Everyone rises to their level of incompetence
In any hierarchy, employees are promoted based on performance in their current role. A great salesperson becomes a sales manager. A brilliant engineer becomes an engineering lead. But skills don't always transfer! The promotion continues until they reach a position where they are no longer competent—and there they stay, unable to earn another promotion.
Watch employees climb the corporate ladder based on their performance. Green = competent, Orange = struggling, Red = incompetent.
After multiple years, a significant portion of the organization is now stuck at their level of incompetence. Work gets done by those who haven't yet reached their limit!
"In time, every post tends to be occupied by an employee who is incompetent to carry out its duties."
"Work is accomplished by those employees who have not yet reached their level of incompetence."
Super-competence is more objectionable than incompetence—the system cannot tolerate those who disrupt it from below.
The wise employee may deliberately avoid promotion to stay in a role where they are competent and happy.
Why Things Always Go Wrong
1969
Laurence J. Peter and Raymond Hull wrote their book as satire—a humorous critique of organizational bureaucracy. But readers recognized the truth in it. The book became a bestseller, and "Peter Principle" entered the business lexicon.
In 2018, researchers at the National Bureau of Economic Research analyzed 214 firms and 53,000 sales employees. They found strong evidence: the best salespeople were most likely to be promoted to manager, but they became the worst managers. Sales performance was negatively correlated with managerial performance.
A top salesperson becomes sales manager. But selling (individual skill) differs from managing (coaching, delegating, motivating). They miss their sales numbers and can't develop their team.
The best programmer gets promoted to tech lead. But writing code differs from project management, stakeholder communication, and code review. The team stalls.
An inspiring teacher becomes principal. But classroom magic doesn't translate to budgets, policies, and politics. The school suffers while they struggle.
A renowned surgeon becomes department head. Technical brilliance doesn't prepare them for administration, conflict resolution, or institutional politics.
The most productive worker gets promoted to supervisor. But doing the work well is different from teaching, scheduling, and managing conflict.
Natural talent doesn't teach well. Michael Jordan struggled as a team owner. Wayne Gretzky had a losing coaching record. Playing ≠ leading.
Assess candidates for the competencies needed in the new role, not just performance in the current one. Use simulations and assessments.
Create culture where returning to a previous role isn't failure—it's finding the right fit. Some companies call it "right-sizing your role."
Let excellent engineers stay engineers at high pay without forcing them into management. Technical Fellow tracks honor expertise.
Offer temporary or "acting" roles before permanent promotion. If it doesn't work, return without embarrassment.
Invest in management training before promotion, not after. Don't assume high performers automatically know how to lead.