What happens when we promote staff to management positions just because they’re good at their jobs? A look into an alternative option.

How many leaders have you worked for who’ve been pretty lousy at actually managing people?

If you’re wondering why, think about why they were given that position in the first place. Was it because they were senior and management was the only available next step? Was it because they’re a fantastic [insert profession here] and their reward for being a great [blank] was to manage a whole team of [blanks]?

It’s not uncommon for the answer to both of those questions to be ‘yes’. This is a leadership problem that’s been around for a long while. It’s called the Peter Principle, a theory that started out as a joke about promoting staff purely for being competent in their existing role, but ended up having some merit. Published in the1969 book The Peter Principle, by Dr Laurence Peter and Raymond Hull, the idea is that people continue to rise in the ranks until they reach their “level of incompetence”.

A potential solution to this problem has also been around for some time too. It’s called the two-track career growth model. It gives high potential employees another progression path: management or specialist. 

An early adopter of this was chemical sales firm Du Pont. In the 1940s, it created a dedicated arm of its business for technicians to focus on their work while also gaining more money and prestige within the company. In the 80s, innovative companies like Microsoft and 3M followed suit. These days, it’s common practice for big companies like Facebook and IBM. 

Putting the theory to the test

In a 2018 research paper, Promotions and the Peter Principle, Yale professors Alan Benson, Danielle Li and Kelly Shue took a deeper look into the Peter Principle. By analysing over 50,000 sales employees from over 200 US companies, they noticed that of the 1,531 people who were promoted between 2005-2011, the majority were the best salespeople of the bunch. But they went on to be poor managers.

“This evidence is consistent with the Peter Principle and the idea that firms promote based upon current job performance at the expense of promoting the best potential managers,” the researchers say.

“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.”

This isn’t to say that salespeople don’t make for good managers. Many would have the right skills, or could gain them through training, to elevate to a leadership role. It’s just a good example of how the Peter Principle can hurt a business. 

As Rodd Wagner says on the topic in Forbes, “A company that relies too heavily on sales as a criterion for promotion pays twice for the mistake. Removing a high-performing sales associate from the line potentially upsets her client relationships and puts the revenue of those accounts in jeopardy. The team newly under [their] direction is at greater risk of under-performing as [they struggle] in a role that demands quite different abilities.”

A great retention tool

While it’s incredibly important to think about those who will run your company in the future, you don’t want to ignore your other top performers in the process. You also don’t want to be in a position where your managers are also your only specialists. Overburdening staff with a huge workload is a sure-fire way to burnout your best people and under resource those working below them.

Strategies like two-track career progression can be great for retention. We know from Gartner research that career growth opportunities are important to most staff. If there is an alternative path for them, staff who have no interest in management responsibilities will still have a reason to stick with your organisation.

It helps with retention on the other end too. If people in your business are accepting a leadership position because it’s the only way to get a pay increase, the people they become responsible for are likely to suffer. It could drive them to look for employment elsewhere.

More prestige for experts

In an article for Quartz, Pamela Vaughn talks about taking the specialist path (or ‘individual contributor role’) at HubSpot, a company the develops marketing and sales products, and how it changed her career. She describes it as being pivotal. It meant she could take on more responsibility and make business critical decisions all while requiring less oversight. She was thriving.

“It’s impossible to create a one-size-fits all description of what individual contributors should do to get to the next stage in their careers. So I kind of just made it up as I went along. Instead of trying to map out a career path and worrying about where I was going to be in five or ten years, I followed my interests and tried not to worry too much about measuring my success in traditional ways such as title changes and promotion announcements.” .

Vaughn says while she wasn’t technically a leader in the business, she was recognised as an expert. As a result, she was sought out for advice from her peers and offered speaking opportunities at industry conferences.

“Supporting a two-track career growth model can lead to higher quality business results,” she says. “If every experienced individual contributor takes the managerial route to career growth, companies lose their individual contributors right when they’re at the point in their careers where they’ve developed the expertise necessary to tackle those really challenging, high-stakes projects.”

Promote for the future

If you’re going to offer two career streams, it’s important your succession management isn’t just focused on the upper layers of your business. 

In a PwC research paper on succession planning, authors Todd Hoffman and Stanley Womack make this point: “Beyond that first or second organisational layer, the succession planning team typically has only minimal awareness of the employees who actually produce results for the company – the ‘pivotal talent’ that makes the organisation successful.”

They say that many companies don’t have an in-depth understanding of the skills this ‘invisible talent’ needs in order to “round out their development and make them more capable of handling more responsibility in the future”.

Hoffman and Womack highlight five elements that go into a successful succession plan. They’re referring to the energy industry specifically with these tips, but they can be applied elsewhere.

• Think beyond hiring for today. Consider the changing landscape of the workplace. What skills will be required in the next ten years and will these emerging leaders be able to fulfill them?

• Make sure senior management owns the succession plan. “They should be involved in coaching and development of talent – beyond just their immediate reports. The leadership team should have some level of accountability, too, with compensation tied in part to succession planning metrics.”

• Continuously assess potential leadership talent. Once you’ve identified a potential leadership fit, don’t leave it at that. Check in with them at strategic points to make sure they’re on the right track. Identify skills gaps and use training tools to fill them. 

• Link it with other talent management practices. Matching an employee’s progression with their salary, job titles, rewards and recognition is critical to job satisfaction.

• Monitor your efforts. As you do when introducing new things to your business, measure key metrics and make tweaks and adjustments as you go.

Having two separate progression streams doesn’t necessarily mean there can’t be crossover at a future point. As Vaughn points out, if she were to want to move into a management position, many of the skills that she’s collected along the way as an individual contributor would come in handy. The important thing is showing your staff that they’re valued, even if they don’t have the desire (or capability), to climb the management ladder.

Does your organisation offer two different progression streams? If so, tell us about it in the comments section.