Do Business Well

Young engineer who had earned straight A’s in school came to work at an environmental engineering company but was fired within a relatively short period of time. The reason? “He was brilliant at his work,” his manager told me, “but he couldn’t take direction. His supervisor would tell him how to do a design, and he’d do it his own way. When his supervisor would point out how the design didn’t conform to the specifications, he’d get defensive. He couldn’t take feedback—he acted as though it were a personal criticism.

“When other engineers would ask him to help, he’d turn them down, saying he was too busy with his own part of the project. He created so much animosity that when he needed some help, no one wanted to give it to him.”

High IQ and technical expertise can have a paradoxical effect among seemingly promising people who fail. In a study of once-successful managers who failed, most were technically brilliant.” And their technical skills were often the very reason they were promoted into management in the first place.

But once they reached higher positions, their technical strength became a liability: Arrogance led some to offend their peers by acting superior, others to micromanage subordinates—even those with better technical expertise.

This is the Peter Principle at work: People are promoted to their level of incompetence. A person who is promoted because of expertise (”He’s great with the numbers”) finds himself at a new level, where many or most duties revolve around managing people—not technical skill. This means the working world is peppered with bad bosses.

The Peter Principle does much to explain why so many people who are abrasive, thoughtless, and otherwise interpersonally inept are in so many positions of power in organizations everywhere. The classic mistake is assuming that if someone has a special expertise, it necessarily means they also have the ability to lead. “I call it the Michael Jordan effect,” Paul Robinson, director of Sandia National Laboratories, tells me. “I see it all the time in science labs: A top executive leaves and you immediately turn to the best scientist as the replacement.

“But it’s as if the Chicago Bulls lost a coach and appointed Michael Jordon to replace him. He’s a brilliant basketball player, of course, but the game comes so naturally to him that he may not be very good at coaching other players he probably never even thinks about how he does what he does. So how well are the Bulls going to do as a team when Michael Jordan is on the bench, not on the court? It’s the same with us—we need those outstanding scientists in the lab, not in the office.”

To avoid the problem, “We set up two tracks, recognizing that some people are excellent technical professionals and like their work, but terrible managers and dislike management as a career,” Ira Stepanian, retired CEO of BankBoston, told me. “Without the people skills they would never succeed at the top levels of management. We tried to spare them the failure of the Peter Principle by keeping them in a professional track.”

Again, the principle applies to jobs of every sort. Take, for example, Patrick McCarthy, the star sales associate at Nordstrom. Early in his career McCarthy was promoted to department manager—a post he left after a year and a half to return to sales.’ As he put it: “Sales was what I was good at and felt comfortable with.”

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