You can't have 5 people all leading a team. A good manager will give employees who want to lead an opportunity to do so in smaller ways, and when it comes time to figure out who gets promoted into a leadership role, being able to compare notes of how well each candidate went is essential.
Even for non-managerial roles, there may not be budget to promote everyone. Especially at larger companies where a promotion can be an extra 50k+ per year per employee, promoting all 5 people means there isn't budget to hire someone new, and those employees aren't suddenly working 20% more efficient thanks to a new title.
You can't have 5 people all leading a team. A good manager will give employees who want to lead an opportunity to do so in smaller ways, and when it comes time to figure out who gets promoted into a leadership role, being able to compare notes of how well each candidate went is essential.
Even for non-managerial roles, there may not be budget to promote everyone. Especially at larger companies where a promotion can be an extra 50k+ per year per employee, promoting all 5 people means there isn't budget to hire someone new, and those employees aren't suddenly working 20% more efficient thanks to a new title.