The Peter Principle

Next time you’re having a beer with friends, ask them about their boss. There’s a 75% chance they’ll start to complain without a moment’s hesitation. And for good reason – most managers are more incompetent than Michael Scott on LSD.

I know, I know – this is a harsh statement and it might hurt some people’s feelings (I’ll try not to cry myself to sleep over it), but it’s true. Studies show around 75% of people say their immediate supervisor is the most stressful part of their job.

Let that sink in – the stressed-out cashier at your local supermarket is likely more stressed out because of her manager than the soccer mom who just yelled at her over an expired coupon.

But why is this happening? Is it that only incompetent jerks climb to the top? Or is there something else afoot? The answer might lie in a little piece of satire called “The Peter Principle“.

What is the Peter Principle?

The Peter Principle is an observation that in any hierarchy, people rise to the level of their incompetence. In other words, people get promoted until they can no longer do their job well.

The principle was first observed by Canadian sociologist Dr. Lawrence J. Peter in his 1968 satirical book aptly named, ‘The Peter Principle: Why Things Always Go Wrong “.

While the book (co-written by Raymond Hull) is supposed to be satire, the intuitive nature of the principle allowed it to penetrate the mainstream in a very serious way.

Since then, this phenomenon of modern workplace dynamics has boggled the minds of scholars, HR reps, managers, business owners,  and employees, alike.

According to Dr. Peter, every position in a hierarchy will sooner or later be filled by someone incompetent for that position. Considering the current hiring and promotion practices all over the world, this should come as no surprise. Sadly, little has changed on that front over the past 50 years.  

I can already hear a herd of managers scoffing at their screens because they, of course, are the exception (and they might be right). This is a natural reaction. Few people would question their own competence. Fewer still would come to the conclusion they’re not very good at what they do.

But the Peter Principle is very real. Studies are clear about it. No amount of scoffing and denial will change that. To make matters worse, the higher in the hierarchy you go, the more accurate it seems to be.

The good news is the Peter Principle is not inevitable. However, we first need to understand how it works in order to counteract it.

How does the Peter Principle work?

The Peter Principle is not difficult to explain. In fact, most of us understand it intuitively.

Let’s say we have two employees – Alex and Blake. Alex is a great employee in their current position and shows no managerial potential whatsoever. Blake is good, but their performance falls short of Alex’s. Yet Blake is also the unofficial leader around – everyone comes to them for advice.

In a typical company, come promotion time, Alex will get promoted and Blake will not. It makes sense, right? Alex is better than Blake at their job. And while Blake does show much more managerial potential and leadership skills, this matters little when the decision about the promotion is being made.

I’ve seen this play out time and again – the result is always the same. The idea behind this line of thinking is that if Alex does a better job at their current position, they’ll also be the better manager. They deserve it. They’ve earned it. 

All of this is horseshit. Just because someone is a good programmer doesn’t mean they’ll be a good manager. Those two positions require an entirely different set of skills. So different, in fact, it would be like letting a dentist perform brain surgery.

What are the reasons behind the Peter Principle?

Pinpointing the exact reasons behind the Peter Principle is tricky. It’s a descriptive principle, meaning it merely observes a phenomenon without necessarily explaining it. After all, organizations are incredibly complex hierarchies.

There are many reasons why someone might be promoted over someone else – from competence to time served in the company. This is not even mentioning ass-kissing and nepotism. But you know me – I’m an ambitious fellow, so I’ll try to distill the concept and give you my take.

Management and leadership

Management and leadership are viewed as entirely separate positions in business. And management seems to be viewed as more important.

The difference between management and leadership is not immediately apparent. After all, managers are supposed to lead, right? Except this isn’t always the case. In fact, I’d argue it rarely is.

By promoting people who are not leaders, the management level of an organization gets filled with people who have no place there. They’re not good at creating value, they’re not good at making decisions, and they’re about as inspiring as an oil-stained wet cloth.

People do what managers ask because managers have power. “If I don’t do what my boss says, I’ll get fired”, is the driving principle behind management. And it sucks the life, joy, and energy out of everyone involved. No wonder only 13% of employees are engaged worldwide.

The truth is most managers are not good at managing. Only true leaders can inspire and engage employees so they give it their all. This problem will go away once we realize leadership and management are not separate. They’re the two sides of the same coin.

Leaders create value. Managers only count it. It’s much better to promote the person everyone already respects and goes for advice to, than the person who “does a good job”.

Risk management

Risk management is a huge contributing factor to the Peter Principle. Let’s get back to our previous example. If you’re the one making the decision, would you promote Alex or Blake? The correct choice would be Blake. But the safe choice would be Alex.

Think about it – if you promote Alex, it would be based on their current performance. No one would question the legitimacy of the decision. It makes perfect sense. Even if Alex does a bad job in their new position, it’s not your fault – there was no way you could’ve known.

What about Blake? If you decide to promote Blake, that’s a greater risk despite Blake showing more leadership potential. Because if Blake doesn’t do a good job in their new position, it’s on you. You decided to take a chance and it didn’t pan out. Your own competence would be in question. Most people simply wouldn’t take that chance.

It’s far easier to promote someone based on “objective data” than it is to identify employees who are management material and promote them.

Lack of training

Leadership is still widely underestimated. When you’re starting a new job in sales, marketing, IT (to name a few), you’re starting out as a trainee. And you stay a trainee until you can demonstrate at least some level of competence (or you get fired because you’re hopeless). Not with leadership positions, though. They’re considered a no-brainer.

Yet management is much more about soft skills than it is about “doing the job”. You may be a great salesperson and those same skills that help you with sales might be preventing you from being a great sales manager.

The problem is that leadership and soft skills can’t be measured. And in business, if it can’t be measured, it doesn’t exist (which is another pile of horseshit, but that’s a story for another day). So people make decisions based on what they can measure, leading them to promote the wrong people. Sprinkle a bit of risk management on top, and you have a perfect mix.

To make matters worse, these newly-minted managers receive little to no training. Or the training program is so laughably stupid, they’d be better off making it up as they go along.

All these reasons contribute to a workplace environment where people feel undervalued, unmotivated, and unproductive. I mean, it’s hard to be productive when you hate your boss’ guts. And even if your immediate supervisor is a good boss, their boss rarely is, which creates a heap of problems. But how do we solve them?

How to overcome the Peter Principle.

Writing this article has taken me more time than I care to admit. It was requested over a month ago, but I didn’t want to simply showcase the Peter Principle without coming up with solutions. So in the meantime, I’ve talked to several people who have or still work at large organizations and asked how they tackle these challenges.

None of the methods I’m about to present is a foolproof way to solve a complex problem like the Peter Principle, but they’re a step in the right direction.

Change promotion practices

Promoting people for doing a good job is stupid. Give them a raise, sure, but don’t promote them. I know it sounds counterintuitive, yet it’s a net loss.

Let’s say you promote your best salesperson to sales manager. Great, now they get more prestige and more money, but you need to find them a replacement. If it’s not another rockstar salesperson (and let’s face it – it probably won’t be), the overall efficiency of the department falls. Besides, as we’ve already established, your best salesperson would statistically do a bad job as a manager.

So whom should you promote? A competent person (but not your top performer), who is also showing interest in carrying more responsibility. They are eager to learn and they’re already trying to perform the duties they’d be in charge of after the promotion.

This way, you’ll already know if the person can handle the job before you promote them. On a side note, you’ll also see the dynamics within the team. If most people are OK with another employee carrying responsibilities without being a manager, he or she is probably well respected. And trust me – respect is crucial when it comes to leadership positions. You can’t buy it. You can only earn it.

Promote the person with the ideas. The one who’s trying to improve things for everyone and create a better work environment. The one who demonstrates creativity, intelligence, and learning ability. I know these things are hard to measure, but the other way isn’t working, anyway. Might as well try something else.

Create a leadership program

Some organizations even take the previous point a step further. After they identify management material employees, they offer candidates to go through a battery of tests to determine whether they possess the right qualities. Once the tests are done and the candidate passes, there’s a leadership program they can complete to hone their skills.

Even after going through all this, candidates are not guaranteed a promotion. There needs to be an opening first. When all the criteria are met, then the promotion takes place.

Obviously, this approach has problems of its own. First off, it only works for large organizations. Second, you run the risk of demotivating employees. Having gone through all the trouble and not getting promoted in the end will definitely cause some people to leave.

The upside is that you’ll have the right people in the right positions. They will rise to the level of their competence, not their incompetence. If they can’t keep growing in the organization, it will be because they don’t have what it takes for the next level, not because they’re bad in the current one.

Oh, and a quick caveat – make sure the program is effective and the people running it know what they’re doing. I’ve seen some pretty laughable “leadership academies” I wouldn’t trust as far as I could throw them.

Create an environment of growth

Create an environment that promotes growth instead of a fixed mindset. Most organizations focus solely on results and while results are important, they’re not the only thing that matters.

This type of thinking creates a fixed mindset and holds people back. Everyone is paralyzed by fear and no one takes any risks. This makes it very difficult to try something new. If you’re wondering why most organizations turn into mind-numbing bureaucracies as they grow, this is one of the reasons.

It’s also part of the reason why so many managers are incompetent. “I’m a manager, I should know this,” is what many of them think and they hide their lack of knowledge instead of improving. Their fixed mindset prevents them from getting better because they’re afraid they’ll be judged.

Instead, promote an environment of growth where failure is something to be appreciated, not feared. Of course, there’s nuance to this – I’m not saying, “Go wild on billion-dollar mistakes”. But I am saying, most failures can be used productively without people feeling like crap.

Then people will realize it’s OK to make mistakes, as long as these mistakes aren’t too costly and they can learn from the experience. Employees and managers alike will be OK with asking questions and trying to get better even when they’re not “quite there, yet”. In turn, everyone will feel empowered and look for ways to improve. This will eliminate the “risk management” factor of the Peter Principle.

All this can be supplemented with coaching practices. The whole point is to create an atmosphere of growth in the organization where everyone knows they can rise if they have what it takes. No one will feel like just another cog in the machine.

Conclusion

The Peter Principle is a joke without a punchline. It started off as satire, but it quickly permeated the membrane of the culture because it strikes so close to home.

While it explains the bulk of workplace problems, it’s not a final sentence. The Peter Principle is not inevitable and I do hope more organizations begin to recognize the utility of overcoming it.

Until then, have a cold one with your friends and crack some jokes at their boss’ expense.

Till next time. 

P.S. I’ve worked with some amazing managers over the years, but there is nothing they can do when upper management has been usurped by incompetent people with Machiavellian tendencies. Far too often, the inmates are running the asylum.

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4 Responses

  1. That was worth the read and the wait! “most of us understand it intuitively” – I did, but now I know the why and how behind it. Thank you!

  2. I like to think I fall somewhere in between. Ideas are wonderful, but getting boring and putting in the work is mandatory if you want to manage a team or a project, and get something done. Love the article though! <3

    • Agreed. There’s a balance we need to keep. But at the end of the day, it’s not just about work. It’s about direction, strategy, vision, inspiration, and leadership. Without them, no amount of work will lead to success. Thanks for the comment. 🙂

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