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Leaders – A product of Peter’s principle?

Krishnan Bangaruswamy

The other day I bumped into an old friend from college at the airport. It was such a pleasant surprise to meet him after almost 20 years. Though we had texted occasionally, we never really had a chance to meet up. It was such a refreshing thing to happen as we excitedly exchanged pleasantries and caught up about the good old days.

After close to a couple of hours of chatting about almost everything that we could think of, we moved our conversation to our jobs and careers. He related how the journey had been all these years. It was disheartening to hear about him not being able to become the head of the department.

He stated quite a bit about his ‘Incompetent’ boss and how he himself is a better candidate than his boss for the head of the function role. It was a tirade which quickly became an overload and at one juncture I had to ask him, ‘If he is as bad as you say, how did he get promoted as the Head?” to which he retorted ‘maybe he was better off in his previous roles until he became the Big Boss!

Later , on the flight back , I couldn’t help reflecting on the conversation. Maybe the chap, after all, had a point. As career oriented individuals, we may all grow to a level where we can no longer match the competence required for the role. I decided to do a little bit of research around this theory, and that is when I came across Peter’s principle.

The Peter principle is a concept in management theory formulated by educator Laurence J. Peter and published in 1969. It states that the selection of a candidate for a position is based on the candidate’s performance in their current role, rather than on abilities relevant to the intended role. Thus, employees only stop being promoted once they can no longer perform effectively, and “managers rise to the level of their incompetence”.

Simply put, Individuals in a hierarchy get promoted to the next level based on their performance at the current role. This promotion continues until about the time they reach a level where they are no longer competent to perform in their promoted role and eventually they stay put in it. The larger point being, they remain at this level, which is above the last level at which they were competent. Consequences

  • Limits organizational growth given the incompetence of the individual to perform their elevated leadership role.
  • We lose out on a competent individual from the previous role and there is a threat of another incompetent individual filling up the previous role
  • Not to mention about, a whole toxic culture that can gets build under and around the Leader (sub-ordinates, peers, etc) in the form of defense including Leathery, Cynicism and ‘Office Politics’
  • Importantly ,the Human Capital Management objectives of innovation and development of Individuals, Teams and Groups hits a road block as the Learning stops

On analysis, this can prove to be a major handicap for organizations. We might argue, that is the premise is being somewhat overstated as it is the natural way by which individuals and organizations evolve and so with the right training we can mould individuals to be successful in their roles. But the fact is, in spite of our effective succession planning and training intervention, there are always incompetent bosses and individuals who continue to prove Peter’s principle right!

I did a little more research to understand how we can beat Peter’s principle in organizations. There were a range of suggestions and recommendations including Adequate Skill Training, Effective Succession Planning, Demotion, etc. Clearly all these are effective ways albeit not always good enough. We require more options considering the complexity of expectations that arises with Leadership, going beyond the sphere of Time and scope.

Here are five more ways I can think of,


It would be a good idea for organizations to introduce one year promotion (4 quarters) to prepare individuals especially for the Middle and Senior management Leadership roles. In the first quarter, Not exactly an internal job moonlighting but, Individuals are expected to engage 4 working days in their competent current role and one working day in their future role that they are going to get elevated to.

Similarly for the next 3 quarters there can be a decrease in the number of working days in a week for the current role and a subsequent increase in the working days for the future role until a full fledged transition to the new role by end of the 4th quarter. The rationale behind such an approach is through the proven Blended learning concept of 70:20:10, which states 70% of the time we learn through our experience and challenging assignments, 20% through social learning and 10% through theoretical framework. Through the One year Promotion plan, opportunities are created for the individual to experience real time challenging work, learning through social relationships and through regular coursework and training in the form of workshops.

Such an approach will increase the Learning and the discretionary effort of an individual for a higher commitment and focus towards a future role. IN parallel the organization also establishes a TRUST level of believing / investing on the individual with balanced and relational Psychological contracting.

Progress review can happen at the end of each quarter and all possible developmental support including 360 degree feedback can be provided for the individuals. Based on the outcomes of every quarter, Individuals with the organization can even opt out of the program given that there is a continuity between the current and future role.


Harvard Business review had responded in the ”The Real Peter Principle: Promotion to Pain,” arguing that what really happens is that managers are promoted, not to their level of immutable incompetence, but to their level of anxiety and depression, which overwhelms their ambition and desire to succeed. If we go anything by that, then we need to ensure the right psychological balance and support is provided for the individuals who have been identified as High Potentials.

In the Big five Personality attributes needed for Leadership including Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism, the emotional stability (Neuroticism ) comes the closest to mediate and moderate the levels of Anxiety and Depression. Daniel Goleman in his book Emotional intelligence proved how Neuroticism can be used in the form of Self – Awareness, Social Awareness, Self Management and Relationship Management to overcome Anxiety, Depression and Anger.

The good news is, recent trends in the world of management training and development reflect renewed attention to the highly personal nature of leadership, in particular strategic leadership…current trends find emotional intelligence as a relevant and learnable leadership skill, intrinsic to the satisfactory execution of leadership.

So in Simple words, Emotional Intelligence is a MUST and this should be not just restricted for the high echelons but also for all the employees in the beginning of their career developmental journey.


Most often, Individuals push themselves for Promotion because of Peer pressure and to prove a point that they are not lesser than anyone else being considered for the role. There is almost and always a perception that those who do not get promoted are Incompetent. This has to change and HR has a role to play in this. It has to communicate this point effectively through its grades and bands, Policies and system, Rules and social components of the organization, though they may all not necessarily be linked up to Hierarchy, Designations and Authority but to Role Expertise and Value.

Again, this initiative calls for creative and innovative policies, one such policy can be: Two or three promotions over a certain band should earn an employee all the benefits and perks and importantly a status of being recognized as a Value creator irrespective of the promotions. This way they are not pressurized or motivated extrinsically on the long run.

The Key here would be to build an organizational recognition through Artefacts, Beliefs, Values and Positive Assumptions about what career success can mean to different people such as being Climbers, Experts, Influencers and Self- Realisers and how this gratification should be respected. Climbers being described as those who define success as climbing up the professional hierarchy ladder, Experts who enjoy success in achieving competence in their jobs and being recognized personally for being good, Influencers for whom success is defined as being able to do things that had a clear and positive effect, whatever their hierarchical position is, and Self-realisers for
whom success is based on achievement on their own terms for personal fulfillment, with a balance between work and home life. If the policies and practices of the company recognizes this, then it will propel towards the path of success. Dual career ladders are excellent vehicle for those talents who are not keen on the traditional management growth ladder.

On a side note, in order to motivate individuals to pursue their interest, it will not be a bad idea for HR to go back to its schoolbook principle model of Hertzberg’s Hygiene-Motivation, which reinstates the importance of Intrinsic motivation over extrinsic motivation. Apart from basic hygiene factors are taken care of, Individuals can be motivated intrinsically through a sense of meaning and purpose, a sense of competence, a sense of choice and progression. All of these contribute significantly in creating value for self and the organization.


An organization culture which fosters continuous learning and develops leadership qualities from early stages of careers can make a huge difference. One way of doing this can be through Distributive, Collective or shared leadership concepts. Distributed leadership is not something ‘done’ by an individual ‘to’ others, or a set of individual actions through which people contribute to a group or organization. it is a group activity that works through and within relationships, rather than individual action.

This can work very well in contemporary knowledge based organizations where the work is complex and has to be coordinated between multiple project teams. Because individuals and young project managers will face situations that require them to showcase their leadership qualities, leadership attributes can be developed among Junior and middle management by a fluid and emergent social process, while also learning from one’s own mistakes and those of others.

For this to happen real, Organizations’ should embrace innovative features such as Hierarchy being less authoritative but more distributed, Division of labor being less specialization in job but more expanded job role, Rule being more discretionary and relationship based , System directed towards change, and rewards oriented towards group performance. All of this is only possible with the right policies and practices and Human resources have an important role in designing the same.


The thing about organizational situation is that, it can be unique every time and that is the beauty of it. Blake-Mouton through his behavioral theory described how leaders can influence group members through certain behavior. He reinstated the need to be as a Team leader, which is a high ideal combination of Task and People concern.

Hersey and Blanchard’s Situational Leadership taught us how we can master situations with the right leadership approach such as Telling, Selling, Participating and Delegating. It is an effective way to manage and lead teams for effective outcomes based on team members’ willingness and ability levels.

Max landsberg complimented this through skill/will matrix, a practical coaching approach a leader might take. Fiedler’s contingency theory took another route stating that we do not have to change our leadership styles based on situations instead we can change the situations for effective outcomes. Known as Situational favorableness, it encouraged to change the situation through Leader-member relations, Power and task structure.

Path goal theory illustrated the way of a leader in removing obstacles up on his way. The fact of the matter is, There is no one size fit all solution. Every time for a leader, it can be unique and it can present something new and exciting. Like I mentioned earlier, that is the beauty of it and perhaps the best way would be to leave it to the judgement of the individual to perform the role of a leader, given the task,
situation and other considerations That being the case, it would be of Paramount importance for Leaders to be coached and mentored to unleash their fullest potential for peak performance.

The best way to do this would be to invest on continuous personal and professional development. The international coaching federation offers a range of professional coaching certification to all aspirants. The best thing of such programs are, that it not only develops you to coach others but also develops you as a leader in that due course. Such concepts, if implemented, should be complimented by policies that
go hand in hand to provide the right skill developmental programs. To quote, Continuous Professional development should be mandatory for all junior and middle management. Organizations can be creative and make 10% of the individual CTC linked to Continuous professional development and extend 10% from their end outside the CTC in the form of Human capital development policy.

From an organizational design and structure aspect, Holocracy is a practical way to allow individuals to experiment leadership attributes real time. It is absolutely our responsibility to have such models to exercise Autonomy and discretion that facilitates Decision making and Leadership. The larger point is, we prepare the young managers to develop leadership competence through the right support systems to align the growth of organizations, sectors, the country’s economy to be true leaders in future.

I wonder about the reactions I might gather from my aggrieved friend if I run these ideas through him. For all I know about him, He might say ‘Nothing will work with his boss!’ or he might simply dismiss all of it as some HR gibberish and question the practical aspect of it. All the ideas mentioned above may face its challenges when practically implemented with the interplay of many aspects and variables. Yes, not all that we plan and implement always works, but the failure would be ‘Not to try’.

As Human capital developers, we should aim to be better today than what we were yesterday. We need to continuously find new ways and have the courage to challenge and not be afraid to try new things to keep Peter at bay or even better, show him the way out!

Written by Krishnan Bangaruswamy.
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CEOWORLD magazine - Latest - CEO Insider - Leaders – A product of Peter’s principle?
Krishnan Bangaruswamy
Krishnan Bangaruswamy is Associate Vice President for Human Resources at Omega Healthcare Management Services Pvt. Ltd. He has spent over 16 years in Human Resources, Organizational Development, and Corporate Communication.

Krishnan Bangaruswamy is an opinion columnist for the CEOWORLD magazine. Connect with him through LinkedIn.