The Peter Principle: Prophetic or preventable?

Friday, April 3, 2020 - 10:30
AIM Blog - The Peter Principle: Prophetic or preventable?

In 1969, Laurence J. Peter made the sweeping claim that “in a hierarchy every employee tends to rise to [their] level of incompetence.” This statement is known as The Peter Principle and if you presume that it is accurate, it suggests something quite dire: given enough time and promotions, every position in every organisation is filled by somebody incapable of fulfilling the parameters of their role.

The Peter Principle was so pervasive after its release that the Harvard Business Review felt it necessary to make two sincere responses to its publication:

  1. The first, titled “A Postscript to the Peter Principle”, argued that women, minorities, and other less privileged groups would be exempt from the rule as they would have to work harder than white men to receive equal recognition in the first place. Quite progressive for 1973, but it does importantly point out that this problem derives from the unworthy or inappropriate receiving promotions in the first place.
  2. The second came another few years later, in 1976, and was titled “The Real Peter Principle: Promotion to Pain”, in which they argue that incompetence isn’t the real issue. Instead, HBR puts forward the idea that employees are promoted until they reach a point where the stress and pressure of their work outweighs their ambition, explaining both their reduced effectiveness and why they don’t get promoted further.

While the original publication that this principle appeared in was a satire, many people recognised the kernel of truth about business hierarchies that this statement unveiled: the skills and behaviours that make a person worthy of promotion often have little-to-no value in the role that person is promoted into.

As an example, think about the work of a salesperson. It is highly individualistic, focuses entirely on the customer, and requires a certain unwillingness to compromise — all traits that can be detrimental for a manager to have. However, as a study of over 50,000 sales employees that ran from 2005 to 2011 discovered, it is the best sellers who repeatedly get promoted into sales manager positions and, proving Laurence J. Peter (perhaps accidentally) right so many years later, they universally tend to perform poorly as managers.

In essence, Peter stumbled upon an idea that contemporary leadership researchers have recently begun championing, which is that the functional excellence and individual technical contribution of leaders has far less value to their organisation than the soft skills needed to enable, encourage, and empower employees.

The functional excellence and individual technical contribution of leaders has far less value to their organisation than the soft skills needed to enable, encourage, and empower employees.

This makes the Peter Principle rather prescient as over the past half century work has generally become more specialised and knowledge based. Many jobs now require qualifications that previously didn’t, and the growing use and ubiquity of technology has created a need for specific technical expertise.

A software developer today, for instance, will quite likely have earned a tertiary qualification before their career begins and undertake further courses to learn specific new applications, techniques, and coding languages as they are developed. If they are ambitious, they will actively seek this further training, and if they are a high performer, the expectation is that they will be promoted as a reward for their efforts. With continued good work in a conventional hierarchy, this software developer would see their role shift from the technical contribution that earned them their promotion to a management position where the bulk of their effort now goes toward organising the other workers who report to them, a skill there is no reason to believe that this person has any strength in.

The Peter Principle is correct in that people are often promoted into roles they are not wholly capable of fulfilling. However, it is not an issue of innate incompetence; it is an issue of preparation. The attributes and skills that are needed in leadership don’t always have much value outside of management, so they aren’t prioritised for development and thus new leaders often find themselves out of their depth.

The change necessary is very clear: leadership training has to be incorporated alongside technical upskilling far earlier in the career development track.

Otherwise, organisations will find themselves with a lot of incompetent managers.