You know the Peter Principle? Formulated by Lawrence J Peter in 1969 and almost 50 years later it’s still a terrifying revelation for many organisations. A veritable ticking time bomb, impacting productivity, profitability, talent management, customer satisfaction…and more.
A quick reminder of the principle: It states that the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities relevant to the intended role. Thus, employees only stop being promoted once they can no longer perform effectively, and “managers rise to the level of their incompetence”
At Corporate Drama we find typically this means leaders and managers who are technically excellent and yet have little or no people management experience.
In 2014 The Gallup Organisation’s Management & Leadership Survey of the world’s leading companies concluded that 82% of the time individuals were hired or promoted because of their technical capability rather than their ability to manage people.
The Gallup report concludes: “It’s important to note that another two in 10 people exhibit some characteristics of basic managerial talent and can function at a high level if their company invests in coaching and developmental plans for them. In studying managerial talent in supervisory roles compared with the general population, we find that organizations have learned how to slightly improve the odds of finding talented managers. Nearly one in five (18%) of those currently in management roles demonstrate a high level of talent for managing others, while another two in 10 show a basic talent for it. Combined, they contribute about 48% higher profit to their companies than average managers do.
What must it be like working for a leader or manager who fits the Peter Principal profile? Here’s our take:
- A preference for a transactional way of doing business, little or no focus on personalities
- The perception that individual’s strengths are limited to their level of technical expertise, little in the way of development unless it’s technically oriented
- No clarity on how to develop a high-performing team and to play to individual’s strengths
- A lack of clarity on the team’s objectives, or individual’s roles in achieving those objectives
- Almost certainly little face-to-face communication, preferring email or text instead
- No importance placed on developing the team’s relationships with internal and external stakeholders
- Probably communicates a silo-mentality rather than a wider, inclusive strategic vision
- Little reference to organisational values
- A low level of employee engagement and a high rate of role-churn
As the famous saying has it “People join companies, they leave managers”
Which raises another key aspect of the Peter Principle, the loss of and cost of replacing talent. How much does it cost to replace an individual staff member?
- Advertising the role
- Recruitment, assessment centres etc.
- Recruitment agency fee
- On-boarding and induction
- Time/productivity lost while they get up to speed
Then the hidden costs:
- The loss of their talents to your competitors
- The likelihood of their disengaged views being widely shared on social media or glassdoor.com
- The Impact on morale of team colleagues and other stakeholders
- The financial and reputational impact on the business, especially if it takes time to replace them
The Peter Principal, an expensive organisational mistake on many levels.
Here at Corporate Drama we develop authentic leaders, managers and teams. Our programmes re-energise, re-focus and re-engage your people. We dramatically transform workplace training leaving a measurable, visible impact throughout your entire organisation.
How can we help you and your people?
Or call 07976 720265