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Managing to Make a Difference by Larry Sternberg

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Chapter 39Avoid the Peter Principle

In 1969, Laurence Peter and Raymond Hull wrote a wonderful book titled, The Peter Principle: Why Things Always Go Wrong. They pointed out that high individual performance is not evidence of potential to be a great supervisor. They observed that companies that base promotions on performance in the current job create a system in which all managers eventually rise to their level of incompetence.

The solution to this dilemma begins with the insight that there is a difference between performance in the current role and potential for high performance in the next step up the ladder because different roles require different talents and skills. To give a specific example, the role of sales manager requires different talents and skills from the role of sales representative. But, as Peter observed, the number one sales rep most often gets promoted to sales manager. Often—sadly, very often in the world of sales—the newly promoted individual is not a good manager. The company suffers a double whammy. They have taken their best sales rep off the playing field and they have given the team a poor manager. This is not a formula to build an extraordinary team.

Just as putting someone in a bad fit has undesirable consequences, efforts to avoid the Peter Principle can also bring unpleasant consequences. When ...

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