A CEOs Favorite Cop Out (and what to do instead)

He leaned in when he said it.??

The corner of his mouth turned up ever so slightly, revealing a hint of smugness.

“Do you think it was the Peter Principle?” the CEO asked me.

I could tell right away it was a cop out.? After all, I’d only been doing the job for a month.? Hardly enough time to make that assessment.

At the time I was working as the CMO for a start-up in the financial publishing space.

And the CEO had met with a financial crunch that made my salary less desirable.

“Who...? Me or you?”? I answered, watching the smugness draining from his face.

That was pretty much the end of that position.

A wasted month.? But there was one thing good that came out of it.?

It got me thinking about the Peter Principle.

I’ve noticed most executives accept the Peter Principle as a truism.

A universal truth.? Like how no matter which line you pick, it’s always the slowest.? Or like gravity.

Me?? I think the Peter Principle is nearly always a cop out.? Or at the very least, a failure in leadership.

In case you’re not familiar, here’s the Peter Principle in a nutshell…

It says that employees who are great at their jobs often get promoted.? And, sooner or later, you’ll promote them to the level at which they become incompetent.

Which implies that nearly everyone in an organization is incompetent.

We’ve all seen it.? The star sales rep who gets promoted to sales manager - and couldn’t manage his way out of a wet paper bag.

Or the manager that everyone loves who gets promoted to director - and falls apart.

“It’s the Peter Principle,” those higher up the food chain are quick to declare.? And the yes-people around the table nod solemnly, as though it explains everything - secretly hoping they’re not talked about the same way.

Which begs the question…

Who’s fault is it, really???

Who’s idea was it to promote someone who wasn’t ready?? Or who wasn’t yet capable??

If you’re a CEO or other executive, you know the buck stops with you.

Heavy lies the crown.

So, rather than accepting the Peter Principle as an inevitability, here are 4 strategies you might use instead.

Peter Principle Alternative #1 - Pay For Real Coaching

If you’ve promoted someone already and that person is floundering, get them solid help.

You owe it to them, to yourself, and to the company to make sure they succeed.

Which means you don’t give them a pep talk and leave them to figure it out on their own.

You don’t have them shadow someone else who is unconsciously competent, either.

And you don’t throw them in some flimsy training program.

Instead, consider hiring an outside coach to bring them to the next level.

Expensive?? Yes.? But far cheaper than letting the employee go and starting over.

Peter Principle Alternative #2 - Incentivize High Performers to Stay Put

And I don’t just mean money.??

As an executive, you’ve probably been around the block.? You know you can motivate different people in unique ways.???

You can motivate some by money, sure.? But some you have to motivate differently.

Maybe it’s recognition among peers.? Or perks.? Or variety in what they do.

So, if an employee gets restless and starts to inquire about advancement, do this.? Take a step back and figure out what they really want.? Then find a creative way to give it to them.

For example, let’s say you have a customer service representative who is fantastic at their job.? Now, though, they seem bored and are looking for a promotion.? But you know they won’t be great as a customer service manager.

Maybe you find out what they want is recognition.? So you do a write-up about them in the company newsletter.

For the right person, a special mention for someone like that can re-energize them for 6 months or more.

Peter Principle Alternative #3? - Promote Laterally

I had a sales rep who reported to me one time tell me “I don’t want to be the number 1 sales person.? Or even in the top 10.”

Not great words coming from a sales person.

Should I have tried to motivate him?? No - you can’t create desire in people, you can only fan the flames of what’s already there.? And when it came to sales, he had zero desire.

Should I promote him to sales manager?? Of course not - his colleagues would eat him alive.? And rightfully so.

Should I fire him?? I could have, but that would have been a waste of talent.??

Instead I promoted him to customer service team leader.? A position he was more suited for and one he excelled at.

Peter Principle Alternative #4 - Create a Brand New Position

Sometimes you get people who are fantastic people - they’re just in the wrong role.

And no other role fits any better.

Consider the sales rep who, after years of success, needs a change.? But they don’t have the skills necessary to be a manager.??

They have great coaching ability.? But they don’t have the temperament to hire and fire.? Or to otherwise hold people accountable.

What do you do?? Let them burn out or seek opportunity elsewhere?? Or promote them to their level of incompetence?

Why not create a new position for them instead?? In this case, a sales coaching position.? Or a sales training position.? One that makes them happy and adds value to the organization at the same time.

Death to the Peter Principle?

CEOs and other executives often say people are their greatest assets.? And yet, they squander talent by moving people through some rigid hierarchy.

It doesn’t make any sense.

If you agree, resolve today to do something about it.? Create a culture in your organization where the phrase “Peter Principle” is a swear word.? And never accept it as an excuse again.