Sometime during early 2000, while scaling up our operations, I found a unique phenomenon affecting our organisation, GRASSIK. People who were proven performers were moved up and given additional responsibilities with larger teams. I found that most of those so promoted, started showing signs of failing in their performances, either at a personal level or as managers. Despite my best efforts at mentoring and guiding my top team, this was becoming something of a curse. The results were extremely surprising and foxing, with no credible answer.
Around 2007, I came across an article on Peter Principle and found the observation very intriguing & interesting. I read a lot on it and realised that, while there had been no research done to validate the veracity of the principle, the observation made by Dr. Laurence J. Peter & Raymond Hull and published in their book “The Peter Principle” in 1968 was actually at work within my company.
According to observations made in the Peter Principle, every employee, in an organizational hierarchy, will rise or get promoted to his or her level of incompetence. It is based on the notion that employees will get promoted as long as they are competent, but at some point will fail to get promoted beyond a certain job because it has become too challenging for them. Employees rise to their level of incompetence and stay there. Over time, every position in the hierarchy will be filled by someone who is not competent enough to carry out his or her new duties.
Dr Peter clarified that it was not necessarily incompetence of the employee in his new role. Every new role requires new competencies and skills, which an otherwise competent employee may not possess, hence the failure. He succulently sums up his observation as “the cream rises until it sours”.
While the Peter Principle remains a concept in management theory, and there has been no research done to support this observation, I have personally seen it at work within my own and many client organisations. Managers promoted sequentially over a period of time, do tend to rise to their “level of incompetence” till promotions are no longer possible.
This principle creates a catch-22 situation. Performers in any organisation expect growth, both in terms of role and responsibilities, else stagnation followed by churn sets in. With each subsequent promotion, an employee heads closer to his level of incompetence. Promotion that leads to a slide in performance has a collateral damage – loss of a previous good performer.