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Have you spoken to your boss or even your boss’s boss about how you feel? As a manager myself, I can attest that if a team member is performing well, I wouldn’t want to lose that person without a proper chance to make things right. I would also work extra hard to find opportunities to help the person grow so they feel valued. But sometimes it’s hard to know someone feels this way without having the direct conversation. Hope this helps.
Sounds to me like you dodged a bullet in what probably would have been a bad next move. If your boss and you have mutually understood that your growth is capped where you are, definitely start looking internally and externally — good luck hustling! You might hit a few dead ends along the way, but something will eventually work out.
Since you feel you're not growing, I would say start looking externally. Remember, job hunting is a long process. Often takes 3-6 months for many people, so you have time. If, during that time, a position at your company opens up, go for it. Otherwise, in the same time frame, another much better opportunity may be waiting for you, just externally.