Getting below the competence ceiling

I have hired a few people, so I know that a fantastic person in one position can be a disaster in another. And I am not just talking about Parkinsons Law either, which tells us that a person will be promoted just past his (or her) competence level. That, by the way, is one reason many companies perform better after a crisis. The competent people who were prompted past their level of competence are demoted - and suddenly competent again.
In companies (and countries) with automatic promotion by seniority, you automatically get to the next career stage as you age. Since there is no way there can be enough positions of authority in a hierarchy for everyone as they age together (unless the population increases exponentially), there has to be some filter, otherwise companies and government bureaus would be full of people who are automatically promoted to manager but have nothing to manage. Come to think of it, I may have seen that happen.
This is of course a problem in terms of waste, both of taxpayer or shareholder money, but mostly in terms of human potential. All those people could be doing something to create value, instead of sitting around by the windows waiting for retirement.
One of the problems in big companies is that the organization determines the people needed, not the other way around. That is, when you hire people, you try to hire those that can do the jobs you have right now. This is good for the customers, since their problems are being solved effectively. But it is bad for business in the long run, since you are creating an organization that is very good at, and focused on, solving one type of problems, and one type only. If you give them a different type of problem, they have to change their routines. That costs, at least in time. So if you are in a business which has become a race to the bottom, perhaps due to competition from low-cost countries, you risk being stuck with your rudders pointing downward and your engine going at full speed.
Which means that if your company wants to get into a different business, there has to be some slack. Either you try to create new business areas that can take over when you hit the bottom, or your top managers try to bypass the business creation by buying a company that has already started to be succesful in a different niche. They can also try to create new business by allowing "skunk works" or 10% projects" like 3M and Google.
If they try to create new business without involving the current employees, you should not have to think very long about how that feels. Here you are, the most successful division in the company, and the management just want to squeeze out more so they can buy random companies. You do not have to think very hard about what it feels like. People with half a brain will figure out what is going on and start to leave before they are fired. You do not have to be a manager to read the tea leaves, and see that this is a company that does not care about you, only the cog in the wheel that you represent.
If the company cares, they will create innovation contests and give the winners access to skunkworks. They will give employees project time to do work on their own, as long as it benefits the company and is cleared with management. That shows that they want to keep the people even as the company gets into a new business. And it does something else as well. It gives them a place to move people who used to be great, but are no longer performing. A demotion will both look and feel like a promotion, especially if salaries do not change.
Look around in your company. What do you see?