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« Knowledge Has an Expiration Date | The Future is in The Back End »
Thursday
Oct252012

Revenge of the Peter Principle

The book "The Peter Principle" is required reading for any business student wishing to engage in party talk with other want-a-be CEOs. Written by Dr. Laurence J. Peter and Raymond Hull in 1969, the book's premise is that in organizations, all workers are promoted to their level of incompetence, where their career then stalls because they are incompetent and unworthy of further promotion. The logical conclusion is that many positions in large organizations that promote from within are filled by incompetent managers who've reached their "level of incompetence."

This little white book, seen on the bookshelves of the majority fortune 500 executives, has had a tremendous impact on business culture and inspired a subliminal change in the philosophy of promotion. Many organizations now hire for the "position" rather than consider promoting from within, often looking outside the organization for managerial talent.

The book suggests that the skills that make a good, say mechanic, are not the same skills that make a good manager of mechanics - fair enough. But the book indirectly implies that a manager doesn't necessarily need expert knowledge of the skill set necessary for those he manages. In other words, it's not imperative for a good mechanic manager to have expert knowledge of repair.

The seeds of this thinking are now bearing fruit at he highest levels of corporate America. A bumper crop of Ivy League trained MBA middle Managers, Vice Presidents, and CEOs are driving vehicles they have no idea how to fix. In my own company, I've personally witnessed the hiring of Interactive Marketing Vice Presidents, responsible for entire company web sites, unable to code even one line of HTML. I've also seen MBAs who's first job, ever, is a Senior Manager position at a Fortune 300 company. These "big thinkers" brimming with confidence and bravado, truly believe that management is a science unto itself and regard practical experience as superfluous. Worse, no matter how much experience you have, today many companies won't even consider a Manager for further promotion without and MBA on his resumé. Policies such as this, for reasons of bias or policy suggest that a lifetime of experience doesn't supply the equivalent knowledge of two years cloistered in a classroom.

I have nothing against "formal education." On the contrary, while I believe, in most cases, formal education is expensive and inefficient, it has value. But I can tell you with absolute certainty, that I could go to any bookstore and pick out thirty books, that if read, would impart to you the sum knowledge of everything academic I was exposed to in a top notch business college. On the other hand, the experience I acquired, working my way through business school as a factory laborer, a waiter, a landscaper, a delivery man, and an entrepreneur were invaluable. Understanding what it feels like to shovel molten glass for eight hours, to field customer complaints in a retail environment, to organize a delivery route for maximum efficiency, or to build a jubilant party from a group of nervous guests, imparts practical knowledge and the grit absent in academia. True wisdom is knowledge plus experience. You may think you know something, but without experience, you will never trust it.

When managers don't understand the trade they are managing, whether that trade is medicine, marketing, or brick laying, a host of issues and inefficiencies develop and fester. Without practical knowledge, how does a manger know how much time to budget for a task or what tools are necessary for a project to succeed? How can a manager determine which projects are practical and which are "fools errands?" How can he tell if he's getting the best effort from those answering to him? In the creative business, I've worked for Managers that had no idea how much time a task should take, what actions were involved, or which tools were essential and which were unnecessary. In other words, without any practical experience, these Managers were at my mercy for guidance.

The other issue that arises in organizations that do not promote from within, is that a disconnection develops between the "chiefs" and the "indians." The "worker bees" soon begin to understand that management lacks the practical knowledge necessary to efficiently manage. Fueled by obvious inefficiencies created by leadership lacking in practical understanding, a lack of respect begins to grow. Workers continually witness unnecessary and wasteful amounts of money "thrown" at issues which in reality require only nominal resources for efficient resolution. Corporate culture begins to suffer. Worker reaction to this farce may take the form of incessantly complaining, apathy, or worse, some may even "game" the system for personal gain.

The Peter Principle correctly indicates that management skills are not necessarily the same skills essential for mastering tasks. But assuming that a master practitioner or tradesman cannot manage is a dangerous and possibly expensive assumption. The self discipline, dedication, attention to detail, and communication skills necessary in all trades are also prerequisites for good management. Denying task masters the chance to advance to management, plants seeds of discontent that grow into divisive organizations. Employees must be given a chance to fail. By eliminating the possibly to fail, management takes away any possibility to succeed.

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