Most of us are familiar with the Peter Principle. It states that an individual rises to the highest level of his or her incompetence. Why incompetence and not competence? We see in organizations that if the process of promotion is based not on the overall skill of a great employee as a leader or manager, and is not thorough and deliberate, it ends up being detrimental both to the employee and the organization.
For example, if the leadership discovers that a particular medical assistant (MA) is doing an exemplary job, it might reward the employee as a team lead or in some other managerial role. This is done in good faith to encourage, promote and advance the excellence exhibited by the MA. But being a team lead demands entirely different skills from what made the MA a successful in his or her previous role. And the MA will often flounder in his new avatar, get frustrated, lose respect of his peers and become a problem employee from one who had a commendable story. The reviews will plummet. Complaints from other employees and patients might come flying in. And if things come to a head, the MA will either be demoted, warned, mentored, put on probations or transferred laterally.
This might even end up in termination from employment or resignation by the employee. Thus, an action with good intentions ends up becoming a problem for the company and a perfectly fine MA is lost to the organization.
This is why the Peter Principle is brilliant. It does not say that an individual rises to the highest level of his or her competence. That would be our intuitive understanding and common sense. However, in real life, the opposite is true. This principle is a reminder that we might have to consider other aspects of an employee's capabilities, including skill at leadership, emotional intelligence, cultural sensitivity, behavioral competencies, etc. before a promotion is considered. Any promotion or skill development is fraught with peril if it is not holistic, comprehensive, methodical and systematic.
To play with this, I came up with another insight which is all too obvious, at least to me, in corporate life. Usually, we feel that an organization rises to the level of the leadership, i.e., their competence. But I would like to submit a corollary to the Peter Principle at the organizational level. And that would be:
An organization rises to the highest level of its leader's incompetence.
If you have any doubts about this, look around us. Pick up the news. How leaders of great organizations and nations can act as a wrecking ball! One wrong person at the top can ravage the culture, integrity, competence, skill and growth of the whole organization. It is not the case of one bad apple spoiling the bunch. A bad apple at the bottom is comparatively easier to handle. It is the bad apple at the top that is cancerous. Or as the Japanese say, The fish rots from the head. An organization too rots from its head.
What are the lessons from this possible insight? These are my conclusion:
- The leader of any organization should be constantly eager to learn and adapt, be humble and keen to advance his skill set, including behavior competencies and leadership abilities. Complacence is poison. Arrogance or pride is hara-kiri.
- In choosing the leader of the organization, the screening or hiring or committee needs to be extremely deliberate and follow well-defined processes in hiring. Assessment of any individual is subjective. Yet there is a science behind the vetting, the reviews, background search and the eventual decision to pick a certain person.
- If an organization is not faring well or is in serious trouble, look carefully at the leadership. Often, all it takes is replacement of one individual at the top and the whole organization undergoes a radical turnaround. This cannot be over-emphasized.
- Developing great leaders and teams is an organization's ultimate responsibility. Resource and talent development is one of the greatest challenges to a Learning Organization that wishes to reward its employees the right way and with the right support.