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The Peter Principle – Let’s talk about it! Preventing the risk of failure in your organization

Updated: Mar 8

This morning, I woke up to a text message of a friend of mine. He shared this interesting article on the Peter Principle. Honestly, I have never come across this principle in the past and I was quiet intrigue to know more about the concept. As a lifelong learner and a professional in HR, it is important to do research and always be open to learn and share new things even if it does not make sense at first. The concept is funny; the reality, for those unfortunate enough to run into it, is not. It could certainty help one of you though. 

What is the Peter Principle?

In short, the Peter principle states that  “in a hierarchy, every employee tends to rise to his or her level of incompetence.” Sounds weird right? Yup, that’s why I needed to learn more about this theory. How could someone reach a level of incompetence within an organization? Well according to this principle, if you perform well in your job, you will likely be promoted to the next level of your organization's hierarchy. You will continue to rise up the ladder until you reach the point where you can no longer perform well. The key word the remember is “Hierarchy” (yes – corporate structure)! 

In 1969, a book (The Peter Principle) gives a new explanation for the incompetence in an organization: internal promotion! The Canadian author Laurence Peter explains the story of people who can no longer grow professionally! It is explained that an employee evolves… until he or she reaches his/her level of incompetence. I know it is dramatic, but keep reading to make sense of all of this. 

The author justifies this with two observations: 

  1. A competent employee will be promoted to a higher hierarchical level = We develop high-performing employees.

  2. An incompetent employee is not promoted or demoted = Non-performing employees remain in their positions.

In short, all the positions of an organization end up being filled by incompetent employees! That’s why, according to Laurence Peter, “why things always go wrong”. I know it’s not too optimistic. But I’m pretty sure you came to that realization as to why you always feel surrounded by incompetent people or maybe why you feel like you are incompetent (me included).

I even replied to my friend to know if he was victim of the Peter principle, to which he replied with a laughing emoji. I guess we are all in this together.

Let’s demystify this principle – or I should say observations! 

It has been found in research made by three professors of MIT, University of Minnesota and Yale on analysing the performance of 53 035 sales employees came to the conclusion that the best salespeople were more likely to a) be promoted and b) perform poorly as managers. The research found that “the most productive worker is not always the best candidate for manager, and yet firms are significantly more likely to promote top frontline sales workers into managerial positions. As a result, the performance of a new manager’s subordinates declines relatively more after the managerial position is filled by someone who was a strong salesperson prior to promotion.” 

Often, internal promotion has a «royal» way, all found, or even by default: management. In other words, to evolve, you have to become a manager. 

Among those who want to evolve, not everyone necessarily wants to become a manager. But if they have to choose between not evolving and evolving into a manager… well we know what many will choose.

We are not (not born) managers, we become them. It is developed and learned.

Notes, that this applies INTERNATIONNALY as well (for my Africans in the back, I know what you are thinking). From my little experience, I’ve came across people that held very high position in their respective organization and they were clearly incompetent (I like to think that I could have done their job better). 

What to do about it – Individual perspective!

You may want to avoid getting promoted. I know y’all are coming for my throat but please let me explain. One of the greatest pieces of self-awareness is the knowledge that management, whatever its perks, might not be worth the burdens it will impose on you. For example, I am a great contributor to the team cohesion, strategic thinking and community outreach. I’ve also had small roles where I had to manage other people, but I was not too successful at it (I mean I can still learn some tools and be better at it, but I am fully aware that at the moment it is not for me). 

In addition to being rarely accompanied, taking a new position is often underestimated in terms resources to be allocated to support and monitor the process, and the time required to upgrade skills and obtain initial results,

If you’re a top whatever in your new field (insert any position title here) newly promoted, get humble and collaborative fast. Start by taking each member of your team to coffee and asking somewhere in the conversation, “How can I best support you in my new role?” Then write it down. Then do it. Simple right? Just do it!

You need help with the transition. 

Prepare yourself. Ask for help, guidance and advices. Listen to your peers who have been doing it for years.

If a top colleague from your team just became your new boss, it might be time to move on. All jokes aside, you may want to think about your next steps if you are not comfortable in this team. 

What to do about it – Organization perspective!

Objectify the competence. What makes competence in the company and in the different functions? It is necessary to define what competence is in order to be able to evaluate it (from the moment of recruitment), measure it, and develop it. Yes, the company must be competent in competence management!

Think about all the different ways to facilitate mobility. There is not one way to the top. There are always several ways to help your employee evolve and grow professionally:

  • in the same position, by enriching the scope and/or empowerment (accountability/empowerment/transversality);

  • by adding specific functions to a position as project manager, technical reference, facilitation, etc.;

  • by cross-functional mobility (or assignment), moving to a different position on a similar level of responsibility, and/or in another entity;

  • by vertical mobility: evolution towards a different position on a higher level of responsibility (technical, managerial, commercial, etc.).

Support internal mobility… yup as an organization you should support your employees by create space to learn, mentorship programs, trainings, individual coaching, workshops, etc. You know the drill!! Don’t forget to consider exit doors to facilitate the transition of employees that want to leave if they wish. Your organisation is not a golden prison. 

Keys takeaways - Luckily, there are ways to prevent employees from falling into the Peter Principle trap. They include demoting without stigmatizing, offering higher pay without promotion, and working with alert employees (This means working with a team of people who know the extent of their capabilities and skills.)


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