Circumventing the Peter Principle

In my research about leadership and what makes an effective leader, I run into theory upon theory about what makes a good leader. Are leaders born or made, or both? If leaders are made, what model of development is better? And the list goes on and on. For the sake of argument, let’s agree that leaders emerge, over time, with experience. This brings me to the Peter Principle, a concept developed by Laurence J. Peter, which asserts that in hierarchical organizations, people tend to rise to “a level of respective incompetence.” These people tend to be promoted not because they have proven they can do the higher level job but are promoted based on prior performance. This focus on prior achievement often hinders their success in the new role for several reasons:

1. Decision-Making Biases. We’re human. We have biases. Those biases creep into our decisions. Our background, experiences, education, and skills allow us to apply heuristics to make decisions quickly, but these shortcuts can result in biased outcomes. Here are a few biases to be aware of:

Dunning-Kruger bias emerges as one who overestimates their abilities.
Selective Observation bias is making a decision by having a glimpse of an individual’s work and often not seeing the whole picture.
Optimism bias in hiring or promoting is overestimating their probability of success.
Bounded Rationality biases occur when managers agree to settle for a candidate that is good enough rather than continuing to search for the best possible candidate. If the promoted candidate is not good enough, determine where the gap exists and how quickly or easily it can be closed.
Halo/Horns Effect is the tendency to allow one good or bad experience or trait to overshadow others in the decision process.
Idiosyncratic bias occurs when hiring managers evaluate a candidate’s skills as high when they’re not good at that skill. Conversely, they rate the candidate’s skills lower if they are great at that skill.

As you can see, this very short list is just a snapshot of the shortcuts that can lead to biases and,

2. Hiring managers are not clear on the skills needed for the job. Too much emphasis is either placed on finding someone better than or equal to the predecessor or altogether different from the predecessor.  Notice the focus on the predecessor and not the job?

3. Unclear job expectations and poorly written job descriptions. This is probably where the greatest focus should be and where the least attention is placed. If you don’t write job descriptions that address the skills needed to achieve goals, you might as well walk out the door and grab the next person you see to fill the job. There should be a skills matrix for every job that identifies the minimum technical skills (how much prior experience must a person have to hit the ground running), people skills (how much experience and what type of experience must a person have with engaging other people, building teams, influencing behavior, etc.) and conceptual and cognitive skills (decision-making, communication, strategic planning, analytical, etc.) needed to perform successfully and achieve organizational goals. All three of these skill sets, at a minimum, must be clearly understood by those making the hiring decision.

4. Too much emphasis on years of experience. Years of experience reflect only a number and not the breadth and depth of one’s experience. To gain insight into one’s breadth and depth, ask scenario-based questions. Remember, competencies convey know-what; scenario-based questions demonstrate know-how. The promoted candidate isn’t going to have all of the know-how, and that brings me to #5.

5. Lack of brick wall support. Expect to support the promoted leader with four things: a mentor, a coach, a therapist, and training. When they hit the wall of conscious incompetence, they’ll need support. Day one, help them find a mentor. Week one, help them find a coach. At 30-60-90-days, help them identify the training they need to close the gap. In six months, make sure they know how to use the EAP to obtain additional support. When a person hits the brick wall, they’re going to feel stressed, experience feelings of self-doubt, and feel demotivated. Without the proper support, they could disengage, quit, or worse, pretend they’ve got it all together – affecting them and you.

If the Peter Principle is occurring within the walls of your organization, acknowledge it and use this strategy to mitigate any negative impact on the individual and on the company.