Nurturing Leaders without Sacrificing Performers (Hint: It's not what you think)

Bad managers can ruin your company culture, lower your team's performance, and drive away your best employees. You have seen it happen in other companies and don't want it to happen to yours.

You have a great team of talented people who work hard and deliver results. You are proud of what you have built and how far you have come. But how do you identify who has the potential to be a good manager and who doesn't?

A famous theory explains why most organizations end up with incompetent people in leadership positions. It's called the Peter Principle, proposed by Laurence Peter in 1969 as a satire.

The Peter Principle states that:

• People are promoted based on their current role performance rather than suitability for the next role.
• Eventually, people reach a level where they are no longer competent and stop getting promoted.
• Therefore, every position in an organization tends to be occupied by someone incompetent.

Example:

• Suppose you have a friend, 'Z,' a fantastic designer.
• 'Z' joins a great company as a Junior Designer and does an excellent job.
• The following year, 'Z' is promoted to Senior Designer and gets more responsibilities, but still works as an individual contributor (IC).
• The following year, the team lead quits, and the company decides to make 'Z' the new team lead based on their stellar performance as a designer.
• 'Z' accepts the promotion, hoping for more money, prestige, and growth.
• But there is a problem: 'Z' has no clue how to manage a team. Is terrible at communication, feedback, delegation, motivation, and conflict resolution.
• Now, 'Z' makes their team unhappy and unproductive, and they no longer have time to do any design work.
• 'Z' is stuck in this role until they quit or get fired.

The Peter Principle has done its job: It has found that the organization has put 'Z' in such a position that he is stuck and no longer performing.

Is there a better way?

Yes, there is.

A study on 50,000 salespeople across 200+ companies showed that:

• The team's performance declined when the best salesperson was made the sales manager.
• When the person with the best management ability was made the sales manager, the team's performance increased.

So, how do you measure management ability?

There are many ways to do that, but I like this simple method by Julie Zhuo, a former VP of Product Design at Facebook.

She suggests asking these three questions to each team member:

1. Do they find achieving a particular outcome more motivating than playing a specific role?
2. Do they like talking with people?
3. Do they provide stability in emotionally challenging situations?

The person who answers 'Strongly Agree' to all three questions has high management potential. You can help them develop this potential by providing training and coaching.

What about your star IC who answers 'Disagree' or 'Strongly Disagree' to any of these questions?

Don't force them to become a manager.

They will either hate it and lose their passion or suck at it and hurt their team. Either way, you will lose them eventually.

Instead, create two parallel tracks for career progression: one for managers and one for ICs. Both tracks should offer equal opportunities for growth, recognition, and compensation.

This way, you will create a culture where:

• People are happy and engaged because they do what they love and are good at.
• People are productive and effective because they have the right skills and support for their roles.

You may know about you, but this is one of the best investments you can make for your startup's long-term success.

Source: [The DNA of a Successful Sales Force]