The Peter Principle: Why Things Always Go Wrong

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The Peter Principle, by Dr. Laurence J. Peter and Raymond Hull

“I don’t know whether the world is run by smart people who are putting is on, or imbeciles who really mean it.”1

This classic satire of modern management is, of course, largely correct and — but for some rather dated scenarios and value judgments — remains highly relevant to explain the mess of modern middle management.

Re can re-dress two of its central concepts in terms a millennial might understand: the hierarchy, and the Peter Principle itself, that in a hierarchy, everyone tends to rises to one’s own level of incompetence.[1]

Hierarchy

A hierarchy is a social collective that, at some point, spontaneously gathered and self-organised to pursue a common purpose, and in doing so created its own autonomous reason for being, quite independent of the satisfaction of the purpose. A contemporary snowflake might recognise it as a power structure. That spontaneity is a kind of necessary condition for the formation of a hierarchy, but once established, it quickly withers, and the self-organisation of the hierarchy — at the hands of those at the top of it — takes over. The predominating mission of the hierarchy becomes not the pursuit of the original purpose — such as it is, it may well change quite markedly over time — but the defence of the hierarchy itself. Thus, the first commandment of hierarchical life: the hierarchy must be preserved.

Rising to incompetence as a form of natural selection

Consider the underlying formulation of evolution by natural selection:

if useful variations occur when an organism breeds, individuals with those variations will have a better chance of survival than those without and their own offspring will also be more likely to have those same useful variations

Of course the complication is that genetic features which are useful at this point in evolutionary history will not always be so useful at at that one.

Now if we substitute “breeding” for “promotion”, we see that, in a population of workers in a hierarchy, those with traits that are useful for promotion — note, it is for “promotion”, not “once promoted” — will tend to fare better than those that do not. Traits “useful for promotion” can only be judged from traits observable at one’s current rank — basic competencies, in other words — so those most competent at their current role will be the ones suitable for promotion. If they turn out to be competent at their promoted role, too, they will remain in the game for onward promotion, they remain in the upward flow; if they don’t —if they are bad at it — they will get stuck. Hence the “Peter Principle”, which on this read is as self-evidently, mathematically true[2] as is evolution by natural selection.

As with evolution, the trick is understanding what is “fitness”, or “competence”. This is judged not in terms of the original common purpose, and is certainly not passed upon by a jury of omnibus riders motivated by prudence, neighbourliness and circumspection, but is assessed, gammily, by the needs of the hierarchy, from the point of view of those further up it. The name of the game, in other words, is preserving the hierarchy.

In their eyes, leadership potential is insubordination, and insubordination is incompetence. Good followers do not become good leaders.

Once you understand this, the breathtaking mediocrity of large organisations ceases to be a mystery: what is a mystery is how organisations produce anything of worth or merit at all.

The mathematics of incompetence

As formulated by the authors, in the same way the it does with infinity:

Incompetence plus incompetence equals incompetence.

But this doesn’t quite capture it for, as we know, out of this summed, universal, irreducible incompetence somehow comes significant value. This is the singular wonder of modern global capitalism: how something steered, collectively, by such a bunch of morons can produce anything worthwhile at all. And clearly, persistently, reliably and notwithstanding the byproducts and idiotic externalities it generates,[3] it does.

See also

References

  1. I have wokified this a little bit from its 1969 formulation; the key change is that it is not just employees, but anyone in a hierarchy. This is a consequence of the agency problem.
  2. mathematically, not scientifically. Scientific truths aren’t allowed to be self-evident. See falsifiability.
  3. The human resources military industrial complex, for example, seems calculated specifically to do nothing but frustrate the tenets of basic common sense and good judgment, yet is the most powerful infrastructure component of any modern corporation.