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The Peter Principle: Why the World Is Full of Incompetence

Quick! Think of a person in a leadership position you consider hopelessly incompetent. Got one? Of course, you have. Mine goes by the name of Mr Generic. You’ve probably met someone just like him. He wasn’t always like that, though. Mr Generic succumbed to the Peter Principle. It’s the idea that, in a hierarchy, every employee rises to his or her level of incompetence. How does it come to this? And most importantly, how can we avoid it?

A Peter Principle Case Study

The Peter Principle dates back to the 1960s. It was then, in his early days of being a teacher, when it dawned on Laurence J. Peter: Not just his school, every organisation employed a sizable number of people who had no clue what they were doing. His curiosity was sparked and he began to investigate this phenomenon.

In 1969, Peter and co-author Raymond Hull published The Peter Principle: Why Things Always Go Wrong. Studying hierarchical structures, collecting and evaluating hundreds of case studies from a broad range of fields, they showed how employees make their way up the career ladder – until they fail. The rise and fall of our Mr Generic is a perfect illustration of such a tale.

The Rise of Mr Generic

Mr Generic is a delight. He’s a project manager at a public company that does some kind of prestigiously pointless work. Mr Generic is a good listener and always friendly to everyone. What’s more, our model employee works very hard and never questions directions from his supervisor. He finishes his projects on time and never causes any trouble whatsoever. That makes him incredibly easy to manage. He’s such a nice guy, it’s impossible not to like Mr Generic. Seriously, everyone loves him.

One day, a supervisor position becomes vacant. Mr Generic’s manager moves up to senior management and there is no doubt in the company’s collective mind that our likeable protagonist is the perfect successor. Mr Generic becomes the new middle manager and oversees the projects of half a dozen employees. Will his well-meaning character be corrupted? Of course not. Mr Generic stays true to himself, which will be his downfall and that of anyone he is responsible for.

The Fall of Mr Generic

Soon after his promotion, one of his employees is asked to fix a problem by another department manager. Mr Generic ensures her that this is unreasonable and it is not hers to fix. At the same time, he sincerely apologises to the other department for the mistake and vows to correct it himself. It takes him half a day to fix a problem that wasn’t his team’s in the first place.

Every now and then, the client gives Mr Generic a call, yells at him and makes unreasonable demands. Mr Generic’s strategy is to apologise and give the client what she wants. It works every time. Until the client calls again with even bigger demands.

Mr Generic has a similar positive relationship with senior management. He carefully listens to suggestions from his team and takes them up the chain. Strangely enough, though, his voice is seldom heard and his suggestions never considered. But that’s okay, he completely understands and reassures his team that they are doing fabulous work either way.

The Fate of Mr Generic

You may have guessed it at this point. Mr Generic is a people-pleaser who has deeply rooted difficulties with uttering a two-letter word ending on ‘o’. He’s unable to stand up for himself, which makes him unable to stand up for his employees. There’s a good chance the world of his team is soon going to turn into a delightful slice of hell. Performance is already deteriorating.

Senior management sees no need to act. What monster would fire Mr Generic? He’s such a nice guy and so easy to manage. But unfortunately, Mr Generic lacks the skill set needed to be an effective manager. The once-celebrated project lead has become an incompetent supervisor. Senior management is reluctant to consider him for a higher position.

The Peter Principle Dynamic

What happened? Our hapless protagonist was promoted based on his achievements in his previous roles. Mr Generic was genuinely good at what he did. This prompted his inevitable rise in the hierarchy until he ended up in a position whose demands exceeded his competence. It was so far outside his zone of proximal development that there was no hope he’d ever catch up and be promoted again.

The Peter Principle Endgame

For Mr Generic, climbing the career ladder ended with the first promotion. How are his colleagues doing? According to Peter and Hull, this is bound to happen with every employee. A worker’s last promotion will always be from a level of competence to one of incompetence. It doesn’t only apply to obscure public companies either. The authors found the Peter Principle to be universal to all hierarchies. Whether they exist in government, business, the military, schools, universities or any other type of organisation.

The leader you had in mind earlier may have been a great teacher. But an awful principal. They may have been a fantastic football player. But an awful captain or coach (unless they’re called Jürgen Klopp, of course). Others may be gifted mechanics or terrific parliamentarians. But terrible foremen and ministers.

You can probably tell where this is going. Granted there are enough ranks in the hierarchy of an organisation, Peter’s Corollary says:

In time, every post tends to be occupied by an employee who is incompetent to carry out his or her duties.

Even if we consider the CEO of a company who has turned out to be competent at each and every level. What are the chances the chief will not be head-hunted or drawn to the next bigger challenge in a different place? A place where she’ll eventually face the iron law of Peter. Besides, how competent will her successor be at her old place of work?

Implications for Productivity

Given the inevitability of the Peter Principle, you might ask: If that’s all true, how can organisations even be productive? Peter has got this covered, too:

Work is accomplished by those employees who have not yet reached their level of incompetence.

In other words, what keeps an organisation together are those who still know what they’re doing. Because they haven’t been put into the awkward position where their skill set can no longer keep up with their tasks – yet. Just like Mr Generic did fabulous work while he was still a project manager.

It seems like the Peter Principle is mainly driven by our human proclivity to grow and develop. That’s all good until we run into our limitations. Sometimes we don’t even notice we’re out of our depth until it’s too late. Other times we do notice our limits but pretend they can be dealt with or don’t exist. I seems like this is essentially the field of tension we have to deal with when trying to avoid succumbing to the Peter Principle.

How to Avoid the Peter Principle

I think we have ignored the elephant in the room long enough. If the Peter Principle is universal and inevitable, it applies to everyone, including ourselves. We don’t want to end up in a pointless job that’s destroying our souls. Especially if we’re good at what we do and think our expertise should be reflected in where we are on the career ladder. So the question is: How can we prevent being promoted to a position of ineptitude?

Abandoning Common Sense

I reckon the common-sense solution would look something like this. We do an honest and accurate SWOT analysis of our skills and career goals, which will help us determine any professional development needs. As we rise in the hierarchy we’re fully aware of our limitations. If the demands and responsibilities of an offered position exceed our abilities, we decline the promotion. If we have already taken the new job and realise we’re out of our depth, we step down.

This of course is an approach as laudable as it is foolish and misguided. Sure, we could just say ‘No’ and avoid falling into the incompetence trap. However, according to the authors of the Peter Principle, the so-called Peter’s Parry is almost always a losing strategy. Refusing to be promoted is only practical for those of us who are able to withstand immense social pressure. Only if you don’t have family or friends can you afford to not live up to the full potential others see in you.

Let me explain. If you enjoy a vivid social life declining a promotion is likely the beginning of a positive feedback loop. It leads to judgement, ridicule, conflict and your inevitable destruction. The authors warn us: Don’t be like Mr Loman whose life fell apart quickly after the news of him turning down a promotion spread like a wildfire. It fell on his son to defend his dad’s honour, which in turn led to him losing his teeth in a school fight. What was good news for local lawyers and dentists ruined the family financially.

Things can go south really fast if you refuse to level up. There’s a better way. Thankfully, the Peter Principle devotes a whole chapter to a much better strategy.

Cultivating Creative Incompetence

The solution to all this is something Peter calls Creative Incompetence. Since you should not refuse to rise up the hierarchy, the winning strategy is to be competent in secret. What can I say, it’s an art form in and of itself. The key is to choose your ineptitude strategically, to cultivate it in a crucial yet innocent part of your expertise. A part that does not stain your reputation as an excellent employee, but prevents your boss from considering you for a promotion:

The method boils down to this: create the impression that you have already reached your level of incompetence. […]

Creative Incompetence will achieve best results if you choose an area of incompetence which does not directly hinder you in carrying out the main duties of your present position.

If Mr Generic had just regularly worn his Peppa Pig tie to work or kept mistaking stakeholders for celebrities. He could’ve happily stayed where he was. Upon reviewing the case studies of successful creatively incompetent workers, Peter concludes:

One thing was clear: these employees had avoided advancement, not by refusing promotion—we have already seen how disastrous that can be—but by contriving never to be offered a promotion!

Eureka!

This is an infallible way to avoid the ultimate promotion; this is the key to health and happiness at work and in private life; this is Creative Incompetence.

It certainly is counterintuitive. Failure is ultimately measured by you being offered a job you can’t handle. If you find yourself in a well-paid position of incompetence, your days are counted. You better make a lateral move and start over again.

The Peter Principle Aftermath

At this point, I should probably point out that the Peter Principle was intended as satire. Nevertheless, it struck a nerve with employers and researchers alike.

In Promotions and Declining Productivity, Edward P. Lazear notes the lack of incentive after a promotion, which can lead to a decline in productivity.[1] There’s also a statistical expectation for people to perform worse after they level up. After all, it takes time to get accustomed to a new role and find your bearings. Even though companies sometimes account for this regression by raising standards, the effect never fully disappears.

The latest research from 2018 suggests that the Peter Principle is in fact a real phenomenon, for example in sales.[2] If you’re an exceptional salesperson, you’re more likely to be promoted. Though, the trade-off tends to be a decline in sales after you took over your own team. Interestingly enough, firms tend to accept this downside in favour of the message it sends to employees: If you sell well, you get promoted.

On a final note, the Peter Principle inspired a further management concept that you may find relatable. The Dilbert Principle was invented by Scott Adams, creator of the Dilbert Comics. Adam’s hypothesised that, instead of firing inept staff, organisations tended to promote them to management positions in order to keep things running:[3]

Leadership is nature’s way of removing morons from the productive flow.

As for our Mr Generic, there was still too much essential business he could screw up in his supervisory position. Perhaps that’s why they made him the head of Comms.

Closing Thoughts

What would you do if you realised your strengths are about to become your liabilities? Pretend that you know what you’re doing? Or pretend you don’t know what you’re doing? If we can learn anything from the Peter Principle it is that real professional success lies in not having to make that decision.

Despite, or perhaps because, of their satirical nature, Peter and Hull’s ideas are a rare instructive guide on workplace politics. The Peter Principle addresses those unwritten rules about playing the games of status, authority, hard and soft power. As such it goes beyond mainstream career advice on how to figure out what game is being played and then play it better than everyone else.

In doing so, they opened up a new, secret hierarchy of success with your key performance indicator being to strategically avoid promotion. It looks like it takes courage, integrity, wit and willpower to not end up in a position in which you’re of no use to anyone including yourself.