Procurement’s Version of the Peter Principle: Are We Setting Up Our Future Leaders for Failure

Have you heard of the "Peter Principle," in which someone is promoted to the highest level of incompetence? Sure, you have.

I recently came across this 1974 video from the BBC archives where Dr Laurence J. Peter talks about the hierarchy where “every employee tends to rise to his (or her) level of incompetence.”?It is about six and a half minutes long, so it's worth a quick view.

While presented in general terms that apply to any industry or profession, I wonder if there is a Peter Principle in the procurement world and, if there is, why does it happen?

In other words, is it incompetence because of a lack of individual skill sets, or are there other mitigating factors we tend to overlook?

This post will dig a little deeper into procurement's version of the Peter Principle.

A Failed Farm System

In professional sports, a farm system is a key to developing talent so players can 1. Make the transition to the professional ranks, and 2. Can deliver results, e.g., a championship, when they get there.

“Procurement staff are more likely to switch jobs for more senior positions than their counterparts in other parts of the business.” - Why Do Procurement People Leave Their Jobs? – Procurious (May 2015)

It seems that the issue regarding talent development and the maturation of experience and expertise to work at a senior level within organisations is lacking. As a result, the mindset of most procurement professionals is that the only way to get ahead is to switch companies (see Procurious quote above). But what are they moving up into at a new company? What are they taking with them in the way of industry knowledge from a former employer?

An Absence of Skills?

I have written about and presented to audiences the following statistic or revelations if you prefer:

Over five consecutive years, a survey of CPOs found that most (a majority) believe that their teams lack the required skills to deliver on their strategic objectives.

While some people express surprise hearing this news, the response is one of knowing resignation for many. Apparently, companies consistently cut their training budgets over the same five years (2013 to 2018). If training budgets are being cut, how do procurement professionals develop the needed skills to elevate them to the higher ranks of responsibility and required performance?

Given the above reality, an even better question is how effective is the hiring process. Or a better way to phrase the question is how effective could it be given the amount of horizontal movement and the lack of a talent development strategy??

Old News

In the writing world, referencing articles and studies published more than 2-years ago is a big no-no. The thinking is that anything beyond that set time is no longer relevant or, at best, is diluted by present-day, new realities.

Depending on the topic about which you are writing, there is some merit in that thinking. However, I also believe those who fail to learn from the past are doomed to repeat it, so I am referencing material going back to 2015.

I also believe that what you do now does have a far-reaching impact on what happens in the future.

The bottom line of today's post is that the challenges with talent today started back in 2015 (and earlier). The only way we can address these challenges in the future is to create a farm system of development that follows an established career path vertically within the organisation to achieve updated and relevant objectives.

In my next post, I will talk about how you can build your organisation's talent development farm system.

#procurement #peterprinciple #career