The Peter Principle, first published in 1968 by Laurence J. Peter, is the premise that, in a hierarchy, people rise to the level of their incompetence. That is, there’s a tendency to promote people people into jobs for which they are not qualified, and which they cannot do well. Dr. Peter (jokingly?) claimed his principle is “the key to an understanding of the whole structure of civilization.” And while the original formulation of the Peter Principle was a satirical exercise, it does play out in real life. In the political realm, this combination of power and incompetence is no laughing matter.
The current administration, like those past, faces unfavorable ratings and at least vague distrust of too much government power and too few sound strategies. Even the most ardent fans of MAGA are beginning to suffer cognitive dissonance, and it’s not hard to see why. According to Politico, “only about a third of voters said they approve of the GOP’s handling of the economy.” Jeffrey Sonnenfeld, a professor in the Yale School of Management who consults with America’s top CEOs, summarized the business community’s response to this Administration as “universal revulsion.”
So, with the Peter Principle in mind, let’s briefly discuss what management entails and why incompetence at our nation’s capital is a cause for concern.
Competencies and Capabilities
Organizations are typically structured according to business functions and levels of management. Top-level managers, such as those in the C-Suite, are primarily concerned with corporate culture and establishing strategic plans. Essentially, those at the top determine the mission and vision for an organization and set goals that align with the core values and purpose of a firm. Conceptual skills are what matter most at the top rungs of management, which is in stark contrast to that which is required of lower-level managers.
Lower-level managers are engaged in supervisory management and operational planning. Managers at this level focus on day-to-day matters and tend to be task-oriented, which is why technical skills are of utmost importance. Supervisors must be ready to step in whenever necessary to keep team performance on target.
Clearly, what is needed from managers will inevitably vary according to the organization and leadership status. Success in one position, therefore, does not guarantee success in a higher position. To combat the Peter Principle, promotions should never be solely based on past outcomes or current performance. Instead, experience and competencies should be prioritized, with consideration for market conditions, industry practices, and organizational needs.
Knowledge and Know-How
Management is multifaceted, and when those in power lack the skills necessary, disarray is sure to follow — unless the incompetence of those at the top renders them inept to perform altogether. And this is the premise of The Dilbert Principle.
Inspired by the Peter Principle, Dilbert comic strip creator Scott Adams introduced his own satirical take on the incompetence of upper levels of management. He posited that, for some organizations, it was best to have an ill-equipped manager at higher levels so that those in power would be useless and unable to impede the productivity of the firm. Adams is quoted as saying “I wrote The Dilbert Principle around the concept that in many cases the least competent, least smart people are promoted, simply because they’re the ones you don’t want doing actual work.”
Given our current state of affairs, the Dilbert Principle seems somewhat preferable for politics today. If the highest federal authority is entirely ineffective, power would be decentralized. By default, those closest to the work would be in charge, whether of conservation initiatives or community-based programs. And this type of arrangement would likely be of interest to those who are fans of Friedrich Hayek’s work on the knowledge problem.
Hayek’s article, The Use of Knowledge in Society, published in 1945, notes that “The economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place.” And, as such, “The ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them.” Hayek goes on to warn that “We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization.” And, as with many things, Hayek is right.
Today’s modern businesses profit from systems which are polycentric – the delegation of tasks and dissemination of power can make a firm agile, innovative, and responsive to local needs. But polycentricity doesn’t obviate the need for organizations for a clear chain of command. Indeed, organizational members benefit from knowing how best to direct resources, provide guidance, and solicit support.
Successful organizations require a clear mission, sound strategies, engaged employees, and a strong commitment to its customer base – and management plays a big part in all these matters. Unfortunately, it is in these areas that our nation’s top officials seem to be lacking.
The current administration’s disregard for protocols, its dismantling of institutions, deflecting from major mishaps, dampening of dissent, disrespect for business autonomy, defaming of the rule of law and due process, and distribution of positions based on favors and camaraderie rather than merit and experience, the demolition of America’s relations with allied nations, the devaluing of America’s reputation on a global scale – these are all worrisome matters. And it seems Thomas Sowell’s words of wisdom perfectly convey the situation in which we find ourselves:
One of the painfully sobering realizations that come from reading history is the utter incompetence that is possible among leaders of whole nations and empires — and the blind faith that such leaders can nevertheless inspire among the people who are enthralled by their words or their posturing.
The Peter Principle is real and Dr. Peter’s own words never rang more true, “You will see that in every hierarchy the cream rises until it sours.”