to five high-potential employees. Schedule one dedicated hour per person per month. That’s three to five hours a month per mentor — a manageable investment for a senior leader when it’s framed as a genuine contribution to the company’s future leadership pipeline, not just another calendar obligation.
Prepare your mentees too. Before each session, have them send a brief written update: what they’re working on, what decisions they’re facing, where they’re feeling stuck or uncertain. The mentor reviews it and comes prepared to ask questions. When both people arrive prepared, the hour is almost always well spent.
Two Examples of What This Looks Like in Practice
A Regional Law Firm
Picture a 60-person regional law firm where the partners are in their 50s and the firm has several talented junior associates who are starting to get calls from larger firms in Toronto. Institutional knowledge — about clients, about business development, about how to navigate complex situations — is almost entirely locked inside senior heads with no clear path to transfer.
The managing partner identifies four partners willing to mentor: two known for business development, two known for legal excellence. Each is paired with three associates. They meet monthly for 45 minutes.
The agenda is owned by the associate — a current case challenge, a client relationship they’re trying to build, something they’re genuinely stuck on. The partner doesn’t review their files or supervise their work; that’s not the job. The partner asks questions. What have you tried? What’s your read on the client? What would you do if no one senior was watching?
Eighteen months in, associate turnover drops significantly. Two of the mentored associates step into business development roles that bring in new clients. The firm’s institutional knowledge — siloed in senior heads for decades — begins to move. Two mentees eventually make partner years ahead of the firm’s historical average.
The program didn’t just retain good people. It rebuilt the firm’s leadership pipeline.
A Healthcare Technology Company
A 120-person health tech company is growing fast. The CEO has too many direct reports and three high-performing VPs who are struggling with the transition from managing small teams to leading full departments. The skills that earned them their promotions don’t fully apply at the level they’re now operating at.
The CEO begins by pairing each VP with an external executive coach for 90 days — addressing the “can’t read the label” problem first with a perspective that comes from outside the organization. Then she transitions them into an internal peer mentorship structure: the three VPs meet monthly to think through leadership challenges together, with the CEO facilitating a quarterly group session.
The peer structure is deliberately non-hierarchical. They’re not teaching each other — they’re thinking out loud together. What decisions are they wrestling with? What’s the hardest conversation they’re avoiding? What does success look like for each of them in two years?
Within six months, the CEO notices a meaningful drop in the number of decisions being escalated to her. The VPs are resolving lateral problems that previously landed on her desk. One VP who had been struggling with a chronic conflict between her team and the sales department cracks the problem almost entirely through peer mentorship — because one of the other VPs had navigated an identical dynamic the prior year and knew exactly what had worked.
The mentorship program didn’t just develop three VPs. It built the leadership infrastructure the company needed to keep scaling without the CEO becoming the bottleneck.
The Bottom Line
Coaches develop your people’s ability to perform. Mentors develop your people’s ability to build careers. Both are investments. Both generate measurable returns. And both are things most companies leave almost entirely to chance.
The businesses that build this deliberately — that identify their best, teach them to transfer what they know, and create structured space for that transfer to happen — are the ones that retain top talent, improve performance across the entire team, and build institutional knowledge that doesn’t walk out the door when someone quits.
Promoting your best people is exactly the right instinct. The mistake isn’t the promotion — it’s promoting them into something that makes them worse. There’s a version of every great performer’s career where they stay great, spread that greatness to everyone around them, and build something together that none of them could have built alone.
That version starts with building your bench deliberately.
Chris Cooper is the host of BusinessIsGood, a podcast for Canadian small business owners. New episodes at businessisgood.com.
Website – https://businessisgood.com/
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