How to Avoid the Peter Principle in Your Business

How to Avoid the Peter Principle in Your Business

Promoting someone to their ‘level of incompetence,’ known as the Peter Principle, is way too common in organizations.

These ‘last promotions’ are damaging to the business and damaging to the individual. So how do you avoid making this common mistake?

The key to avoiding the Peter Principle is in understanding how the nature of work changes as one rises through the organizational hierarchy.

Before someone is promoted, give the individual the opportunity to demonstrate their ability to do the new work.

They may not be capable or they may not be interested, and either condition will lead to big problems in the future.

ActionCOACH’s Rick Phelps shares a simplified take on how the nature of work changes.

Hands-On Work

The bulk of the work in any organization is the hands-on work, be it meeting with patients as a doctor, installing wiring as an electrician, or running a machine as an operator.

This work may be very technically difficult, like that of an electrician, or simple and routine, as an operator or clerk.

Effective hands-on workers solve problems as they encounter them, working around the problem to get the job done.

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Diagnosis Work

First level managers’ work revolves around the analysis, diagnosis, and improvement of the existing systems the people doing the hands-on work are working within.

Before promoting someone to their first role as a manager, give them a project to understand, and improve an existing work system in the business.

The difference in the work is the difference between working around problems encountered, and identifying what issues in the current work system led to, or contributed to, the problem, and solving THOSE issues.

This work is about making sure the team has the proper equipment, tools, supplies, and information at their fingertips to successfully execute their work every time.

Systems Work

When someone is promoted from being a manager to being a ‘manager of managers,’ their work becomes focused on designing new systems or redesigning the existing work system, when those systems are not delivering the end results required.

Before promoting an individual to a department head and thus a manager of managers, assign them a project to reimagine an important system in the business.

It could be a procurement system, a quality system, a safety system – any business system that will enable them to demonstrate their ability to think in systems.

“The ability to think in systems is not related to education level – I have met people with advanced degrees who could not design a new system, and people with a GED that always thought in systems, not willing to simply address the immediate problems they encountered on the shop floor,” said Rick.

“Most of the Peter Principle victims I have met have failed at the transition to this level of the organization,” said Rick.

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The consequences of these failure can be devastating to the business over time. Examples include: maintenance managers who let the core maintenance systems deteriorate and not deliver the required reliability, and production managers who lets quality and safety systems fall into disuse and thus, damaged the business’s reputation.

The examples are endless, damning, and damaging. There are more levels of work, but this should give you an idea of what to do to avoid promoting people into jobs they cannot or will not do.

Rick Phelps coaches business owners and their leadership teams to create and sustain cultures and systems with the goal of providing spectacular results.

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