Co-written in 1969 by Dr. Laurence J. Peter and Raymond Hull, The Peter Principle: Why Things Always Go Wrong was a slim, 167-page management self-help book that became a best seller. It also added a catch phrase to business management that has been regularly quoted over the three decades since it was first published. Some aspects of the theory were revived in the 1990s by the cynical business cartoon Dilbert by Scott Adams.
The anecdotal book, co-written by a Canadian writer and a British-born education professor, stated and restated in a number of ways the observation that Peter, who died in 1988, had made in his contact with store clerks, actors, business managers and other people he met outside the academic world he occupied. The Peter Principle: "In a hierarchy every employee tends to rise to his own level of incompetence."
The Peter Principle states that a good employee who is fulfilled doing a particular job may become a poor employee if promoted to a new position without evidence that he or she has the desire, ability and training to handle the job. Peter's observations and theories apply equally to the lowest level of undertalented employees and to top corporate officers who may spend their time on trivial matters because their well-promoted underlings are doing all the interesting work.
Peter's book was hailed as an explanation of why top producing salesmen sometimes make mediocre sales managers. It also explains today why founders of hot entrepreneurial companies frequently sell out to larger corporations because their skills at managing growing concerns have been overmatched by the task's requirements. The frustrated entrepreneurs sell out, then happily start building new companies, which was the strength they exhibited in the first place.
Peter and Hull filled the book with 19 other theories, including "Peter's Corollary," which says "In time, every post in a hierarchy tends to be occupied by an employee who is incompetent to carry out its duties." So, if that is true, how do corporations or any organizations accomplish anything? Peter's explanation is that all of the work is completed by people who have not yet reached their level of incompetence.
Peter also handles exceptions to his principle, such as the person who is "kicked upstairs," promoted from a job where he is incompetent to a job where he will be even more incompetent. In Peter's view this promotion was made so to keep other employees thinking that the person really does know what he is doing and that if he can be promoted, they can too. Such promotions are supposedly given to keep incompetents who know how the business operates from joining the competition.
One of the unexpected theories in the book is that people in charge of hierarchies dislike super-competents as much as they dislike incompetents. According to Peter, simple incompetence is not always a reason for dismissal from a company because the employee can probably find a job he can do. However, super-competents, the men and women who seem to know everything and do everything well at all levels in anticipation of always moving up, are more likely to be fired because they disrupt the hierarchy. In Peter's view, these people attract too much attention to themselves, worrying others in the organization so much that they derail the super-competent's climb to the top.
Peter's book unabashedly champions finding a patron within the organization who will provide the "pull" necessary to create job opportunities for the competent person wishing to advance. On the other hand, he thinks "push" strategies—that is, self-initiative and self-promotion—have been given too much emphasis. He claims that no amount of push can overcome an employee who is on the rung of the ladder above, and push might be interpreted by superiors as not having focus in the current job.
In another attack on the inertia of hierarchies, Peter asserts that higher ranks frequently dislike leaders coming from the lower ranks because they are usually disruptive to the hierarchy. Disruption translates to insubordination, which translates to incompetence. He says those whom most take as leaders are really followers moving to the head of the following crowd. They are obeying precedents set before them by still higher leaders, who do not want or need anyone changing the rules of how to run the organization.
What happens when a person rises to the top of an organization without reaching a level of incompetence Peter says is inevitable? He sometimes changes jobs to find other "challenges." Peter sites as examples military men who join industry or retired politicians who go into higher education. Peter's explanation is that these successful people did not spend enough time in their previous careers to find their own level of incompetence.
The other possibility for the top-level person is that they reach the top and then become almost instantly incompetent. Peter cites corporate board members who tell jokes rather than deal with company problems, or who spend their time rearranging reporting responsibilities instead of planning future successes.
The book has been criticized because it is not based on case studies of real companies. Many examples in the book are of teachers and principals, reflecting Peter's background as a former teacher and a college professor. Also betraying its academic origins is the book's frequent use of obscure and elevated jargon. Examples include "hierarchal exfoliation" (the firing of both super-competent and super-incompetent employees) and "Peter's Circumbendibus" (a "veiled" detour up the corporate ladder around a "super incumbent" who is entrenched in a comfortable staff position and who has no intention of moving up the ladder by promotion so an eager underling can fill his slot in the hierarchy).
However, the most powerful critique of the Peter Principle is that in many instances it's simply inaccurate. Critics charge that it completely ignores employees' potential to learn on the job and develop new competencies—ironic given that Peter was an education professor rather than a management scholar—even if they weren't well equipped for it when they assumed the position.
Blotnick, Srully. "The Peter Principle Revisited." Forbes, 9 September 1985.
Crainer, Stuart. "The Peter Principle." Management Today, October 1998.
Peter, Dr. Laurence J., and Raymond Hull. The Peter Principle. William Morrow & Company, 1969.
Schafer, Susan. "Plugged into the Peter Principle." Inc., 18 March 1997.