The Peter Principle was introduced by Dr Lawrence J Peter in 1969. This presentation revisits the relevancy of this Principle in today's world and discusses how one can avoid the dangers of being caught at the "point of incompetence".
Good evening.I hope you like that self-made animation clip that introduces the topic of discussion today: The Peter Principle.
The Peter Principle came from a 1969 book by this guy called Dr Lawrence Peter, who made the observation of managerial work in organization.Despite the aged book, it is still one of the more popular books around.In fact, the most recent edition is 2011.The only the problem I have with the book is that the writing style is a bit old, and while it is not difficult to read, it may not be everyone’s cup of tea.So that’s my job today. I’ll spare everyone’s agony by distilling the key concepts in my presentation today.
Let’s start with what Peter says…
The Peter Principle simply states that:“Employees tend to rise to their level of incompetence.”Stating it another way, it’s saying that:“Employees tend to be given increasing authority until they cannot continue to work competently.”
In the book, there are plenty of references on the organizational hierarchy.The principle holds that in a hierarchy, members are promoted so long as they work competently.
But there comes a point when the promotion stops, which is when the point of incompetence is reached.And at this point the person will remain, unable to earn further promotions.
In time, every post tends to be occupied by an employee who is incompetent to carry out its duties.Work is accomplished by those employees who have not yet reached their level of incompetence.
I probably know what some of you are thinking.Either you are vehemently against this principle as it sounds a lot like crap.Or that you choose to ignore or be totally clueless about it, dismissing it as just an interesting thought conceived by a crazy AngMoh trying to sell his book.What do I think about it? What is the implication for us?
First I think that INCOMPETENCE is a very strong word.And who is this guy called Peter to call us incompetent?! Does he even know what we do for a living?As I read the book, the thing that came to mind is the Peter Principle true?Or just an amusing explanation of human behaviour?After all, the way that the author wrote it in a tongue-in-cheek way and it was a documentation of his keen observations of the corporate world.
Then in 2001, there is this Stanford Professor who asked the same question and conducted a research on this.He concluded that for promoted individuals, “For promoted individuals, the expected ability falls from period to period.” That is to say that the expected ability does fall over time.He even wrote a formula to predict the fall in ability after promotion.
In my view, the Peter Principle is a generalised principle. It is not a law or management theory.But I believe that it holds important lessons for us.
And it is also a timely reminder to check on ourselves;To take stock, reflect and take a long hard look at ourselves.
So let’s first talk about promotion.I know this is a sensitive subject, and depending on what is your state of mind now, you could be happy, sad or indifferent.
For the uninitiated, how do people get promoted in our Firm?Well, thank goodness our bosses don’t have to resort to scissors-paper-stone for promotion.
Other than the usual technical knowledge and experience, what we look in people are:AttitudePassionEnergyExecutionAnd the ability to make hard decisions at the right time.
But as you know, sometimes a person is promoted when he/she is not quite “ready” because there is a potential.To give him/her the time to grow into the new role.
So looking back, maybe we can ask ourselves why we were promoted?And why are we are where you are today?Compared to then, what is your attitude now?Your passion?Your energy?Your ability to execute and make hard decisions?
I think the danger comes when things become routine and cosy.If I can just do the same old thing every year, work a bit harder to meet the targets, and I should be OK.
So how do we avoid the Peter Principle?The answer depends on whether you see the glass as half empty or half full.
Let me offer 3 simple steps to be a better manager.When I say “manager” I really mean all of us who are in some kind of managerial or supervisory capacity of a business unit, big or small.
Step 1: Obviously, we have to first understand our role as a manager and leader.The question is do we really know what is our role?
What exactly does a manager do?Like what Harold Geneen wrote in his book, “Managers must manage.”But still the meaning is not clear. Manage? Manage what?
To many of us, to “Manage” means to do the work, supervise staff, manage our clients…and don’t complain.Or is it more than that?If we really look hard into what we as managers do, there are a multitude of roles that we need to do…Perhaps at varying degrees depending on where we sit on the hierarchy. It’s quite scary isn’t it?
Let me in on the hard truth…Managing and leading may not be our natural attribute. Sure, some of us may have the benefit of having a early start in leadership during our school days or national service, but that again doesn't necessarily mean that we may be good in managing or leading now.And conversely, a person who has no past managerial or leadership experience may not necessarily be not good.
We can attend management courses and be trained.But at the end of the day is practice, and keep on reading, learning and doing.
Step 2: Determine what to do or change
So looking at the required or expected level of performance and having understood your roles and responsibilities, how can you be a better manager today?Surely, you have to change something.How do you become better at “managing”?
Let me ask you another question…Are you busy? Is anyone not busy in our Firm?We are all busy because it is almost unthinkable in this Firm not to be busy. We even pride ourselves to be busy. We even greet each other in terms of busy-ness!
I think we are infected with the Busy Virus.Seriously, being busy is a bad disease in today’s work envrironment.Becoming busier every day does not make us better managers.If we are so busy with our work, then how to do we have time to think about and implement change?
So let’s kill the busy virus in us and instead channel our energies to doing things right and doing things better.Here are 3 world-class companies. What do they have in common?I’m not sure if you have heard of Google’s 70-20-10 rule, the 3M 15% rule or Lego’s 90/10 rule.Each of these companies require their employees to devote some time every week to work on innovative projects or ideas for their future. They understand that the success lies in the future and there must be concerted energy and effort to drive their companies to succeed in the longer term.Have we made time to energise ourselves, to make time to learn to do new things, to innovate, to do things differently?
Let’s see how we can possibly use Google’s 70-20-10 rule to manage our career.The circle here represents the time we spend at work. Most of us spent like 50 hours per week on work.So applying Google 70.20.10 rule…
How then to decide what to do on the 20% or 10% of your time?Stephen Covey reminds us to Put the end in mind in his 7 Habits of Highly Effective People book.Dina Dublon, ex-CFO of JPMorgan, and sits on boards of Accenture, PepsiCo, Microsoft, is now a Harvard professor.She reminds us to be demanding of ourselves and our bosses.
Step 3: Just do it.I think most of us know our own weaknesses but the question is whether if we take the steps to address it.
We have to look into the mirror and ask ourselves if we are getting better; otherwise, we’re just getting worse. Nothing stays the same.
So, doing “nothing” is not a solution. When I say “nothing” I mean not doing anything to change status quo. Doing “nothing” is absolutely perfect way to obsolete yourself.
And for some of us who take great pride in being busy, the ability to break off the old habits is even more critical to success.In your busy-ness, how do you find time to do the “first things first”?It is through prioritisation that we can be more effective.And with effective delegation, we can achieve more. And finally, if you do not empower your staff to do things, they’ll never truly learn.Of course empowerment requires trust, coaching and letting go.
In conclusion, I think it’s a choice at the end of the day.We can choose to ignore or accept the fact that Peter Principle exists.We can choose to think we are good at where we are and what we do.Or we can choose to think we have much more to do and improve ourselves and how we manage and run our business units.
Wherever you are, and whatever you do, I urge you to beware of the Peter Principle:…Of the fact that by doing nothing or doing the same old way (SOW), you are already on the way to incompetence and obsolescence.So before I end, I’d like to leave you with a quote which I recently found on my Facebook news feed…the only person that you should try to be better that is the person you were YESTERDAY.
And with this I thank you!
The Peter Principle Revisited: What it means to you and me