Beyond the Peter Principle

In their 1969 book, The Peter Principle, Laurence Peter and Raymond Hull described how people working in organizations tend to rise to a level of incompetence.

A guy who is very good at his job gets promoted. The new job may require some skills that weren't part of his previous job. He may or may not have those skills, but if he is able to master the new position and make a good impression, he is likely to get promoted again. Again, the skills needed for the new position are likely somewhat different. If he is good at that job, he'll get promoted again, If this continues, the guy will be finally promoted into a job that is completely beyond his ability. His incompetence means that he won't be promoted again, so he stays in that position, performing poorly.

According to this theory, hierarchical organizations eventually become filled with, and run by, people who just aren't very good at what they do. The Peter Principle is expressed as: "In a hierarchy, every employee tends to rise to his level of incompetence." Its corollary is: "In time, every post tends to be occupied by an employee who is incompetent to carry out its duties."

These principles are on very public display in our government's current administration, which has carried them to an extreme level in which incompetence does not prevent people from being further promoted, and may even be the reason some people of low ability are placed in positions requiring knowledge, skills, and experience that they lack.

Incompetent people in positions of authority feel threatened by those whose competencies are significantly greater than their own, and will, whenever possible, expell them and replace them with incompetents with whom they feel comfortable

 

Follow the Money

A company where I once worked decided to do an internal audit. They didn't have to fire anybody or shut down operations before they could do it. They just went through the records of all their accounts with their clients and tracked what money was received, what was paid out, etc.

In the course of the audit, they found a few cases where money should have been reimbursed to clients but was not. What did they do about this? Did they shut down the company? No. Did they fire half the employees? No. They realized these were just oversights that occurred when things were busy and complicated.

They wrote explanatory letters to the clients in question and sent them checks for the amounts owed. Nobody got upset.

 

Prescription For Success

I'm going to restructure my company, using the same business model as health care companies. When you order my products, I will send you a smaller quantity than you requested. If you complain, I'll just tell you that I've determined that is all you actually need.

Sometimes I'll send nothing. When you complain, I'll tell you that I've determined that this was an unnecessary order.

Sometimes I'll send a different product, with a note saying you must try this first to see if it works out before you can have what you ordered.

Sometimes I'll ship exactly what you ordered, but I'll include a bill for another 25%. When you question the bill, I'll tell you it's a required co-payment.

This will be great.