In 1969 Laurence Peter and Raymond Hull conceived of the ‘Peter Principle’ in organisational science. Essentially, the principal hypothesises that members of a hierarchy are promoted until they reach the level at which they are no longer competent.
For example, the skills needed to perform a graduate job, are very different from the skills required to be successful in a corporate structure. Yet, the fallacy is that the better performers at the lower levels are rewarded with promotions, and there is an expectation that success will transfer through to the higher levels that demand different skills.
Eventually, organisations will have, as part of their executive, a number of leaders who are poor strategists, poor managers, who cannot see the big picture, who are set in their ways, and who seldom even recognise innovation, let alone deliver it. They end up defining their leadership role as a game of impression and persuasion whereby the only actual attribute that makes them at least appear generally competent is the accrued knowledge of their field. Thus, Peter and Hull gave us the phrase ‘promotion to the level of incompetence’.
So, what is behind ‘promotion to the level of incompetence’?
Here is the structure of the argument - organisations serve the needs of their clients, yes, but they also serve the needs of their employees, and we have preconceived expectations of how these needs are to be met.
Most people do not start working in their ‘dream jobs’ but simply find work that is best aligned to their set of skills, experiences, desires, and the opportunities available. The main motivation for entering the labour market is the desire for ‘success’, which for most means promotion in steps, all the way up to the corporate level. The whole career game can therefore be characterised as the desire to climb the corporate ladder.
Being at the top level comes with a grandiose status in society, and a feeling of power - the ability to express one’s own will - equipped with the ability to do this personally and socially by higher earnings. There is no need to determine how justified these desires are. It is simply who we are, and it is simply what most of us want. As philosophers like Thrasymachus and Hobbes tell us, we are fundamentally vain creatures.
In any case, the assumption is clear - the vast majority will start at the bottom and earn their promotions through merit, and the harder we all work the more entitled we are to this ‘success’.
So, despite being vain, we can at least be fair, and organisations aim to achieve this equity for their employees. Organisations therefore promise this ‘success’ when recruiting in order to attract talent. It is unfair to promote Person A over Person B for Position X if A has outperformed B. More importantly, the promotion of A must, for the sake of equity, occur whether or not B would actually be better at Position X. It just wouldn’t be right otherwise.
What are the assumptions around the “Peter Principal”?
For Peter and Hull, this assumption can lead to mistakes in promotion and recruitment. However, these mistakes are not necessarily the employers' fault. There are simply too many As and Bs in the organisation for employers to even discern their suitability for Position X. The only measure they have to go on is the performance of employees at their current level despite so many studies showing that most great leaders make poor low-level employees, and high performing employees often make poorer leaders (see Romaine, J. 2014).
Behind these assumptions and expectations is what the 20th century philosopher of science - Thomas Kuhn - called ‘paradigm’. This is a richer notion of what we loosely call ‘ways of thinking’. This not only involves our logic and assumptions but also our values, psychological dispositions, and sentimental attachments to what we consider to be ‘the right way’. We all think through paradigms, and breaking out of our respective paradigms involves a change so radical that it would be akin to a religious conversation. It simply doesn’t fit into our paradigm that Person B would be better at Position X, not despite being a poorer performer at their present position but because they are a poor performer at their present position. It seems odd for a senior employee to look at a poor performer at a more junior level and think ‘Well, if they’re not good at this level then they might be better at a higher level’.
What are the challenges around the Peter Principal?
The paradigm in question for us concerns organisational structure. You start at the bottom, and if you’re good enough you will end up (and deserve to be) at the top. But what if there were flaws in this paradigm? Here are some questions to ponder:
How many Managing Directors and Chiefs have cost their companies in poor decision-making, poor people management skills, poor vision, poor problem-solving, all because they themselves “deserved” to be there?
How many of these senior people know how to make good impressions but are in fact poor in executive roles?
More importantly, just how many potentially excellent leaders have our organisations cast away at the earlier stages because they weren’t great at pumping data by the hour, running the nuts and bolts of systems, running the small errands of their superiors?
The challenge to executives is twofold:
First, do you consider yourself a good leader? Evidence and feedback from INTOO and their coaching courses show just how much training executives need in order to effectively deliver change and transformation for their organisation. Every executive needs to ask themselves ‘Will I be good at this level simply because I was good at my lower-level or parallel role?’ It is a penetrating question, and an honest executive will find a good reason to answer ‘not necessarily’, and then will be able, through coaching and training, learn more about being a better leader. The skills are available if the executive is open to learn.
The second challenge to executives is how they identify ‘talent’ for senior positions. This is very hard because ‘talent’ alludes to competence at a certain level. My whole argument is trying to show that this competence at a junior level may be the very reason why a candidate may be a poorer candidate for promotion. Rather than identifying ‘talent’, why not be more specific and identify ‘leaders’. Break the paradigm, and instead ask ‘Person B isn’t that great, but I’m yet to determine whether they will be better at a senior position. How do we test this?’
Perhaps the challenge of acquiring effective leadership in organisations has been their promotion and recruitment paradigm, and Peter and Hull identified this. Is there room for us to identify the B’s in our firm and see whether they are actually better suited for a senior role? Should we invert Peter and Hull’s notion and advance ‘promotion to the level of competence?’
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