On the flip side, companies tend to hire management for outside perspective; especially in my field, data engineering, companies build up but get to a point where no one internal knows how to proceed properly and so are better off hiring externally.
I agree that doing so can be a mistake, but at times it's necessary, and likely less of a risk than promoting internally.
Does no one know how to proceed properly or are existing management just not willing to listen to the rank and file?
I'm watching this happen right now as a third party. The C-suite have brought in a bunch of expensive contractors who run perennially late and have done nothing but regurgitate generic flavour of the month blog posts rather than engaging with the people involved in the process that have actual experience of what's going wrong.
At my own place there are no outside contractors but again the people who actually do the work know exactly what could be done to improve the company's processes, getting anyone in management to listen is like pulling teeth.
Believe me, I've been in your shoes multiple times. I suppose I've resolved that instead of being frustrated as I have been in previous roles, I should simply take advantage of it and be aware of those biases if the situation arises for me.
I agree that doing so can be a mistake, but at times it's necessary, and likely less of a risk than promoting internally.