Whether a sharp lesson in situational irony or a conviction of humanity, in 1968, Dr. Lawrence J. Peter published The Peter Principle. His principle states, “in a hierarchy every employee tends to rise to his level of incompetence.” Although it leaves to the imagination the level of competence at the top of large hierarchies, or single-person businesses, like the Yeti and Santa Clause, if enough people believe it must be true. Forbes tackles the topic and offers final proof of truth here.

The Cream Rises Until it Sours

According to the article, “Three professors – Alan Benson of the University of Minnesota, Danielle Li of MIT and Kelly Shue of Yale – analyzed the performance of 53,035 sales employees at 214 American companies from 2005 to 2011. During that time, 1,531 of those sales reps were promoted to become sales managers.” Their conclusions were straightforward, “The data show that the best salespeople were more likely to a) be promoted and b) perform poorly as managers.”

Consistency is Bliss

Also, according to the study, “Consistent with the Peter Principle, we find that promotion decisions place more weight on current performance than would be justified if firms only tried to promote the best potential managers,…The most productive worker is not always the best candidate for manager, and yet firms are significantly more likely to promote top frontline sales workers into managerial positions. As a result, the performance of a new manager’s subordinates declines relatively more after the managerial position is filled by someone who was a strong salesperson prior to promotion.” Further, “To see that the best salespeople were becoming the worst sales managers was surprising.” reflects the article.

Avoiding the Pitfall

Of the many suggestions the Forbes article offers for avoiding the pitfall of The Peter Principle, one stands out above the rest – “If a top-selling colleague from your team just became your new boss, it might be time to move on.” Sales personnel who successfully transition to management enjoy salient qualities like being easy to cooperate with, proper mentorship from upper management, and a willingness to accept a healthy dose of humility in a new role. They also toss their copies of Glengarry Glen Ross and switch to decaf.

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