In our careers most of us aspire to go up the corporate ladder (with varying degrees of zeal), but most wishing for greater responsibility, autonomy and visibility.  So I was surprised when in a recent discussion with my father he told me about the Peter Principle which says that everyone eventually gets promoted to their level of incompetence.  Taken to its logical conclusion it means that in steady-state every non front-line employee, i.e. every manager, is incompetent.  Great.  Glad I’m a manager.

Even worse is the consulting industry where I used to work that has an “up or out” policy.  The policy states that if you aren’t promoted to the next level after a predetermined time period you must leave the firm.  Taken with the Peter Principle, the up-or-out policy effectively guarantees incompetence of all managers!  This will come as no surprise to some consultants that have worked for some questionable partners.

So, is the Peter Principle really true?  In my experience, yes.

However, that doesn’t mean one shouldn’t strive for promotions.  If people didn’t strive for higher roles there wouldn’t be progress and indeed the up-or-out policy has the upside of making room for junior staff to grow and growing the firm overall. 

But the Peter Principle does suggest that new managers are often ineffective in their new role and take time to adjust and learn the ropes.  In my experience it takes a full year to learn a new job and in the second year you’ll be good but make at least one or two major mistakes.  Provided management can grant you leeway on these mistakes you’ll recover and likely be an excellent manager in the subsequent three years.

At this five year mark, however, senior management should not automatically assume this person is ready for the next level.  Rather a conversation is warranted on what the managers really wants to do as a happy effective junior manager is far more useful than a stressed-out ineffective senior manager as the manager’s state of mind filters down to their team.

Conversely, similar to my post on knowing your strengths and weaknesses, every manager should learn, over time, their ideal level of responsibility.  This is hard to gauge without failing at some level of authority.  After all without failing how would you know when you’re operating beyond your means or in a role you don’t like?  A more sobering realization is when you observe peers who you feel are so far ahead of you that you won’t catch up. 

As they say in basketball, “no pain no gain”, and so too it is with being a manager.   Yes, you will fail at some levels but that’ll either expose you to a new role that you learn to excell at or teach you that you may not want to progress further in this line.  Either way, a good outcome and one that reaffirms that you need not always be gunning for the CEO job.

Epilogue

A good article on what the Peter Principle can teach us in Bloomberg.