Inefficiency: The Reasons Why

The Context Fred is a very accomplished sales guy. He hits or exceeds his numbers consistently. He builds relationships with his customers. He does his paper work accurately and on time. He keeps his boss informed about his comings and goings.

Fred would be How Corporations Fail their Customers diagnosed as a competent, motivated, self-reliant achiever. The best way to deal with Fred is to use a Delegating leader style. His boss would meet with Fred occasionally to get the big picture, check-in and ask Fred whether he needed anything from the company or his boss. Fred feels connected and motivated to do what he does best – make sales.

A new position of sales manager for a large region has just opened up.There are:

12 sales people who report to the manager.

  • One sales guy is just three months into the job.
  • Sally has been doing sales for 5 years and is a top performer.
  • Five of the sales people are consistently not meeting their numbers.
  • One maverick just does whatever he feels like doing while making his numbers. He is a disruptive pain in the butt to work with.
  • Four of the sales people are performing well but are disgruntled with a lack of leadership on the sales team.
  • Although they all operate semi-independently they need to meet quarterly to exchange information, review the environment of business and get clear about company strategy. The have met once in the last year.

Bringing Out Fred’s Genius George, the VP of Sales, after discussions with Fred, promotes Fred into the manager position. Fred is excited but very apprehensive. He is unsure about getting into this new role. It fits into his ambitious career plans but he’s not sure how to start. Fred, being independent and a high performer, does not share his concerns. He projects an image of self-confidence. If George continues to use the same leader style with Fred – Delegating — poor Fred is likely to join that infamous band of great sales guys who have been promoted to being a failed sales manager who succumbed to “The Peter Principle.”

The Peter Principle The Peter Principle states that “In a hierarchy every employee tends to rise to his or her level of incompetence.”Formulated by Dr. Laurence J. Peter and Raymond Hull in their 1968 book The Peter Principle, a humorous treatise that also introduced the “salutary science of Hierarchiology.”

The so-called principle holds that in a hierarchy, members are promoted so long as they work competently. Sooner or later they are promoted to a position at which they are no longer competent or motivated.

Peter’s corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out his duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence”.


Inefficiency: The Reasons Why
Scroll to top