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by Dr. Howard Greisdorf, UniFocus
In 1969, Dr. Laurence J. Peter
originated a theory called “The Peter Principle” which states
that employees within a hierarchical
organization advance to their highest
level of competence, are promoted to a
level where they are incompetent, and
then stay in that position. It was a time
in corporate America where business
success was measured by the number
of new plants built and how well your
organization was viewed as a “good
corporate citizen.”
Since that time we have come to
know some key buzz words associated
with perceived profitability such as
total quality management in the ’70’s,
corporate re-engineering during the
’80’s, and habits of highly effective
people (Stephen Covey) and learning
organizations (Peter Senge) in the ’90’s.
Now, as companies continue to strive
for business success in the early stages
of the 21st century, the specter of global
competition and changing technologies
are profoundly impacting the nature
of work. Basic assumptions about the
workforce have changed from longterm
and stable to more short-term and
contingent. Such circumstances should
cause us to pause and reflect once
again on “The Peter Principle.”
Since 1980, a family member in onethird
of all U.S. households has been
laid off (New York Times, 1996). The
causes are many: lack of cash, declining
quality, a failed project, chaotic culture,
lack of vision, or a fragmented strategy.
However, the response is always
the same…a need to cut costs. The
result, in all cases, being fewer people
doing more work.
While most people hold favorable views
on their abilities and capacity to
distinguish accuracy from error, the Peter
Principle of this century says that
without promotion, employees with a
given level of competency can be given
additional tasks which they are expected
to perform with the same level of
competence. In essence, however, many
organizations are finding that both new
and existing employees are unskilled in
the tasks they are expected to perform
and are reaching erroneous conclusions
and making unfortunate choices in their
employment roles. This is by no means
a problem at only the rank and file level;
just scan the daily newspaper to find
the latest CEO who has been replaced
because of poor decision-making.
Today’s Peter Principle says, if you
are going to expect more work from
fewer people, they must be provided
with training. This training would allow
them to reach the level of competency
commensurate with the tasks that
must be performed and the decisions
that must be made in that position, so
as to promote the product, satisfy the
customer, and enhance profitability for
the company.
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Success and satisfaction depend
on knowledge, wisdom, and savvy
in knowing which rules to follow,
which strategies to pursue, how to
creatively solve problems, how to
communicate effectively, and how to
apply the right decisions. Too many
times, it is assumed that people have
the skills needed, when in fact their
approach to their job is imperfect at
best…wrongheaded, incompetent, or
dysfunctional at worst.
In 1995, McArthur Wheeler walked into
two Pittsburgh banks and robbed them
in broad daylight, with no visible
attempt to disguise himself. He was
arrested later that night, less than an
hour after the surveillance tapes were
broadcast on the news. When police
showed him the tapes, Mr. Wheeler
was utterly surprised. “But I wore
the juice,” he replied. Apparently, Mr.
Wheeler’s state of knowledge and
wisdom caused him to be under the
impression that rubbing one’s face with
lemon juice rendered it invisible to
video tape cameras (Fuocco, 1996).
How many of your employees, at all
levels, are coming to work everyday
wearing the “juice?” As Charles Darwin
(1871) sagely noted over a century ago,
“ignorance more frequently begets
confidence than does knowledge.”
The proposition posed here, is that
incompetent individuals lack the skills
that enable them to tell how poorly
they are performing, and as a result,
they gradually develop inflated views
of their own performance and abilities.
How many employees have you
promoted to management positions
without the proper training, and now
believe they are good managers?
Those with limited knowledge in a
domain suffer a dual burden: Not only
do they reach mistaken conclusions
and make regrettable errors, but their
incompetence robs them of the ability
to realize it.
The Peter Principle Redux provides
convincing evidence that time spent
on determining core competencies
and relating those competencies to
the external marketplace is time much
better spent than restructuring and
reengineering. The latter may shore up
your current position, but does little to
prepare you to compete in the future
(Hamel and Prahalad, 1994).
Dr. Howard Greisdorf is the Director of
Training at UniFocus.
Reprinted from FocusEd, Fall 2004 edition.
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