The Peter Principle: To Promote From Within or Not?


Regardless of what size your organization is, your future success is based not only on your people - but on your ability to put the right people in the right positions.

Not to be all dramatic and scary, but your choices regarding which of your team members are in charge of particular tasks and responsibilities are Critical.

Capital “C” type Critical.

Why Promoting From Within is a Wonderful Thing - or Not

Promoting from within a wonderful thing, right?

And so is being promoted, wouldn’t you say?

I mean, that sounds nice. It’s a happy story we’d all like to be a part of. But it often doesn’t work out quite so rosy.

The real-world truth of the matter is promoting someone from within could be the best decision you ever made for your organization - and it could also be a very damaging decision.

A Familiar But Dangerous Story

We all know a person who has been with their employer for years. They started in some entry-level position, did well, and moved up the ladder.

They parked in the right spot, they were always on time, they worked hard, and everyone loved having them on the team. Naturally, at some point this person got promoted as a result of their good work and good citizenship. Maybe they got promoted several times.

That sounds like a great story so far, doesn’t it? I’d agree.

But at some point during the climb up the corporate ladder, some people ascend a rung or two above their maximum efficiency potential.

For instance, A great salesperson is promoted to sales manager and unfortunately learns that they don’t possess the management skills necessary to lead a team. Or maybe they don’t have the analytical skills to deal with all the new reporting and tracking that’s required as a sales manager.

When that happens, you wind up with a frustrated sales manager, salespeople who aren’t getting the leadership they need to succeed, and clients who aren’t having the stellar experience they should be having as a result.

And when that happens, the whole organization loses. It literally hurts everyone in the process.

This same scenario plays out every day in organizations big and small all across the globe.

Imagine the lost time and revenue. Not to mention the likely loss of a perfectly good (if not rock star) employee that the organization will likely lose because they promoted them into a position they weren’t cut out for.

It’s a Principle, Peter

This phenomenon is rampant - and it’s not a new problem. It’s been around since the birth of… well, business itself.

It’s called The Peter Principle. There have been many books written about it, but the most noteworthy is “The Peter Principle” written by sociologist Dr. Laurence J. Peter in 1968.

The Peter Principle refers to an all too familiar scenario where a good employee is promoted on merit until they’re “over-promoted” to the level of their incompetence.

One of my takeaways from this book is that employees who are put in a position they can’t excel at are really the victims.

Dr. Peter pointed out that an employee's inability to skillfully execute the requirements of a given position that he is promoted to may not be because that person in incompetent in a general sense as much as it is that the position requires different skills than those the employee actually possesses.

I love Dr. Peter’s much more accurate albeit less cheery take on the old adage, "The cream rises to the top."

He suggested that in organizations that don’t take extreme care to promote, train, and coach properly that the saying ought to be, "The cream rises until it sours."

The bottom line: The Peter Principle is a failure of upper management. The folks who promote employees to their level of incompetence.

But why does this seem to happen so often?

Three Reasons We Promote Poorly

There are many reasons why people fall victim to The Peter Principle, but I find that there are three main categories that you can easily identify when you see it happening.

Those are: Simplicity, Familiarity, and Lack of Knowledge

Let’s face it, promoting Jim - our 10 year veteran super salesman who everyone loves into a sales management role is a lot easier than the alternative. You’d have to run ads, sift through resumes, conduct dozens of phone and in person interviews, check references - and then evaluate and compare the best candidates.

Let’s be honest. That’s a lot of work. And a huge time suck.

So grabbing Jim who sits right over there and promoting him is easy. Call it lazy if you want. I won’t argue. We like Jim. He’s been successful and he can start tomorrow without having to ride out a two week notice.

Speaking of Jim, there’s another reason it might be tempting to tap him for this promotion. Everyone already knows him and how he works. Not to mention the fact that he already knows all the people internally, our clients, and our suppliers. That’s even more stuff we (the hiring authorities) won’t have to facilitate or train! This is starting to sound really attractive.

Lack of Recruiting and Training Expertise:
If we go outside the company, not only will we have to have a formal process in place (that we all have a level of expertise in) to recruit, interview and hire outsiders - but once we make a decision we have to train them.

That means we need to be able to on-board someone, facilitate internal introductions, client introductions and vendor introductions. Then there are the facility tours. And we have to train the newbie on policies and procedures, company culture, product, reporting, software, and… man, that’s really a lot of work. This is hard.

You know what? Jim already knows all that stuff. Bam! Congratulations, Jim. Done deal.

So Jim is offered the job. He’s flattered, so he accepts it, and off we go. Jim is left to succeed or fail based on ease, familiarity, and lack of recruiting and training expertise.

You see, we’ve evaluated his aptitude for this position based on two things:

  1. His proven skill set and citizenship in a different position that may or may not require the same skills and talents as the position he’s being promoted to.

  2. Our convenience.

All too often, this scenario winds up with Jim being miserable, his reports being frustrated (or quitting), the company culture going to hell, and the company losing out on untold numbers of clients and revenue as a result.

That’s not fair to Jim, and it’s not good for the organization.


How to Avoid The Peter Principle

As with most things in business and life, the way to avoid this ugly scenario rests on the shoulders of leadership.

Leaders have to resist the draw of ease, familiarity, and lack of recruiting/training expertise - and do the work.

Overcoming the first two, ease and familiarity, is just a matter of mindset and being conscious of the fact that they’re a temptation that may throw you off.

You have to adopt the position of, “Yes. We know Jim. He’s a great employee and certainly a good candidate, but being our best salesman and being a manager are different. Let’s evaluate him just as we would an external candidate and see where it takes us.”

As for overcoming a lack of recruiting and training expertise, that’s going to be a little more work. If you don’t have a formal HR department, it’s going to require some elbow grease and research on your part.

You’ll need to:

  • Define what your recruiting process will look like (phone interviews, email interviews, in person interviews, panel interviews etc.)

  • Decide who will be a part of the interview process and what their roles will be

  • Create standardized interview questions for each step of the process

  • Devise a standardized on-boarding process

  • Create a formal training program (timeline, topics, order, participants)

...and then you have to execute it.

Yes, I know. That’s quite a list. But as the leader of the organization, it’s on you to make these things happen - and the future state of your organization will be MUCH better for having worked these processes out.

If this all looks like too much and you’d like a little help, a quick trip to Google will provide you with a slew of folks who specialize in doing this type of work. Or you can contact me here if you’d like me to help you get things in order.

You’ll Find Yourself Knowing Instead of Guessing

Once you have a quality process in place, you may find out that your internal person really is the best candidate.

The difference is that you’ve not left that employee’s future or your organization’s future to chance. Instead of rolling the dice, you’ve proven to yourself that your choice of internal or external candidate was a good one.

And that is worth any additional work.

Have you worked with (or for) someone who’s a victim of The Peter Principle?

Have you ever learned your lesson the hard way and put someone in a position they weren’t ready for?

Share your experiences and stories!

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