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The Peter PrincipleOver-promotion is a common problem. When it comes time to fill a managerial vacancy, many organizations make the mistake of promoting top performers without considering if they have the appropriate abilities to be a manager. Just because an employee excels at their current job, doesn’t mean that they will excel as a manager. In fact this presumption is number two on our list of The Top Twelve Fallacies That Get In The Way of Organizational Performance. There is a concept in management theory that deals with this: the Peter Principle.

The Peter Principle refers to an employee being promoted for their performance in their current role, rather than the capabilities required for the promotion. According to the Peter Principle, people tend to be promoted until they rise to “their level of incompetence.”

The Peter Principle and over-promotion tends to happen in organizations where there is a lack of awareness of the following four important facts:

  1. The success of an individual does not equate to the effectiveness of an individual as a manager.
  2. An individual won’t be successful as a manager unless they possess the appropriate problem solving capabilities for the complexity of work in their role.
  3. Effective managers require managerial leadership skills and knowledge in addition to the technical skills of the role.
  4. Effectiveness in a managerial role requires that managers apply themselves fully to all aspects of their work.

Success Does Not Always Equal Effectiveness

Though the qualities that make an employee successful are valuable, they are different from the qualities that make a manager effective. Successful managers tend to be better at networking and presenting themselves around senior staff, but their charisma is not a good indicator of their effectiveness. The idea that successful managers make the most effective managers is number nine on our list of The Top 12 Fallacies That Get In The Way of Organizational Performance. When evaluating potential candidates for a promotion, organizations should make sure they dig beneath the surface.

The remaining three causes for manager not being successful are what were consider to be The 3 Fundamental Capabilities of Managers.

1. Problem Solving Capability

As employees move up in an organization and work gets more complex, a higher level of capability is required to deal with that complexity of work. Which is why, in order to succeed as a manager, one must possess the right problem solving capability. When managers don’t have the right problem solving capability, they continue to work at the same level as they worked in their previous job, and they can’t add value to their new team, because they are working more at their former peer level, rather than one level up.

2. Skilled Knowledge

Most organizations are pretty good at identifying the knowledge and skills required for the technical aspects of a position. In a related article we outlined the three aspects that are necessary to address – Knowledge, Technical Skills and Social Processing Skills. Even when organizations do a good job, they tend to focus on the skills and experience related to the function of the job but not on identifying and describing the managerial leadership skills that are required. If someone has the problem solving capability, but not the skills and knowledge to manage, then they will be as successful as they could be. Managerial leadership skills are not learned by osmosis. In fact, most role models that managers follow as examples also are not properly equipped. As a result, the managerial leadership work is not well done.

3. Application

The third fundamental capability is Application. This means that managers must value all aspects of their work, so that they apply themselves properly to that work. This includes managerial leadership work. Too often, individuals apply to manager-level positions to get the promotion and status, but do not value managerial leadership. In these cases, the person’s focus is on the technical work, and the managerial works keeps getting put of “until tomorrow”. As a result, the team members do not receive the managerial leadership that they need to be successful in their roles.

How Should You Choose Who To Promote?

It’s essential for organizations to have an effective talent management system in place. Of course, that doesn’t mean it’s not a good idea to let employees spread their wings and give them opportunities. For example, giving a high potential employee a project that tests their problem solving boundaries is a great way to evaluate their abilities. However, it is more fundamental that you have a talent management system in place. Then, when there is a vacancy, you can look at your whole talent pool and easily identify the person best suited for the job. Or vice versa, you can identify critical positions that are going to become vacant in the future, and groom employees you expect to mature over that period of time, for those roles.

In order for organizations to avoid the problem of the Peter Principle, promotions can’t be based on the appearance of success or whether an employee is a top performer. Instead candidates should be evaluated based on their problem solving capability and their ability to be effective as a manager as measured against the requirements of the specific position being considered. To ensure that this happens, organizations should have a system in place that maps their whole talent pool against potential roles that are described using the be the 3 Fundamental Capabilities of Managers. For manager positions, the managerial leadership requirements for success must be identified, and candidates assessed against them with as much vigour as any of the other requirements.

FREE Recorded Webinar: The Peter Principle – It’s a Real Thing!

To learn more, watch the recorded Webinar that addresses the subject of this article PLUS the key steps you can take to resolve situations where managers are not managing competently.

“… every employee tends to rise to his level of incompetence” was a premise put forward by Laurence J. Peter in a book published over 50 years ago. To-day this saying is more true than ever.

You have all seen it. When you take over a team some of your managers “get it”. But more of them simply do not. In my many forays into organizations I find that most managers are simply not doing their managerial work. Small wonder that 70% of strategies fail in the execution!

In this Webinar you will come away with three important things:

1. An understanding of the underlying causes that put people into positions where they cannot succeed.

2. How you can avoid promoting someone to their level of incompetence.

3. The key steps you can take to resolve situations where managers are not managing competently.

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