Aug 112011

Peter Principle, Applied to Management

Peter Principle, Applied to Management

My Management by Chameleon Post from a couple weeks ago generated more comments than usual, and an entertaining email thread among my friends and former staff from MovieFone.  One comment that came off-blog is worth summarizing and addressing:

There are those of us who should not manage, whose personalities don’t work in a management context, and there is nothing wrong with not managing.  Also, there promotion to management by merit has always been a curiosity to me. If I am good at my job, why does it mean that I would be good at managing people who do my job? In other words, a good ‘line worker’ doth not a good manager make. I’d prefer to see people adept at being team leads be hired in, to manage, then promotion of someone ill-fitted for such a position be appointed from within. This latter happens far to often, to the detriment of many teams and companies.

For those of you not familiar with the Peter Principle, the Wikipedia definition is useful, but the short of it is that “people are promoted to their level of incompetence, when they stop getting promoted…so in time, every post tends to be occupied by an employee who is incompetent to carry out their duties.”

Back when I worked in management consulting, I always used to wonder how it was that all the senior people spent all their time selling business.  They hadn’t been trained to sell business.  And a lot of the people great at executing complex analysis and client cases hated selling. Or look at the challenge the other way around:  should a company take its best sales people and turn them into sales managers?

We’ve had numerous examples over the years at Return Path of people who are great at their jobs but make terrible, or at least less great, managers.  The problem with promoting someone into a management role mistakenly isn’t only that you’re taking one of your best producers off “the line.”  The problem is that those roles are coveted because they almost always come with higher comp and more status; and if a promotion backfires, it generally (though not always) dooms the employment relationship.  People don’t like admitting failure, people don’t like “moving backward,” and comp is almost always an issue.

What can be done about this?  We have tried over the years to create a culture where being a senior individual contributor can be just as challenging, fun, rewarding, impactful, and well compensated as being a manager, including getting promotions of a different sort.  But there are limits to this.  One obvious one is at the highest levels of an organization, there can only be one or two people like this (at most) by definition.  A CEO can only have so many direct reports.  But another limit is societal. Most OTHER companies define success as span of control.  You get a funny look if you apply for a job with 15 years of experience and a $100k+ salary yet have never managed anyone before.  After all, the conventional wisdom mistakenly goes, how can you have a big impact on the business if all you do is your own work?

The fact is that management is a different skill.  It needs to be learned, studied, practiced, and reviewed as much as any other line of work.  In most ways, it’s even more critical to have competent and superstar managers, since they impact others all day long.  Obviously, people can be grown or trained into being managers, but the principle of my commenter – and “Peter” – is spot on:  just because you are good at one job doesn’t mean you should be promoted to the next one.

I’m not sure there’s a good answer to this challenge, but I welcome any thoughts on it here.

  • Daniel

    Great, great post – I've seen this occur many times and have been responsible myself for making several mistakes in this area in the past. As you say it often can ruin the employment relationship or at best, it consumes an awful lot of unnecessary time and pain on both ends.

    It's down to the leaders of the organization to manage individuals who are ambitious and help guide them forward in their career so that both the employee and the employer get the best deal. You have to make them feel good about being in roles that have maximum impact for the business and help them realize their contributions in the bigger picture. Stepping up to manage people who do their job is not always the best way to advance their career, pay and value to the organization and it takes good leaders to help people realize that.

    • Matt Blumberg

      Amen to that, Daniel. Leadership counts for a lot here.Matt

  • Dave Schwartz

    Excellent post Matt and so very true. As an individual contributor and now manager, I have witnessed people getting placed into management roles because 'it's time' or 'that's the right thing to do' or 'he / she has seniority' or 'he / she may leave if we don't promote them'. Many individual contributors have a fairly narrow idea of how things can get accomplished – not recognizing that everyone has slightly differing styles and therefore making it difficult to be a good manager. In my experience, open minded, selfless and loyal people make the best managers and I know many of them at Return Path (well done).

    An additional point rests in someone wanting to be promoted in order to recuse themselves from their current duties. Using sales as an example, you may have a salesperson who wants to be a sales manager so they don't have to sell anymore – a big red flag. All sales managers should continue to sell – it's the only way to follow your market and truly share / empathize with your team. My 2 cents!

  • Cathy

    I completely agree, and had a conversation with someone today who was considering applying for a management role; it was great to be able to have a really honest conversation about what it means to manage at RP, and the support she'd get if she started managing here. We've had a few instances where people decided they preferred not to manage any longer, and stepped back to individual contributor roles. These transitions have been very successful; I' haven't seen that happen at other companies. I appreciate having a CEO who truly supports people playing to their strengths, and doesn't judge people if they choose to be an individual contributor rather than a manager.

    • Matt Blumberg

      Thanks, Cathy.  The world needs strong, senior individual contributors, too!  There are just limits to how many an organization can have.

  • Erich_Lagasse

    I think what you say is true because people have different types of drives, including managers. We recently wrote… about the Peter Principle and how our childhood traumas motivate us to accomplish different things. Weaknesses can arise when we don't harness the trauma adequately. – Erich