Peter Principle – Are you a victim or Perpetrator?

In business, many many people experience the “Peter Principle”, observing it in subordinates, peers and bosses.

Dr. Laurence J. Peter coined this phrase in his 1968 book, “The Peter Principle”. He identified that an employee’s failure to perform in a work role, which they had been promoted to, may not be due to incompetence on the part of that individual, but because the position actually required different abilities than those that the person possessed. The “mistake” was the promotion to the role, not the “fault” of the employee but that of the employer!

This nuance may have been forgotten, as the terminology is often used in the context of an inditement of the person who fails to perform as required.

The Hierarchies of Marketing model elaborates upon the observations of Dr. Peter applied to the field of Marketing. Globally, marketing leadership has decayed in the wake of many executives who hold that role when they are simply adequately trained to perform optimally.

Firefighter vs fire prevention

No one pats a fire prevention expert on the back… but when a fire happens, they all want to do is glorify the firefighter!

Good strategic management leads an organisation safely past errors of judgement and bad decisions, but executives who can avoid problems are too frequently ignored while operational “fire-fighters” are promoted to “fire-prevention” roles when they haven’t adequate ability.

Once operational people reach senior leadership roles, surrounded by other operational people who are similarly qualified “fire-fighters” and all lacking “fire-prevention” skills, strategic advisors are perceived to be superfluous.

In sports, the goal attackers are the popular heroes, while the quiet achievers are often the defenders and mid-field players, who set up the scorers with the chance to shine are also often ignored.

See my point? Human nature, I guess…

This happens MORE in business… with operational skills being the criteria for appointment to leadership roles when STRATEGIC skills and know-how are the talents that will be most valuable to the organisation.

The result is sub-optimal strategic leadership. Only extraordinary operational people will even listen to strategic advice.

All too often, marketing people have spent two, five, seven, or even 10 years in a marketing department.

Over that time, they may have developed skills in handling advertising and promotional operational activities; such as getting ads done, checking copy, making sure price lists are right, organising trade shows, etc. Finally, they find themselves promoted to the position of Marketing Manager… without an understanding of the definition of the word, “marketing”, let alone the science behind pricing, distribution and logistics, process design, new product development, market research, segmentation, market assessment, brand portfolio management, etc.

Consequently, they have been put in a position, as described by Dr. Peter, where they can’t possibly perform with the skills to optimize the marketing mix: They simply don’t have the skills.

This puts an unfair strain on the individual employee appointed to the role. It puts a “death curse” on the company responsible, which relies on that executive for their marketing expertise. The “mission impossible” is that the marketing management cannot be optimal and therefore must be in part, if not significantly, unproductive, wasteful or even destructive.

An Example of the Commercial Cost of the Peter Principle and Ignoring the Hierarchies of Marketing

A perfect example is a few years ago when a senior advertising executive of a global advertising agency was poached to become the CMO (Chief Marketing Officer) of her client’s company. This person, equipped with wonderful advertising skills but no qualifications in managing a marketing mix, went about pursuing an expensive investment into advertising, that she promised would generate massive sale growth and positive brand equity.

The promotional effort was a major investment which taxed the resources of her company. It was a radical and cutting-edge advertising campaign, with enormous production costs and a media plan that advertising experts were confident would achieve reach and frequency goals to succeed.

The TV ad was banned (it did not actually meet a number of legal and compliance issues).. The market reacted negatively.

The ex-advertising CMO was a victim of the Peter Principle. Her employer suffered because of it. She was sacked, and shareholders lost dividends. Pressure, stress and anxiety ripple through the company. Productivity dropped. Profits disappeared. Competitors swooped.

… all because the co-dependent, integrated dynamics of the 8Ps of Marketing were beyond the understanding of this “fire-fighting” executive, wrongly promoted to a “fire-prevention” role.

Define “Marketing” (few can).

A properly trained CMO has significant training in ALL aspects of marketing PLUS…

So, what do we learn from this?

Executive teams need to understand and adopt the need for access to a balanced talent pool in all tiers of the hierarchies of marketing if they have a hope in hell of actually optimising their marketing mix. An unbalanced marketing hierarchy will not deliver the best possible return on shareholders’ funds or satisfaction to employees, stakeholders, shareholders and trade partners.

The Hierarchies of Marketing model is a means to identify when there is a possible transition to a Peter principle scenario.

Extensive education in economics, law, accounting & financial management, psychology, market research, qualitative analysis, and more.

The Voice of Experience?

Believers will be pleased to note that research of 214 businesses to test the Peter principle in 2018 by a team of economists found the promotion of employees was consistent with the Peter principle.

An executive of a global office equipment organization, whose responsibility was to build from scratch a brand new marketing department, once said about the Hierarchies of Marketing model, “If I had read the Four Faces of Marketing before I built the marketing department for my company, it would have saved me three years of stress, angst and frustration!”

For those not familiar with the Hierarchies of Marketing model, there are two courses of action you can take.

One is to absorb the diagram, above. The other is to read the book, “The Four Faces of Marketing”, now in its second edition, available from Bookboon. You can download it either free, on a trial basis to try the publishers’ vast array of books or pay a nominal fee. Here’s the link. https://bookboon.com/en/the-four-faces-of-marketing-ebook