This one almost sounds like it’s written for Apocalypse World’s "fail forward" mechanic, but I rave enough about the PbtA system. So instead, I will talk about something that is anti-AW: doing away with XP and having milestone-based advancement.
I think this is done well in Fate, where advancement is essentially a matter of adding to your skills or approaches, recovering from consequences ("healing"), and changing your character’s aspects. In fact, the aspect development part of Fate is where the milestone-advancement shines. It is entirely possible to play an entire Fate campaign without changing your die rolls, but to instead advance who you are, rather than what you do or how well.
There was a moment in a D&D 4e campaign I was playing in a few years ago where the DM said "look, where I want you guys to go next is an epic-tier adventure. You kind of skipped past the stuff I had planned in the meantime, but I feel bad robbing you of 4 levels of adventure."
I shrugged and replied that, if the story is epic tier and he doesn’t want to scale it down, then he can just level us up. Our characters aren’t going to be surprised that we can now do all kinds of cool stuff we couldn’t do before. We certainly don’t need to spend 4 levels "grinding" on monsters that don’t move the story forward, after all.
By letting go of the burden of keeping things scaled to our power level, the DM was able to skip to a more interesting part of the story, the part he wanted to focus on. It’s not a video game, after all. We can skip over the boring stuff.