Get New Ideas by Email. Join 3k+ Readers.

The Peter Principle: How to Overcome the Perils of Promotions

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 incompetent, though. He began as a skilled and motivated employee. As time passed, something changed. Mr Generic succumbed to the Peter Principle, a fate that awaits those who promoted one time too many. Can this happen to us? And if it does, how can we overcome the Peter Principle? Before we go down the rabbit hole of the infamous concept, let’s first take a look at what the rule says before diving into the case study of Mr Generic.

What Is the Peter Principle?

The Peter Principle states that “in a hierarchy, every employee tends to rise to his level of incompetence.” The semi-satirical concept dates back to the 1960s. It was then, in his early days of being a teacher, that it dawned on Laurence J. Peter: It’s not just his own school. Every organisation employed a sizable number of people who had no clue of what they were doing. The sociologist’s curiosity was sparked and so he began to investigate this phenomenon.

In 1969, Peter and co-author Raymond Hull published The Peter Principle: Why Things Always Go Wrong. They began to study hierarchical structures and evaluated hundreds of case studies from many industries. The results demonstrated how employees make their way up the career ladder. Until they fail due to being promoted beyond the peak of their abilities. As we’re going to find out later, Peter and Hull came up with clever ways to avoid this trap.

A Peter Principle Case Study

Let’s dive into a case study first. The rise and fall of our Mr Generic is a perfect illustration of the Peter Principle.

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 by another department manager to fix a problem. 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 rarely heard and his suggestions are 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 Dynamics Behind the Peter Principle

What happened? Our hapless protagonist was promoted based on his achievements in his previous roles. Mr Generic was genuinely great 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 his 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; in government, business, the military, schools or universities.

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. As long as there are enough ranks to be filled in an organisation, Peter’s Corollary applies:

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

That’s a bleak outlook. If we widen our view beyond a single company, we could even argue that this applies to a CEO who has turned out to be competent at each and every level. What are the chances she won’t 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. Remember, Mr Generic did fabulous work while he was still a project manager. So it seems like the Peter Principle is mainly driven by our human proclivity to grow and develop.

Growth is 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. Essentially this seems to be the tension we have to deal with when trying to avoid such toxic promotions.

How to Overcome 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. Nobody wants to end up in a pointless job that’s destroying their 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 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.

It’s a laudable approach. Albeit a foolish and misguided one. Sure, we could decline a position. However, according to Peter, this leads to unintended negative consequences. 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. They even gave this ill-fated strategy a name: Peter’s Parry.

The Problem with Peter’s Parry

Peter’s Parry is almost always a losing strategy. 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.

Mr Loman’s life fell apart quickly after the news of his turning down a promotion spread like wildfire. It fell on his son to defend his dad’s honour, which led to him losing his teeth in a school fight. What was good news for local lawyers and dentists ruined the family financially.

So beware: Things can go south really fast if you refuse to level up. But do not be disheartened. There’s a better way. Thankfully, the Peter Principle devotes a whole chapter to a much better strategy. The solution to our predicament of forced promotion is something Peter and Hull call Creative Incompetence.

Cultivating Creative Incompetence

Since you should not refuse to rise up the hierarchy, the winning strategy is to be competent in secret. To master the art of indirection and deception in the workplace, the key is to choose your ineptitude strategically. The authors explain:

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.

In other words, cultivate creative incompetence in a crucial yet innocent aspect of your expertise. It must not stain your reputation as an excellent employee. But prevent your boss from considering you for a promotion. If only Mr Generic had just regularly worn his Peppa Pig tie to stakeholder meetings. Or kept mistaking clients for celebrities. He could’ve happily stayed where he was. Peter and Hull reviewed case studies of the most successful creatively incompetent employees. They conclude:

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 may sound counterintuitive. But in the world of the Peter Principle, failure is ultimately measured by your being offered a job you can’t handle. If you find yourself in a well-paid position of incompetence, your days are numbered. So you better make a lateral move and start over again.

Real-Life Application of the Peter Principle

At this point, I should probably reiterate 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. Statistically, employees are also expected 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. 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, companies 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. Adams hypothesised that, instead of firing inept staff, organisations tended to promote them to management positions to keep things running: “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.

Peter and Hull’s ideas are a rare instructive guide on workplace politics and survival. We might even see it as a precursor to the scientific study of bullshit. The Peter Principle addresses those unwritten rules about playing the games of status, hard and soft power. As such, it goes beyond mainstream career advice on figuring out what game is being played and then playing it better than everyone else.

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