The Scientific Reason Why Your Boss Really is an Idiot

Watch on YouTube: https://youtu.be/1aJunojf2eM
Is your boss the dumbest human being alive? You may think it’s just you, but it’s not. From middle management to executive leadership, this is actually the standard situation across the board. Everyone’s boss is dumb, and there’s a legitimate explanation for it. It’s called the Peter Principle, and we’re about to table this now for the intro and then circle back to do a deep dive and run the numbers and then throw corporate America under the bus because I have a hard stop at 11:30.
I’m Kevin Lankes, and I’m your host for our go to market strategy to uncover the glaring insanity of corporate America’s obsession with shitty leadership.
By the way, and this is completely unrelated to today’s topic, of course, but if I used to work for you in the last say, four years or so, I still have all your account logins and definitely still have access to all your social media accounts and in some cases, your payment information too. Not only that, but I get all of your notifications, all your messages from clients and prospective clients, and I have the ability to see and respond to all of them. I get the endless spam messages that one company colleague once fell for and gave over all our login info like an 80-year-old meemaw after emailing me in a panic about it and not believing that it wasn’t real. Because yeah, why would you promote people into leadership on the marketing team who know anything about marketing?
Which brings us to the Peter Principle. I mean in a completely unrelated way to all of that, of course.
The Peter Principle was first defined by Dr. Laurence Peter. So unfortunately it’s named after the inventor of the concept because it would be much funnier if he’d named it after some idiot he once worked for. Dr. Laurence Peter was a professor, organizational theorist, and author. In 1969 he published a groundbreaking book on workplace management that would inject fear into the hearts of corporate executives everywhere. It was called The Peter Principle.
The Peter Principle’s main claim is that companies generally promote employees who are successful in their current role, which sounds reasonable from the outset. Success is rewarded with promotions in America, that’s just the work culture that we have now. We don’t generally get a lot of other perks, like there are no more bonuses or benefits or parking spaces or jelly of the month club memberships. The big problem with this is that top performers at one particular set of job duties won’t necessarily be capable employees at the next level, especially if the next level is management. And so company culture is really just setting people up to serve in a role they aren’t qualified for. The Peter Principle suggests that every employee will eventually be promoted into a position for which they are incompetent. Dr. Peter termed this position an employee’s “final placement.”
Dr. Peter used an example to demonstrate his point by taking an adage and twisting it a bit on its head. Instead of “the cream rises to the top,” he rephrased the idea into “the cream rises until it sours.”
Dr. Peter also clarified that this has long-term implications for an organization, because employees tend to remain in positions they aren’t qualified for and can’t do because incompetence is rarely enough reason on its own to fire someone.
What’s even worse is that the Peter Principle has a cascade effect built in. Its incompetence is actually infectious, and it reaches out through the ranks and affects every employee it makes contact with. Because when someone is promoted to a position they aren’t able to do effectively, say in management, then that ineffective management results in employees who don’t have clear direction at best, and make all kinds of errors and cause major headaches for the company at worst. Where poor management exists, and direct reports are also making mistakes, or at least have their mistakes go unnoticed, it can breed an environment of stress, chaos, apathy, or all of the above.
And these things might not be caught and can’t be easily corrected while an incompetent leader is at the helm. Things like quality control, consistency, and final say responsibilities are compromised when someone who doesn’t have enough education or background information to do their job correctly is in charge of a team.
Inevitably, an organization like this will get to a point where turnover skyrockets because everyone who knows what they’re doing is clamoring for the exit. That leaves only less capable workers to promote and prove the Peter Principle correct even more. Anyone still standing at the company by that time with half a brain will just completely resent the leadership team for allowing all of this to happen. And in addition, they’re stuck with all the actually work because they’re the only people who are able to do it.
This is supported by a quote from the book, The Peter Principle that states, "In a hierarchy every employee tends to rise to his level of incompetence... [I]n 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." Yeah, and these people are gonna be burned out and pissed off.
I’ve worked in companies where people got drunk at the holiday party and talked shit about the C-suite while the CEO was giving his rambling end-of-year pep talk. People get really emboldened when they feel put upon, and employees who suffer under incompetent leadership who are hilariously brutal at work parties are canaries in the coal mine. They’re indications of just how bad things have gotten. But with Peter Principle politics enmeshed in the system, leaders are unlikely to see that clearly, because they can’t. They either think things are going just fine or that their ideas are going to turn things around, and they can’t see their own incompetence through their incompetence.
But it gets even worse. There’s an addendum to the Peter Principle. It’s called the Peter Corollary. It states that eventually, every single position within a company will be staffed by incompetent people who don’t know how to do their jobs.
This actually sounds more like Peter’s endgame to me. I think it could make a truly blockbuster new installment of Marvel’s Avengers saga. Avengers Endgame: of the Peter Principle and its Corollary Extension. I mean it just right rolls off the tongue.
Three economists tested out the Peter Principle in 2018 to see if it held any water. Alan Benson, Danielle Li, and Kelly Shue weren’t content with the fact that the theory sounded plausible, they wanted empirical evidence, as they should, and they sought out to become the first research team to get it. The trio examined 214 sales firms, specifically looking at the performance of salespeople, the performance of sales management, and the likelihood that success at sales equated to gaining promotions. And then, how successful someone promoted into sales management had become.
They took data from sales tools and software and internal company stats to find out how well an individual salesperson was performing. And they found that at each higher sales rank, there was a 15% further chance that a specific salesperson would be promoted. This seemed to corroborate pretty clearly that better individual performance were rewarded with promotions above the level of their colleagues.
So yes, instead of actually deliberately seeking out, training and developing, and promoting the employees that are best suited to the next higher role, companies really are just promoting the employees that get the most sales. Even though they’re taking them away from what they’re actually good at and plopping them into a position that nobody knows they’ll be any good at. Not only that, the data showed that companies actually underweighted qualities and professional traits that indicated an employee would make a very good manager. Those they just ignored. Let’s just put Jake in, Jake talks good.
Surprising absolutely no one, the research team also found that promoted employees in sales firms are very clearly not equipped to handle the job responsibilities at the next level. When a particular high-flyin salesperson was promoted to management, everybody suffered. It didn’t matter whether that successful salesperson was slotted into management in their own team or a different team, regardless, what happened was that at each higher sales rank there was a 7.5% decline in the success of every single one of that person’s subordinates. Not only does the data seem to suggest that successful employees are not automatically good candidates for management, it seems to specifically say that better salespeople are actually worse managers in every case.
So it turns out your boss actually is an idiot. At worst, that is. At best, they simply just don’t know how to do their job. Because jobs involve actual skill sets that have to be acquired through education and experience. Most positions these days are highly technical. I can personally attest, at least anecdotally, that sales organizations are truly the worst at organizational leadership. One of my own theories is that it’s due to the fact that sales is a soft skill that’s more about feelings and appearances than actual hard skill sets. Good salespeople are overconfident overtalkers, and a lot of the time they really aren’t actually saying anything coherent at all. Once you plop a salesperson in a role with any actual responsibility beyond good vibes, they flounder like a manatee in a monsoon. It’s all bellowing and blubber. It’s gross, you have to hide your eyes. Look away kids, you’re much too young!
A more recent companion principle developed by academic and author Tom Schuller takes a Feminist twist on the Peter Principle. Called the Paula Principle, Schuller’s book states that, in direct opposition to the men who are typically promoted up to their level of incompetence, women tend to work in positions well below their own level of competence. There are a lot of proposed reasons for this in the data, and some of them are things like well-documented gender discrimination, less extensive personal networks, and an inability to pursue professional opportunities because of domestic responsibilities.
Okay, so it turns out the Peter Principle is real and backed up by data. What can any of us actually do about it? It comes down to company culture and organizational competence in a lot of cases. As an employee, it’s difficult to influence company culture by yourself, as that often comes from the top, and these Peter Principled ass clowns who sit in those seats like the smell of their own farts too much to listen to other people’s opinions, even though they desperately need to because factually speaking they have no idea what they’re doing.
But if you can eke out some influence, or you work in HR or have that creepy new 1984-inspired title of Chief People Officer, then there are some things you can encourage your company to do that will make everyone more successful and that are backed by the available data.
One thing is that companies can reward successful employees with things other than promotions. They can give out raises, bonuses, parking spots, gas mileage, public transportation reimbursement, instant pot recipes, whatever. But that way they aren’t sabotaging their own company’s future by putting dumbasses who talk good into roles they wouldn’t be qualified for in a million years. And then those same employees don’t feel pressured into taking promotions they aren’t qualified for because it’s the only way to get ahead where they are.
Another thing is that the organizational hierarchy can erect multiple job tracks for each department. Some companies are already doing this successfully. For example, In IT there can be a technical track and a managerial track. That way, great employees can continue up the ladder without having to move into management, and those who are really good managers can hop on that ladder without having to be the absolute most productive at any one arbitrary task.
If an organization has gotten to the point where too many employees are in their final placement, or certain employees need to be dealt with that are holding up key operations, then there are solutions to that, too.
One is demotions. Ideally, an employee needs to be brought back down to a level of competence. Unfortunately, there’s a massive stigma of failure attached to this because most people can’t simply admit that they don’t know everything, or in the case of the promoting manager, admit when they were wrong. If we could get around that though, we could have a sane organization wherein everyone was totally cool with trying things out and readjusting if they simply didn’t go very well. It should just all be okay. We’re all people, just trying to figure things out. There’s nothing wrong with that.
But corporate culture mostly doesn’t allow for sensible, no-strings-attached trial and error, so another solution proposed by Dr. Peter to fight the effects of the Peter Principle is a move called the lateral arabesque. The lateral arabesque is a kind of promotion that companies can bequeath to a troublesome employee that will actually demote them without them being aware of the demotion. It’s more of a lateral move, to a different team or department, that will simply get them out of the way of where the sausage is being made so they can’t screw it up anymore. A lateral arabesque often comes with decreased job duties and responsibilities as well.
Alright, so we know the Peter Principle is real and we know how to deal with it. Now we just have to sit back and wait while corporate leadership becomes self-aware and self-reflective and sanely accepts reasonable solutions backed by empirical data. I for one will not be holding my breath.
Unfortunately people have to have jobs to live, and so companies really owe it to the public good to not keep sabotaging themselves. If corporate leadership keeps running their own best interests into the ground, everyone else is going down with them. But they’ll get bailed out and we won’t. So we need to work from the ground up to make the situation better for everyone. Let’s do some f*cking good about corporate culture in America. I’ll see you in the next one.
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