businessman in a suit with clown shoes sitting in a chair - example of promoting the wrong people

“The Peter Principle” is a term coined by Laurence J. Peter in 1969 to describe the recurring phenomenon of employees being promoted to – and often beyond – their highest level of competence. While hilariously illustrated in the comic strip Dilbert, both versions of the television show The Office, and the movie Office Space – the consequences for a small, entrepreneurial company aren’t funny at all.

The Fallout of Promoting the Wrong People

In fact, they can be disastrous. Problems caused by a handful of ineffective people in a company with 1,000 employees can be overcome – at the expense of their managers, peers or subordinates. But in a 15-person company that’s moving fast and working everyone at capacity, even one ineffective team member can be fatal.

Even so, it happens all the time. When a company goes from zero to 100 employees in 5-10 years, it’s almost impossible for its owners and leaders to be great at getting all the regular work done AND to be great at “people.” When the company needs more or different people, they don’t have the time, the resources, or the skills and experience to clearly define what they need, hire the right people, and then train and manage them properly. Instead they move fast, hire people they already know, turn ‘em loose, and hope everyone “figures it out.” Thus, the Peter Principle.

End the Peter Principle…For Good!

I’m saying this with certainty because I’ve done it myself. And I’ve seen many friends, clients and colleagues do it, too. If this sounds familiar, EOS® can help. The system offers a simple approach to clearly defining what a “great person” is in your unique organization. It provides a complete set of practical tools designed to help you find, engage and retain the right people – and to repel the wrong people.

Here are the tools, at a high level:

  1. Define your organization’s Core Values—3-7 words or phrases that describe the common attributes of the very best people in your company. Then use those Core Values to build and maintain the culture you want.
  2. Create an Accountability Chart™ to properly structure your company. At a high level and on one page, clearly define the roles and responsibilities of every “seat” in the organization.
  3. Use the People Analyzer™ and “GWC “to evaluate your people. These tools help you definitively determine whether or not employees are the “Right People” (those who share your Core Values) in the “Right Seat” (those that are consistently good at their jobs).
  4. Use “LMA” (Leadership + Management = Accountability) to help leaders, managers and supervisors lead and manage in a way that drives accountability throughout your company. This creates an environment in which accountable people thrive, while the non-accountable are uncomfortable and leave.

Taking these four steps and using these practical tools will take time. It may sound simple, but change of this magnitude is rarely easy. But when you’re frustrated by your people – including those promoted beyond their level of competence – it’s definitely worth it. Don’t just curse Laurence J. Peter under your breath. Consider taking these steps and using EOS Tools to strengthen your People Component, fill all your seats with “Right People in the Right Seats,” and banish the Peter Principle – once and for all.