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Why Management is Always Incompetant (In Theory)

        posted by , February 13, 2013

What's your level of incompetence?

The Peter Principle is a popular business theory introduced in a 1969 book of the same name.

According to the theory, most employees (and especially managers) are incompetent.

Definition: The Peter Principle

Many organizations promote employees because they do their jobs well.

If all employees are promoted when they do their jobs well and not promoted when they're incompetent — everyone eventually rises to the level of their incompetence.

According to the theory, employees who aren't incompetent will soon be promoted to a level where they will be.

How Accurate Is It?

The Peter Principle is more or less scientific.

If an organization promotes everyone the year that they become competent at their job, it can be shown (with a few assumptions) that everyone will quickly rise to their level of incompetence.

If an organization waits until a employee is competent enough for the next level before promoting them — the model breaks down.

In most organizations, there's a grain of truth to the Peter Principle.

Example: Peter Principle

Let's say a great programmer is rewarded with a promotion to management. Programming and management are completely different skills. There's a good chance that a good programmer will struggle with management.

Those programmers who become successful managers will be promoted to directors. Again, there's a good chance they'll struggle in their new roles.

Each programmer will be promoted until he/she is struggling with their job.

How To Avoid Incompetence

According to the Peter Principle, organizations that wish to avoid incompetence shouldn't promote people until they've already demonstrated competence in a new role.

Create Heroes in Every Profession

Many organizations have only one path up: management. In such organizations, top performers are pushed into management.

In other words, if you're a great computer programmer you're rewarded with a job that has nothing to do with programming.

Organizations wishing to avoid incompetence should create promotion-paths in every profession. For example, promote a skilled Programmer to Senior Programmer. Promote a skilled Senior Programmer to Architect etc...

It can be a mistake to put your top people in every profession into management.

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