How to Overcome the Peter Principle

There are countless examples of competent individuals failing to deliver when promoted in their organization. You might read about how a company became an utter failure after a seemingly capable CEO took over or might have observed similar examples at your workplace. You might have even made entire presentations carved out of various PowerPoint templates during your days as a business administration student. An employee promoted in a hierarchical organization can face not being up to the challenge, and such a failure is due to the Peter Principle!

What is the Peter Principle?

The Peter Principle is a concept which argues that people who have success are promoted in hierarchical organizations until they reach a level of incompetence. This failure is the fact that their skills from the previous job no longer translate to their new role.

This concept was explained in detail in a book by Dr. Peter and Raymond Hull. The book came out in 1969 and was titled; The Peter Principle. Peter was a Canadian hierarchiologist, whereas Hull was a Canadian lecturer with a career as a playwright and television screenwriter. The book by Peter and Hull was originally meant to be satire. However, it became popular due to its accurate explanation of the failure of employees in hierarchical organizations. This gave rise to the concept of the Peter Principle, which since the book by Peter and Hull, has been the subject of various researches.

Example of the Peter Principle

To explain the Peter Principle, let’s take a look at an example. Joane is a sales representative who started her new job in January 2018. In a few months, she became an efficient sales rep and is among the top sales reps every quarter for a year. Based on her excellent track record, she was promoted as a sales manager in January 2019. Once Joane is promoted, she finds herself overwhelmed with the new task since she has no managerial experience. Furthermore, she finds it hard to plan and manage tasks, guide her sales team, and lack the know-how of using spreadsheets, sales management software, and data analysis tools to analyze sales data. Joane has suffered from the Peter Principle.

A study based on the Peter Principle, published in 2018, analyzed the performance of 53,035 sales employees from companies within the United States between 2005 to 2011. The research observed that during this time, 1,531 sales reps were promoted as sales managers. The researchers noticed that such promotions were inefficient promotion decisions with a wide range of repercussions for promoting sales reps to managers. Companies make such decisions without realizing that removing efficient sales reps can upset clients, and it can be hard to replace them. Furthermore, sales reps promoted to managerial positions might not have the required skills to manage the new role efficiently.

How to Overcome the Peter Principle?

Just because many people suffer from the Peter Principle does not mean that you can’t avoid it. There are several steps that you can take to prevent the curse of the Peter Principle!

Identify the Required Skills

You can’t expect to switch to a more demanding role without going through some training or preparation. If you’re eyeing a promotion, make sure you understand the required skills for the job and make your preparations to sharpen your skillset. You can undergo training, observe senior officials in the same role, and seek guidance from people who have been in a similar position for many years. Sometimes organizations offer opportunities for employees to undergo relevant training. However, you can also opt for online training courses or look for a training course that you can take after working hours.

Whether you have been handed over a new, more demanding role or you are expected to get one; you should look to identify required skills and make your preparations for the new job to avoid the Peter Principle from haunting you.

Test Your Abilities Against Required Skills

Say you’re a sales rep looking to become a sales manager someday. You can look to test the required skills by mentoring new employees, helping them manage their workload through advice and guidance and start using more advanced software that sales managers in your company use. This can help you learn how to manage teams and use more advanced software to perform data entry, analysis and make sales-related plans. You can also run simulations at home to prepare for this. People engaged in other professions can similarly test their skills. IT professionals often use simulation software to create virtual networks to test their abilities and identify pitfalls. Besides, reading about the subject, watching informative videos, and following industry leaders online can help you better understand the requirements and pitfalls of your new role in the organization.

Seek Help from a Mentor

Many people have mentors who help them at the start or throughout their careers. Seeking help from a mentor can help you gain insight from an experienced individual to deal with various issues that you might face in your new role. Such individual works in the same organization or even don’t have to have the same kind of role as you have been granted. Some people can be pretty helpful in understanding the organizational culture since they have the institutional memory to help you identify pitfalls and understand concepts that have worked for other employees in the past. A mentor can also be a subject matter expert in the field who can advise in line with history and recent trends to help you calibrate your plans.

Build a Team Before You Need it

In the example above we mentioned that you could mentor new employees to learn how to manage teams. This is also the point where you can earn the trust of some efficient employees and identify potential future subordinates. No manager can succeed in a hierarchical organization alone. As you are promoted to a new role, you will need an efficient team to help you along the way. Identifying efficient employees can help you create a strong team that can enable you to succeed at your new job and even accounts for some of your shortcomings.

Use Employee Performance Assessments

There is a lot of lobbying, politics, and petty issues that can overwhelm a new and inexperienced boss. You should make use of employee performance assessments to identify high performers and make use of them. Many people in newly acquired managerial roles can often fall into the trap of preferring inefficient employees who are good at obliging their bosses. This can eventually hurt your performance as a manager. You can seek guidance from HR or analyze performance-related data yourself to identify hard-working employees to ensure your team is solid and efficient.

Final Words

The Peter Principle is more common than many people realize. In recent years, especially after the global financial crisis of 2008, many companies collapsed on a worldwide scale. This included large multinational corporations like Lehman Brothers, Royal Bank of Scotland, and Alliance & Leicester, and companies that were once market leaders at the national level in various countries. The global financial crisis resulted in some bailouts for large corporations, while other companies were not lucky. It can be argued that since the financial crisis in 2008 and the subsequent jittery global economy, many organizations have found it hard to have the right leadership to steer them out of the crisis. We can argue that the Peter Principle is perhaps more relevant today than ever before, as complaints of inept leaders is rife, from MNCs to small and medium-sized enterprises.

It is not that hard to observe the Peter Principle in practice all around us. Perhaps the best example of the Peter Principle are government organizations that are often known to be inefficient due to red tape, bureaucratic procedures, weak politics, and incompetent employees. It is hard to think of a country where people might consider government offices more efficient than the private sector. Similarly, there is a growing trend of inefficiency in even private organizations that makes it harder for them to survive amidst a weak global economy. Research by The Center for Creative Leadership reports that 50% of leaders and managers are ineffective, incompetent, or wrongly hired for the position.

Similarly, the past two decades saw the failure rates of top executives of Fortune 500 companies at a staggering 75%. It is, therefore, necessary to consider the Peter Principle at the individual and organizational level to improve efficiency and the overall working environment. Incompetent bosses are often likely to create a toxic working environment that negatively impacts the organization, coworkers, and subordinates. To avoid the curse of the Peter Principle, it is best to keep your skillset sharp and watch out for opportunities to improve your understanding of how things work up the hierarchy to ensure you can have a smooth transition to a new, more demanding role.