By Shane Parrish
April 20, 2015
IDEAS
Shane Parrish writes Farnam Street

If you’ve ever worked in an organization, you’ve no doubt come across someone in senior management and asked yourself how they ever got promoted.

The Peter Principle, coined by Dr. Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, contends that, in a hierarchy, people are sooner or later promoted to positions which they are no longer skilled to handle. This is their “level of incompetence.” This is where they stay.

James March offers some compelling insight into why this happens.

In his book High Output Management, Andy Grove points out that this is largely unavoidable because there is no way to know a priori at what point the person will be incapable of handling further promotions.

In The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers Ben Horowitz discusses the Law of Crappy People.

Horowitz suggests the best way to overcome this is with a properly constructed and disciplined hiring process.

Most management teams I’ve worked with spend too little time on promotions, which encourages politics. Employees see gaps in the process and focus on exploiting them. Another big mistake is hiring by consensus, which leads to hiring for a lack of weakness rather than a strength. This kills organizations.

This piece originally appeared on Farnam Street.

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