The Peter Principle [Book Summary]

The Peter Principle, published in 1969, is one of the most hilarious yet informative business books of all time. It's certainly a principle that we pay attention to at Binary.com when promoting individuals to team lead or department lead positions. As the saying goes, "Promote your best salesperson, gain a bad manager, and lose both!"

THE PETER PRINCIPLE, by Dr Laurence J. Peter and Raymond Hull

The Peter Principle is:  "In a hierarchy every employee tends to rise to his level of incompetence".

The principle founds a new science, hierarchiology, the study of hierarchies.

The principle is based on the fact that in a hierarchy, members are promoted so long as they work competently.  Indeed, when it is time to fill a vacancy higher up in the hierarchy, managers will choose to promote a person who is currently competent in their current job (no-one wants to promote a person who is already incompetent).  Sooner or later, an employee is promoted to a position at which he will no longer be competent (his "level of incompetence", also known as Peter's Plateau), and there he remains, enjoying no further promotions.

The employee's incompetence is not necessarily exposed as a result of the higher-ranking position being more difficult — simply, that job is different from the job in which the employee previously excelled, and thus requires different work skills, which the employee usually does not possess. For example, a factory worker's excellence in his job can earn him promotion to manager, at which point the skills that earned him his promotion no longer apply to his job.

Peter's Corollary is: "In time, every post tends to be occupied by an employee who is incompetent to carry out its duties".

You will rarely find, of course, a system in which every employee has reached his level of incompetence.  Work is accomplished by those employees who have not yet reached their level of incompetence.

The efficiency of a hierarchy is inversely proportional to its Maturity Quotient (M.Q.):

     No. of employees at level of incompetence   

MQ  =  ______________________________________   x  100

    Total no. of employees in the hierarchy

Obviously, when MQ reaches 100, no useful work will be accomplished at all.

Apparent exceptions

The following are apparent exceptions, but on closer examination they do not in fact violate the Principle:

The Percussive Sublimation - a hopelessly incompetent person, a bottleneck, that management kicks upstairs so as to get him out of the road.

The Lateral Arabesque - the incompetent employee is given a new and longer title and is moved to an office in a remote part of the building.

Peter's Inversion - e.g. amongst minor officials with no discretionary powers, one sees an obsessive concern with getting the forms filled out correctly, whether the forms serve any useful purpose or not.  No deviation, however slight, from the customary routine will be permitted.  The Peter's Invert (aka professional automaton) always obeys, never decides.  This, from the viewpoint of the hierarchy, is competence, so the Peter's Invert is eligible for promotion.  He will continue to rise unless some mischance places him in a post where he has to make decisions.  Here he will find his level of incompetence.

Hierarchal Exfoliation - the case of the brilliant, productive worker who not only wins no promotion, but is even dismissed from his post.  Indeed, in most hierarchies, super-competence is more objectionable than incompetence.  Ordinary incompetence is no cause for dismissal: it is simply a bar to promotion.  Super-competence often leads to dismissal because it disrupts the hierarchy and thereby violates the first commandment of hierarchal life: the hierarchy must be preserved.

The Paternal In-Step - this is when the owner of a family business brings in his son at a high level with the idea that in time, without rising through the ranks, he should take over the supreme command ("step into his father's shoes").  There are two ways this can happen:

  • An existing employee is dismissed/removed to make place for the in-stepper; or

  • A new position, with an impressive title, is created for the in-stepper.

Pull & promotion

Pull is "an employee's relationship - by blood, marriage or acquaintance - with a person above him in the hierarchy".  Winning promotion through Pull is a thing we all hate - in other people.

How to acquire Pull - here are five practical suggestions:

  1. Find a patron.

  2. Motivate the patron ("an unmotivated Patron is no Patron").  See that the Patron has something to gain by assisting you, or something to lose by not assisting you, to rise in the hierarchy.

  3. Get out from under - neither your own efforts, nor the Pull of your Patron, can help you if the next step above you is blocked by someone at his level of incompetence (a Super-incumbent).  This awkward situation is called Peter's Pretty Pass (Things have come to a pretty pass).  To move up the job hierarchy, you get out from under the Super-incumbent and move into a promotional channel that is not blocked.  This manoeuvre is called Peter's Circumambulation.

  4. Be flexible - there is only so much that any one Patron can do for you.  If your Patron cannot climb higher, then the Pullee must find another Patron who can.  So be prepared to switch your allegiance to another Patron of higher rank. "There's no Patron like a new Patron!"

  5. Obtain multiple patronage - "The combined Pull of several Patrons is the sum of their separate Pulls multiplied by the number of Patrons" (Hull's Theorem). The multiplication effect occurs because the Patrons talk among themselves and constantly reinforce in one another their opinions of your merits.  "Many a Patron makes a promotion".

Push & promotion

In established organisations, the downward pressure of the Seniority Factor nullifies the upward force of Push.  Pull is stronger than Push.  Pull often overcomes the Seniority Factor.  Push seldom does.  Never Push when you can Pull.

Push alone cannot extricate you from Peter's Pretty Pass.  Push alone will not enable you to successfully execute Peter's Circumambulation.  Using the Circumambulation without the aid of Pull simply makes superiors say, "He can't apply himself to anything for very long".

Signs and symptoms of Push - Push is sometimes manifested by an abnormal interest in study, vocational training and self-improvement courses.

Many pushful persons exhibit the Pseudo-Achievement Syndrome.  They suffer from complaints such as nervous breakdowns, peptic ulcers and insomnia.  This is not to be confused with Final Placement Syndrome (see later chapter) - they have not yet achieved final placement, and often have several ranks and several years of promotion ahead of them.  The difference between cases of Pseudo-Achievement Syndrome and Financial Placement Syndrome is called Peter's Nuance.

The pathology of "success"

Doctors report that the following complaints are common among their "successful" patients:  peptic ulcers, constipation, alcoholism, overeating and obesity, loss of appetite, hypertension, insomnia, chronic fatigue, skipped heartbeats, migraine headaches, tinnitus, sexual impotence, etc.

What the ordinary sociologist or physician calls "success", the hierarchiologist, of course, recognises as final placement.  The symptoms described are the Final Placement Syndrome.

Physicians typically make one of three medical errors in "treating" the patient:

  1. They attack the physical symptoms with medication or surgery, or good advice ("Don't work so hard");

  2. A second group of physicians, finding nothing organically wrong with a F.P.S. patient, will try to persuade him that his symptoms do not exist.  "There's really nothing wrong with you".

  3. Alternatively, psychotherapy is sometimes tried.  It seldom succeeds, because it can have no effect on the root cause of the F.P.S., which is the patient's vocational incompetence.

Non-medical indices of final placement

It is often useful to know who, in a hierarchy, has and has not achieved final placement.  Unfortunately, you cannot always get hold of an employee's medical record to see whether he has Financial Placement Syndrome or not.  So here are some signs which will guide you:

  • Abnormal Tabulology - after final placement, an employee is likely to adopt some unusual and highly significant arrangement of his desk.

  • Phonophilia - the employee rationalises his incompetence by complaining that he cannot keep in close enough touch with colleagues and subordinates.  To remedy this, he installs several telephones and other communication devices on his desk.

  • Papyrophobia - the papyrophobe cannot tolerate papers or books on his desk or, in extreme cases, anywhere in his office.

  • Papyromania - the exact opposite of papyrophobia - causes the employee to clutter his desk with piles of never-used papers and books.  He tries to mask his incompetence by giving the impression that he has too much to do.

  • Fileophilia - a mania for the precise arrangement and classification of papers.  By keeping himself so busy with rearranging, the fileophiliac prevents other people (and himself) from realising that he is accomplishing little or nothing of current importance.

  • Tabulatory Gigantism - an obsession with having a bigger desk than his colleagues.

  • Tabulophobia Privata - complete exclusion of desks from the office.  This symptom is observed only at the very highest hierarchal ranks.

Here are several interesting psychological manifestations of final placement:

  • Self-Pity - "Nobody really appreciates me", "Nobody co-operates with me" etc.

  • Auld Lang Syne Complex - a strong tendency to reminisce about the "good old days".

  • Rigor Cartis - an abnormal interest in the construction of organisation and flow charts, and a stubborn insistence upon routing every scrap of business in strict accordance with the lines and arrows of the chart.

  • Compulsive Alternation - some employees, on achieving final placement, try to mask their insecurity by keeping their subordinates always off balance.  The man's subordinates say, "You never know how to take him."

  • Teeter-Totter Syndrome - a complete inability to make the decisions appropriate to his rank.  He usually deals with the problems that come to him by keeping them in limbo until someone else makes a decision.  He gets rid of papers using:

    • The Downward Buckpass - papers are sent to a subordinate with the order, "Don't bother me with such trifles."

    • The Upward Buckpass - he examines the case until he finds some tiny point out of the ordinary which will justify sending it up to a higher level.

    • The Outward Buckpass - involves assembling a committee of his peers and following the decision of the majority.  A variant of this is The John Q. Public Diversion: send the papers to someone else who will conduct a survey to find out what the average citizen thinks about the matter.

  • Cachinatory Inertia - the habit of telling jokes instead of getting on with business.

  • Structurophilia - an obsessive concern with buildings rather than with the work that goes on inside them.  This can happen for example with politicians and university presidents.  

Health & happiness at Peter's Plateau - possibility or pipe dream?

Employees who have reached Peter's Plateau (their level of incompetence) can reach in several ways:

  • Face the Sordid Truth (Not Recommended!) - the employee realises consciously that he has achieved final placement.  But he tends to equate incompetence with laziness; he assumes he is not working hard enough, so he drives himself mercilessly.  He rapidly falls victim to Final Placement Syndrome.

  • Ignorance is Bliss - the employee never realises that he has reached his level of incompetence.  He keeps perpetually busy, never loses his expectation of further promotion, and so remains happy and healthy.  He does so by the process of Substitution: instead of carrying out the proper duties of his position, he substitutes them for some other set of duties, which he carries out to perfection.  Here are several Substitution techniques:

    • Technique #1: Perpetual Preparation - he busies himself with preliminary activities.  Here are some well-tried methods:

      • Confirm the need for action: "Better safe than sorry".  Spend sufficient time in confirming the need, and the need will disappear (Peter's Prognosis).

      • Study alternate methods: the Substitutor will want to be sure that he chooses the most efficient course of action.

      • Obtain expert advice.

      • First things first - minute, painstaking, time-consuming attention to every phase of preparation for action.

    • Technique #2: Side-issue specialisation - Look after the molehills and the mountains will look after themselves.

    • Technique #3: Image Replaces Performance - An ounce of image is worth a pound of performance (Peter's Placebo).  Peter's Placebo is well understood by politicians.

    • Technique #4: Utter Irrelevance - This is a daring technique:  the Utter Irrelevantist makes not the slightest pretense of doing his job.  For example, the president of a company who spends all of his time serving on the directorates of charitable organisations.

    • Technique #5: Ephemeral Administrology - Particularly in large, complex hierarchies, an incompetent senior employee can sometimes secure temporary appointment as acting director of another division.  He refrains from taking any significant action in the new post.  "I can't make that decision: we must leave that for the permanent director, whenever he is appointed".

    • Technique #6: Convergent Specialisation - Finding himself incompetent to carry out all the duties of his position, he simply ignores most of them and concentrates his attention and efforts on one small task.