From the Vault: Have You Re-discovered The Peter Principle?

Adam Vaccaro posted an excellent article on the Inc. Website entitled, “High Performance Is Not the Same as High Potential.” Click here to read it. This distinction was the topic of a wonderful book written by Laurence Peter and Raymond Hull in 1969 entitled, “The Peter Principle: Why Things Always Go Wrong.” Peter observed that companies that base promotions on performance in the current job create a system in which all managers eventually rise to their level of incompetence. Click here to read a synopsis.

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The solution to this dilemma begins with the insight that the job of supervisor, for instance, requires a different set of talents and skills than the job of an individual performer. To give a specific example, the role of sales manager requires different talents and skills than does the role of sales representative. But, as Peter observed, it’s the number one sales rep who gets promoted to sales manager. Often – sadly, very often in the world of sales – the newly promoted individual is not a good manager. The company suffers a double whammy. They’ve taken their best sales rep off the playing field AND they’ve given the team a poor manager. This is not a formula for increasing sales.

Whether it’s sales or any other type of role, we all know people who’ve been “Peter Principled”. This creates a huge amount of stress for the individual, because he’s trying to do something for which he doesn’t have the fundamental aptitude to excel. He’s been promoted into a job for which he’s not a good fit. This situation generates a huge amount of stress, which leads to burn out and numerous other health problems. It’s not good for the company, it’s not good for the customers and it’s not good for the person.

Therefore, as Vaccaro points out, we must look beyond performance in the current role and assess potential for excellence in the new role. Once you start focusing on potential you’re looking through a different lens, and something really interesting happens. You’ll notice that some employees who are not stars in their current role have the potential to be stars as leaders. They’re better coaches than players. Vaccaro gives some research-based behaviors to look for in assessing leadership potential.

However, the issue of cultural fit is crucial. We need to assess leadership potential in a much more specific way. As you know, every organization culture is different. A leadership style that’s a natural fit for one culture might not work well in a different culture. Which is a better business decision? 1) identify individuals who have high potential for leadership excellence AND who must make major changes to their leadership style in order to thrive in your culture, or 2) identify individuals who have high potential for leadership excellence AND whose leadership style is a natural fit for your culture?

There are well-known, scientific methodologies for studying the character traits and natural behaviors of top performing leaders in a specific organization (yours, for instance). By definition, these people thrive as leaders in your culture. Such a study will result in a benchmark you can use to assess the potential of both internal and external candidates. This kind of scientific study is the Gold Standard for succession planning.

This discussion brings to light a more fundamental issue in our society. It seems to me there’s a widely-held point of view that if one is not getting promoted something is wrong. We need to eradicate this perception. This causes people to seek promotions for the wrong reasons, and attain roles that are not a good fit. They’re driven to seek the Peter Principle. We need to ensure that people don’t need a promotion to feel truly valued and significant.

In considering people for promotion, shift from focusing on performance to focusing on potential. Make sure candidates have the potential to excel in the new role. When someone’s in the right fit, they’re spending most of their time doing things they’re good at and enjoy. They’re energized by their job, not oppressed by it. Everybody wins.

Thanks to Beth Bruss for suggesting this topic.

And thanks for reading. As always, I’m interested in your thoughts.

Larry Sternberg
lsternberg@talentplus.com

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