Why do some of our most capable people begin to struggle when we give them a promotion?
It is a difficult question for the head of an organization. You may have made the decision because the person was dependable, knew the business, earned the trust of colleagues, and consistently delivered results. Promoting them seemed like a sound way to strengthen the management team and recognize their contribution. Then, months later, you find yourself wondering why the new role is not working as you expected.
The person may be working harder than ever. They may be the first to help when something goes wrong. Yet the team is not improving, decisions keep coming back up the organization, and the person seems to spend more time doing the work than managing it.
Are we treating success in one role as proof that someone can be successful in the managerial position for that role?
That question takes us beyond the individual. As the head of the organization, whether you are its founder, a principal, or a CEO reporting to a board, you are accountable for the performance of the whole organization. That includes making sure managerial roles are designed for the work the organization needs and that the people appointed to those roles can perform it.
The promotion that seems obvious
Consider a growing company with a small sales team. One salesperson stands out. She knows the products, has strong relationships with customers, responds quickly, and can be relied on to keep sales moving. When the team grows and the owner can no longer direct everyone personally, she looks like the obvious choice for sales manager.
At first, the decision feels right. The new manager knows what good selling looks like and is eager to help. But as the months go by, she stays close to her own accounts. When a salesperson has a difficult customer, she steps in and handles it. When a deal stalls, she takes over. Her colleagues appreciate the help, and she remains extraordinarily busy.
What she is not consistently doing is improving how the whole team works. She is not looking across customers and territories for patterns, strengthening the sales process, setting priorities for others, or developing people to solve more of their own problems. In practice, she has become the most experienced salesperson with a management title.
From the owner’s chair, this may look like a lack of confidence or a need for training. Either could be true. But there is a more fundamental question: Can she do the problem-solving work the managerial role requires?
The example comes from sales, but the same pattern can arise in operations, professional services, administration, or any other part of an organization. It can also occur when a capable Level 2 manager moves into a Level 3 director role. Each move may require the person to work at a higher level of complexity. The title alone does not tell you whether that shift has happened; the work itself does.
What the Peter Principle helps us see
The Peter Principle gives a memorable name to a familiar pattern: people are promoted because they performed well in a previous role, then reach a role in which they cannot perform as well. It is often described in terms of someone rising to a “level of incompetence.” That language can sound harsh when the person involved is someone you respect.
I think there is a more useful way to examine what has happened. The person may remain highly capable at the work they previously performed. The promotion has placed them in a role that asks for a different level of problem solving. Their past performance is real. It simply does not establish that they can perform the new work.
This matters because leaders can respond to the wrong problem. If the new manager is putting in long hours, it is tempting to offer encouragement, more time, or another management course. Those responses may be appropriate when the gap is knowledge or experience. They will not, by themselves, give someone the current capability to deal with a level of complexity they cannot yet handle.
The head of the organization needs to understand the work in the role before deciding what the person needs.
Managing requires a different contribution
The strong salesperson in our example is skilled at responding to customers, understanding products, and moving opportunities forward. The Level 2 sales manager has a different accountability. She must make the work of several salespeople more effective. That means setting context and priorities, observing patterns, improving routines, coaching people, and dealing with problems that an individual salesperson cannot resolve from within their own role.
The distinction becomes clearer if you ask what would happen if the manager were absent for a month. Would the team have stronger processes, better judgment, and clearer priorities because of the work she has done? Or would everyone simply miss having their best salesperson available to rescue difficult deals?
The same question applies higher in the organization. A Level 2 manager may be excellent at improving the work of a team over several months. If a Level 3 director role requires coordinating several functions, building capacity, and making connected decisions over a longer period, it calls for another shift in problem solving. The person must add value to the work of managers, not simply become the most experienced manager in the group.
Every managerial promotion should therefore begin with a clear account of the work at the next level. What problems must the person solve? How much uncertainty must they handle? How far ahead must they think? What decisions must they integrate across people or functions? Only then can you judge whether a candidate’s earlier success is relevant evidence of readiness.
Fit to role has three parts
In the Effective Managers™ approach, I look at three elements when considering whether someone fits a role: problem-solving capability, skilled knowledge, and application. All three matter, but they call for different management responses.
Problem-solving capability is the person’s current ability to handle the complexity of the work. Can they look beyond the immediate issue, deal with ambiguity, connect factors that affect one another, and make sound judgments over the time horizon of the role? In our example, the question is whether the salesperson can work as a manager who improves the team’s results through other people.
Skilled knowledge is what the person knows how to do. A new manager may need to learn how to plan work, give feedback, understand the numbers, or use a management system. If they have the capability to handle the role, those skills and that knowledge can be developed through training, experience, and support.
Application is whether the person values this kind of work and will apply themselves to it consistently. Someone may be able to manage but love the direct customer work far more than developing a team. How they value the work, and how that aligns with the organization’s culture, should be part of the selection decision. A management title cannot create a lasting interest in managerial work.
These distinctions prevent a leader from treating every struggle as the same kind of problem. You can train skills and knowledge. You can select people who value the work and fit the culture. Problem-solving capability, however, develops through maturation. It cannot be installed through a course, created by giving someone a bigger title, or forced to appear because the organization urgently needs a manager.
Potential and readiness are different questions
People can mature in their ability to handle more complex work. That is an important reason to invest in their development and give them opportunities to grow. But maturation does not occur simply because a vacancy has opened or a business plan calls for a new management level.
A person may well be capable of a higher-level role in the future and still be unable to carry its full accountability today. If you promote them before that capability is present, coaching and encouragement will not make them a fit for the current role. They may try harder, extend their hours, and lean on the work they already know. The organization still needs someone capable of solving the problems assigned to that role now.
That is a difficult distinction to make, particularly when someone is loyal and valued. It is also a fairer distinction than assuming they have failed as a person. Their contribution in the previous role remains valuable. The placement decision is what needs to be examined.
The head of the organization owns the conditions for good placement
As head of the organization, you do not need to make every promotion decision personally. You do need to ensure that the organization understands what its managerial roles are accountable for and has a sound way to decide who is ready for them. Human Resources can support that work, and managers should assess and develop their people, but the capability of the management structure is part of your accountability for the whole organization.
This is especially important when growth creates pressure to fill a role quickly. You may have a strong performer available, a team asking for more support, and no obvious external candidate. Promoting the person can seem like the practical answer. If the new role has not been defined clearly, however, you are asking everyone involved to discover its requirements after the promotion has already been made.
The question is more demanding than “Who deserves the opportunity?” It is “What work does the organization need done at this level, and who can carry that accountability?”
That does not mean disregarding ambition or closing off development opportunities. It means taking the work and the person seriously enough to assess the match before making a decision that affects both their future and the performance of everyone who will depend on them.
The Three Fundamental Capabilities of Managers
In the Effective Managers™ approach, I assess fit to role through the Three Fundamental Capabilities of Managers: problem-solving capability, skills and knowledge, and application. Application means valuing the work enough to put one’s full effort into it. All three matter, but a gap in each calls for a different response.
- Problem-solving capability. This is the person’s current ability to handle the complexity of the work. At Level 1, much of the work is declarative: applying established procedures and standards accurately. A move to a Level 2 management role requires diagnostic thinking. The manager must see patterns, identify causes, and use judgment where there is no preset answer. A move from a Level 2 role to a Level 3 director role can require serial thinking: building a sequence of connected decisions and actions over a longer period, with each step creating the conditions for the next.
This is a change in how someone must solve problems, rather than an increase in the number of problems on their desk. The framework draws on Elliott Jaques’ research into complexity of work and the maturation of mental processing capability. People’s capacity to handle more complex work can mature over time, but it does not mature on demand. If a person cannot yet solve problems at the level the role requires, training, pressure, and a new title cannot make them a fit for that role today.
- Skills and knowledge. The person also needs the practical knowledge and skills to do the work, including its technical, managerial, and interpersonal demands. A new manager may need to learn how to plan work, set context, give feedback, and develop others. These are things the organization can teach and support, provided the person has the underlying problem-solving capability for the role.
- Application: valuing the work. Finally, does the person value the work they are being promoted to do? Our excellent salesperson may love winning business and helping customers but find little satisfaction in improving processes and developing a team. Selection must take account of whether the person will apply themselves fully to managerial work and whether that orientation fits the organization’s culture. A management title cannot create lasting commitment to work the person does not value.
These three capabilities give the head of the organization a better way to understand a struggling manager. Skills and knowledge can be developed. Valuing the work is something to explore carefully before selection. Problem-solving capability follows a maturation process, so potential for a future role must be distinguished from readiness for it now.
For a deeper explanation, see my articles on the levels of work, problem-solving capability, skills and knowledge, and application.
When the promotion has already happened
Sometimes the issue becomes visible only after the person has been in the role for a while. The first response should be to understand what is happening, rather than attach the Peter Principle as a label to the person.
Was the role defined clearly? Did the new manager receive the authority, context, and support needed to do it? Are they missing skills that can be taught? Do they value the managerial work? Or is the consistent difficulty that they cannot yet handle the complexity and time horizon of the role, even with appropriate support?
Those questions lead to different actions. A knowledge gap calls for development. Unclear accountability calls for better role design and managerial leadership. If the person’s current problem-solving capability does not match the work, giving them more of the same training or simply waiting under growing pressure is unlikely to help. The organization must find a way to put the work in capable hands and have an honest, respectful conversation with the person about a role in which they can contribute well.
That conversation can be uncomfortable. Letting a capable person struggle indefinitely while their team lacks effective management is uncomfortable too, and it carries a cost for everyone involved.
There is another lesson here. If the only way to recognize an excellent specialist is to make them a manager, the organization may create a placement problem that could have been avoided. Valued people need meaningful ways to grow and be recognized, including paths that do not require them to manage others.
Final thought
The Peter Principle is a useful reminder for anyone making a promotion decision. For the head of an organization, the deeper question concerns the work itself. Are your managerial roles clear about the contribution required at each level? Do your promotion decisions test for that contribution? And when a valued person struggles, do you know whether the issue is capability, skilled knowledge, application, or the way the role was designed and supported?
Getting to the root cause can change the conversation. Instead of asking why an excellent person has disappointed you, you can ask what the organization required, what the person was ready to do, and what decision would serve both the individual and the team now.
This is the kind of leadership question that benefits from a confidential discussion with peers. In a Vistage group, other heads of organizations can challenge an initial diagnosis, share what they have learned from difficult placement decisions, and help you see a more fundamental issue before you commit to a solution. I have seen how much more useful those conversations become when a leader brings the real question to the table.
If that perspective would be valuable as you lead your organization, learn more about my Vistage peer groups.
