The Peter Principle

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Image created with Midjourney. Image prompt: In a minimal 2D style, depict a series of ascending podiums, each one labeled with progressively complex tasks. On the highest podium reached, a character struggles to juggle multiple tools or symbols representing their job, while lower podiums show the same character handling the tasks with ease.

People in a hierarchy tend to rise to their "level of incompetence".

Laurence J. Peter

In the world of business, we often see employees climbing the corporate ladder, aiming for higher positions that offer better perks and a bigger paycheck. However, this ascent can sometimes lead to a peculiar phenomenon, known as the Peter Principle.

The Peter Principle, named after its creator, Dr. Laurence J. Peter, suggests that in a hierarchical organization, people tend to rise to their "level of incompetence"1. In other words, employees are promoted based on their performance in their current role, rather than their potential to perform in the next one. This can lead to situations where competent employees climb the ladder until they reach a position they are not capable of handling effectively, hence reaching their "level of incompetence".

Now, you might wonder, how does this connect to the world of digital software products?

Let's explore this with three examples.

Product Managers Turned CTOs

Consider a product manager who excels in their role. They have a deep understanding of the market, are great at communicating with the development team, and can balance the needs of various stakeholders effectively. Due to their success, they are promoted to the role of Chief Technology Officer (CTO), a position that requires a deep technical understanding of the product and the ability to make strategic decisions about technology investments and architecture. If the product manager lacks these technical skills, they could struggle in their new role, thereby exemplifying the Peter Principle.

Developers Turned Team Leads

A software developer might be excellent at writing code, solving complex problems, and creating high-quality software products. Recognizing these skills, the organization promotes them to the position of a team lead, a role that requires more than just technical expertise. It demands people management skills, strategic planning, and often less time spent coding. If the developer struggles with these new demands, they have been promoted to their level of incompetence.

Designers Turned Design Managers

A UI/UX designer might be exceptional at creating intuitive and visually appealing designs. Their success leads them to be promoted to a design manager, a role that involves less hands-on design work and more team management, strategic decision-making, and cross-department coordination. If the designer finds it hard to adapt to these changes, they have reached their level of incompetence.

The Peter Principle is a reminder of the importance of recognizing the distinct skills required at different levels of an organization, especially in the realm of digital software products. Each role, whether it's a developer, a product manager, or a designer, requires a unique blend of skills, and excelling in one doesn't necessarily translate to success in another.

To mitigate the impact of the Peter Principle, organizations need to reassess their promotion strategies. Instead of promoting solely based on performance in the current role, potential to perform in the new role should be considered. Additionally, providing training and support during transitions can help new promotees adapt and excel in their new roles.

In the fast-paced world of digital software products, staying aware of the Peter Principle can help organizations ensure that their employees are positioned for success, which ultimately drives the success of the products they build.