The Peter Principle Isn't Just Real, It's Costly(nber.org)
nber.org
The Peter Principle Isn't Just Real, It's Costly
http://www.nber.org/digest/may18/w24343.shtml
50 comments
> Taking "is good at IC duties" as the measure for "should lead a team of ICs" is sloppy.
Yeah, but the flip side is that "has an MBA" is equally sloppy. Anybody who's ever had a paper manager that "doesn't know their ass from a hole in the ground" knows that while hiring an MBA might get you someone who is good enough at managing people, if they have no understanding of the core business -- or worse, no capacity to understand the core business -- then they can't lead.
Leadership and management are two very different things just like leadership and expertise or management and expertise are two very different things.
Yeah, but the flip side is that "has an MBA" is equally sloppy. Anybody who's ever had a paper manager that "doesn't know their ass from a hole in the ground" knows that while hiring an MBA might get you someone who is good enough at managing people, if they have no understanding of the core business -- or worse, no capacity to understand the core business -- then they can't lead.
Leadership and management are two very different things just like leadership and expertise or management and expertise are two very different things.
Oh, absolutely agreed. My ideal world has people moved (not necessarily "promoted") to manager because people up the chain know that they'll be good at it, and not for any other reason.
There really can't be, since people leadership becomes more and more required as you go up.
But if you can handle the amount needed, you can still rise. Just seems to be a lot slower and harder to rise as an IC.
But if you can handle the amount needed, you can still rise. Just seems to be a lot slower and harder to rise as an IC.
My favorite thing is seeing people I wouldn't hire to be a low level IT tech as CIO/IT Director because they're a "network guy".
So not only do they end up not understanding 90%+ of IT's functions in any real sense, they are typically not even trained on how to manage.
I work with one such moron at my current job. The entire company goes around the fool, yet they keep him. Why? The acting CEO is likely embezzling and competent IT might shine a light on it. That and the CEO outsources work to her husband's company for 10s of thousands a month with no deliverables or results (beyond what I suspect is the normal embezzlement in other areas).
I've been in this field for ~25 or so years. Maybe I'm jaded by working in consulting/contracting for most of that (and working for myself). I have never worked with an IT Director or CIO that I would personally hire for my own business in that entire time. Being technical enough to make the right decisions and having enough managerial experience/knowledge to be a good manager at the same time is extraordinarily elusive.
Another question is, how do people hire a CIO, when they themselves don't understand IT (or even want IT it seems). They guess or outsource it. I've never seen that work either.
So not only do they end up not understanding 90%+ of IT's functions in any real sense, they are typically not even trained on how to manage.
I work with one such moron at my current job. The entire company goes around the fool, yet they keep him. Why? The acting CEO is likely embezzling and competent IT might shine a light on it. That and the CEO outsources work to her husband's company for 10s of thousands a month with no deliverables or results (beyond what I suspect is the normal embezzlement in other areas).
I've been in this field for ~25 or so years. Maybe I'm jaded by working in consulting/contracting for most of that (and working for myself). I have never worked with an IT Director or CIO that I would personally hire for my own business in that entire time. Being technical enough to make the right decisions and having enough managerial experience/knowledge to be a good manager at the same time is extraordinarily elusive.
Another question is, how do people hire a CIO, when they themselves don't understand IT (or even want IT it seems). They guess or outsource it. I've never seen that work either.
I have the problem of being the "moron" at your work. I wanted to just be a web developer. It's the only thing I'm good at, and I'm not even really great. Just functional.
But people start to ask you for IT related things because you are the "tech" guy. If your honest and say you need to hire someone to do that specific task, often people are ok with that.
I follow this simple guide when hiring someone to do something I don't understand.
1. Explain to me how you would solve problem X, in as many steps as possible. I make them walk me through it, and ask for more and more detail. Usually spending about an hour.
2. If they have no problems getting into the details, then we set a roadmap and schedule and I check in periodically to make sure we are staying close to it. If they can't stick to their own plan... I move on.
3. If they could give me enough detail to start with, and too much of it was, I'll have to do research or figure it out when we get there, I don't hire them.
4. This results with me having a solid bank of IT people I can outsource problems too, and in tern executives depend on ME to deliver actual results.
That doesn't sound awful, but it actually is. I get to spend extremely little time doing something I could potentially be great at, WEB DEVELOPMENT. And I know the people that work for me, think I'm an idiot and don't understand why they don't have my job.
I try to ask questions and get domain knowledge as I go, but unless you are a genius or spend many years, its just too hard to know everything. And I can't pretend that I'm an expert at managing people, because I'm not. I just do those 4 steps, and then try to be friendly. That's it.
I feel like I'm stuck managing a team of people, when I would rather be an intern for a master developer.
But people start to ask you for IT related things because you are the "tech" guy. If your honest and say you need to hire someone to do that specific task, often people are ok with that.
I follow this simple guide when hiring someone to do something I don't understand.
1. Explain to me how you would solve problem X, in as many steps as possible. I make them walk me through it, and ask for more and more detail. Usually spending about an hour.
2. If they have no problems getting into the details, then we set a roadmap and schedule and I check in periodically to make sure we are staying close to it. If they can't stick to their own plan... I move on.
3. If they could give me enough detail to start with, and too much of it was, I'll have to do research or figure it out when we get there, I don't hire them.
4. This results with me having a solid bank of IT people I can outsource problems too, and in tern executives depend on ME to deliver actual results.
That doesn't sound awful, but it actually is. I get to spend extremely little time doing something I could potentially be great at, WEB DEVELOPMENT. And I know the people that work for me, think I'm an idiot and don't understand why they don't have my job.
I try to ask questions and get domain knowledge as I go, but unless you are a genius or spend many years, its just too hard to know everything. And I can't pretend that I'm an expert at managing people, because I'm not. I just do those 4 steps, and then try to be friendly. That's it.
I feel like I'm stuck managing a team of people, when I would rather be an intern for a master developer.
The ability to hire contractors who can actually do the work... that's a formidable asset to the company. You're not the moron. You're not the incompetent. You are actually very valuable.
The problem is, you're being very valuable doing something that you don't actually want to do. You may not feel that it is emotionally rewarding. You may just want to do what you like. That's fine; I'm not trying to argue with that. But don't feel like an incompetent or a failure at what you're doing. You're not.
The problem is, you're being very valuable doing something that you don't actually want to do. You may not feel that it is emotionally rewarding. You may just want to do what you like. That's fine; I'm not trying to argue with that. But don't feel like an incompetent or a failure at what you're doing. You're not.
Wow if accounting/finance can't find that level of embezzlement the CIO is the least of their problems.
Accounting is in on it. Everything they do here is cooking the books. They give the auditors doctored spreadsheets for everything.
It's pretty funny to me. I don't give a shit because I'm just riding this out until I have to get something else or I get a few more clients for my startup.
Oh, everyone's 401k got stolen by a friend of the CEO's kid. So that was nice.
It's pretty funny to me. I don't give a shit because I'm just riding this out until I have to get something else or I get a few more clients for my startup.
Oh, everyone's 401k got stolen by a friend of the CEO's kid. So that was nice.
No whistleblowing?
Lol, whistle blow to whom? No one gives a shit (including the owner). As long as there's money in the bank account...
I get paid, so I don't give a shit either. They're just funding me while I work on side projects.
I get paid, so I don't give a shit either. They're just funding me while I work on side projects.
I don't care about status so much as compensation. With most IC roles, you cap out pretty quickly in salary and equity pretty quickly regardless of performance.
If you want better money, or just to get paid the equity you're worth, you are forced into management roles.
If you want better money, or just to get paid the equity you're worth, you are forced into management roles.
I know I'd be a bad manager, but I can still make more money as a bad manager than as a great technical person. When I look at toys I want (and the retirement I hope to get someday) it is hard to not think maybe I should jump ship - I might hate my job for a while, but overall I might be happier anyway.
Good management would also mentor and coach people who get promoted. Being great at an individual contributor role is a good start to being a leader, but there are additional leadership and business skills and knowledge that need to be added on to successfully move up the chain. A leader who actively gives his newly promoted people those skills will help them grow to their full potential and avoid the Peter Principle. But if you just promote them and walk away... you are setting them up for failure.
> One problem is high-contributing ICs who think they should get promotions to manager. For whatever reason
Because traditionally that's the only way to get better comp' once you reach a certain point. In most companies, regardless of your IC and management skills if you don't step on the management track you're going to cap out pretty fast.
Because traditionally that's the only way to get better comp' once you reach a certain point. In most companies, regardless of your IC and management skills if you don't step on the management track you're going to cap out pretty fast.
Exactly. This is the problem: That most company hierarchies are broken, in that they stratify themselves into managers at the top and "do-ers" at the bottom. If you do things (like directly create value or personally solve problems), you're a "do-er", and you are automatically subordinate to anyone who can't do things, anyone not doing things must be a manager.
I was once literally told that I wouldn't be considered for career advancement because I was "a do-er" and too useful doing the things that the incapable-of-doing-things managers told me to do. It never even crossed their minds that they should give the do-er a say in what things should be done. I don't work there any more.
I was once literally told that I wouldn't be considered for career advancement because I was "a do-er" and too useful doing the things that the incapable-of-doing-things managers told me to do. It never even crossed their minds that they should give the do-er a say in what things should be done. I don't work there any more.
I have never seen this “parallel IC track” work well. Basically the problem is, it is dramatically harder to advance on the IC track than on manager track. A demigod of compilers could easily be making less than a director, and there are a lot more directors than “demigod” ICs. After some point, the atmosphere becomes so rarefied and criteria so fuzzy that most people would be much better off in terms of both money and organizational influence if they just bit the bullet and became managers earlier. It’s a different job, to be sure, but it’s not actually that hard once you focus on it and emphasize the people aspect of it.
So my advice to those considering the switch is: if you are motivated by money and influence, management is basically the only option to advance without killing yourself. If you are motivated by technical challenges and couldn’t care less about the “people” stuff, however, be an IC, with the understanding that your growth will stall well before that of your former peers who went into management.
So my advice to those considering the switch is: if you are motivated by money and influence, management is basically the only option to advance without killing yourself. If you are motivated by technical challenges and couldn’t care less about the “people” stuff, however, be an IC, with the understanding that your growth will stall well before that of your former peers who went into management.
I remember seeing a paper that showed that at moderate correlations of "Good as an X -> good as a manager of Xs" you are still better off promoting people randomly. The reason being, promoting your best X eliminates your best X and does not replace them by a great manager of Xs, so you take a definite loss, at least some time transition until they become a functioning manager, and then a risk that they will never be as productive in their new role as they were in the last.
Definitely the solution is to decouple reward hierarchy from managerial hierarchy. Unfortunately, the people who would make that decision in most situations stand to lose from such a decision. There is too much focus on leaders when the best a leader can ever hope for is to allow the formation of a gestalt out of all the team members including themselves.
Definitely the solution is to decouple reward hierarchy from managerial hierarchy. Unfortunately, the people who would make that decision in most situations stand to lose from such a decision. There is too much focus on leaders when the best a leader can ever hope for is to allow the formation of a gestalt out of all the team members including themselves.
"Definitely the solution is to decouple reward hierarchy from managerial hierarchy."
Completely agree with this.
Completely agree with this.
This is probably just a variant of Berkson's paradox, similar to Google's observation that success in programming competitions is negatively correlated with job performance: http://www.catonmat.net/blog/programming-competitions-work-p...
The mechanism would work this way: sales people exhibit multiple features, and they are promoted based on some combination of those. If a sales person has outstanding other credentials, they might be promoted despite poor sales percentile. Those other credentials might actually be better predictors of managerial experience. Conversely, many of the top sales people might have been promoted on the grounds that they were good sales people, without exhibiting any other skills.
Note that there might still be a positive correlations between sales skills and managerial skills, but due to how the promotions are selected, you end up observing a negative correlation in the promoted group.
https://en.wikipedia.org/wiki/Berkson%27s_paradox
The mechanism would work this way: sales people exhibit multiple features, and they are promoted based on some combination of those. If a sales person has outstanding other credentials, they might be promoted despite poor sales percentile. Those other credentials might actually be better predictors of managerial experience. Conversely, many of the top sales people might have been promoted on the grounds that they were good sales people, without exhibiting any other skills.
Note that there might still be a positive correlations between sales skills and managerial skills, but due to how the promotions are selected, you end up observing a negative correlation in the promoted group.
https://en.wikipedia.org/wiki/Berkson%27s_paradox
> similar to Google's observation that success in programming competitions is negatively correlated with job performance
I find it very interesting that Google then interviews with programming challenges...
I find it very interesting that Google then interviews with programming challenges...
I'm pretty convinced half of that is ability to handle arbitrary bullshit, and the rest is just an IQ test with a different name.
If Google knows that success in programming competitions is negatively correlated with job performance, then why Google organizes codejam and invites participants with good results to a job interview? Also as mentioned above Google interview questions looks like problems from programmings competitions.
True, and someone who is a great salesperson probably has skills that are optimized for the context of sales. But another aspect of getting promoted is that a person is given oversight of new kinds of activities, where teams work with different cultures and different rules. I've seen some sales manager succeed by being bullies to their sales team. But I think it is a disaster when someone attempts to bully a tech team. So what works in one context fails in another context. I've tried to describe this previously:
----------------------------
Every industry has certain euphemisms for the least savory aspects of its business. In sales, there is the secretly ugly phrase, “goal-oriented.” That sounds pleasant, doesn’t it? If I point at a woman and I say, “That entrepreneur is goal-oriented,” then you probably think I am complimenting her. But if I point at her and say, “That entrepreneur is a lying, manipulative, soulless psychopath who brutally exploits labor from the eleven-year-olds she employs in her sweatshops in Indonesia,” then you probably think I am insulting her, unless you are a libertarian. And yet both statements mean about the same thing: that she is someone who is willing to do whatever is necessary to ensure the success of her business.
When I read about Milburn online, I’d seen testimonials from his colleagues in which he was often described as a goal-oriented salesperson. That probably meant that he was a master of manipulating other people’s emotions. He knew all the tricks: praise, shame, laughter, anger, promises, guilt, threats.
Whether his use of these tools was conscious or unconscious is, of course, unknowable. But it doesn’t matter much. A lifetime as a sales professional left him with an arsenal of psychological ploys that had become second nature to him.
...Milburn truly had a genius for the strategic use of anger. If he sensed the risk of losing control of the conversation, he would indulge in another outburst. If I were to ever switch over to the Dark Side, I would want to study with him. His techniques were fundamentally dishonest and manipulative, but that is probably what made him so good at sales. And his tactics were probably an effective way to drive a sales team, but I sincerely believed that such tactics were the wrong way to run a software development team. Especially when doing something cutting-edge original, like we were doing, I think open and honest communications were extremely important. (I have worked with many companies where the sales team was both friendly and successful. One does not need to use abusive tactics to have success in sales. Indeed, the sales manager who relies on abuse is typically more interested in aggrandizing their own success, rather than the success of the company they work for.)
https://www.amazon.com/Destroy-Tech-Startup-Easy-Steps/dp/09...
----------------------------
Every industry has certain euphemisms for the least savory aspects of its business. In sales, there is the secretly ugly phrase, “goal-oriented.” That sounds pleasant, doesn’t it? If I point at a woman and I say, “That entrepreneur is goal-oriented,” then you probably think I am complimenting her. But if I point at her and say, “That entrepreneur is a lying, manipulative, soulless psychopath who brutally exploits labor from the eleven-year-olds she employs in her sweatshops in Indonesia,” then you probably think I am insulting her, unless you are a libertarian. And yet both statements mean about the same thing: that she is someone who is willing to do whatever is necessary to ensure the success of her business.
When I read about Milburn online, I’d seen testimonials from his colleagues in which he was often described as a goal-oriented salesperson. That probably meant that he was a master of manipulating other people’s emotions. He knew all the tricks: praise, shame, laughter, anger, promises, guilt, threats.
Whether his use of these tools was conscious or unconscious is, of course, unknowable. But it doesn’t matter much. A lifetime as a sales professional left him with an arsenal of psychological ploys that had become second nature to him.
...Milburn truly had a genius for the strategic use of anger. If he sensed the risk of losing control of the conversation, he would indulge in another outburst. If I were to ever switch over to the Dark Side, I would want to study with him. His techniques were fundamentally dishonest and manipulative, but that is probably what made him so good at sales. And his tactics were probably an effective way to drive a sales team, but I sincerely believed that such tactics were the wrong way to run a software development team. Especially when doing something cutting-edge original, like we were doing, I think open and honest communications were extremely important. (I have worked with many companies where the sales team was both friendly and successful. One does not need to use abusive tactics to have success in sales. Indeed, the sales manager who relies on abuse is typically more interested in aggrandizing their own success, rather than the success of the company they work for.)
https://www.amazon.com/Destroy-Tech-Startup-Easy-Steps/dp/09...
My hypothesis is that salespeople do best without strong managers. So when a poor-performing salesperson becomes a manager, the sales team is forced to step up to the plate and give it their all because the manager isn't carrying the team. But when a high performing salesperson becomes a manager, the team rests on the manager's performance and individual effort decreases.
Costly compared to what? Did anyone figure out what the article is comparing against?
The trouble I have is assuming that one can measure "managerial performance." Measuring worker performance is straightforward, after all, they do the work.
Why assume that someone wants to be forever competent in his position?
Many people just want to be mangers, even disregarding the salary. I would take a management job anytime even if my salary is reduced and even if I'm not competent enough.
What do they think that I'll be productive in my current role forever? NO. I'm productive now so that I can be a manager someday.
Many people just want to be mangers, even disregarding the salary. I would take a management job anytime even if my salary is reduced and even if I'm not competent enough.
What do they think that I'll be productive in my current role forever? NO. I'm productive now so that I can be a manager someday.
It's real, but I'm not a fan of the application in tech.
You have junior people who are evaluated according to arbitrary metrics. So they try to put in a process and get a bunch of people to give feedback. So now you have these people getting evaluated according to arbitrary metrics in an overwrought process. You have overhead and barriers and all sorts of politics in place just to prevent a junior engineer getting promoted to mid level with slightly less experience. The impact to the company of doing that is negligible. The impact to the employee can be negative, but if they don't make that level fairly quickly they get fired anyway.
I'd say the impact of that person giving up and quitting and getting the next level at another company is worse. Now you have lost someone you put years of effort into.
I've seen this first hand. Surveys showing that a majority of engineers don't know what it takes to get to the next level, don't believe they can make the next level on their current team, frustration with promotion processes. Orgs arbitrarily deciding to ignore new guidelines because they think they are too easy. All because of a lack of transparency and a broken process, developed as a result of the dreaded peter principle.
No different than shitty interviews powered by false negatives because "it's too costly to hire someone bad".
You have junior people who are evaluated according to arbitrary metrics. So they try to put in a process and get a bunch of people to give feedback. So now you have these people getting evaluated according to arbitrary metrics in an overwrought process. You have overhead and barriers and all sorts of politics in place just to prevent a junior engineer getting promoted to mid level with slightly less experience. The impact to the company of doing that is negligible. The impact to the employee can be negative, but if they don't make that level fairly quickly they get fired anyway.
I'd say the impact of that person giving up and quitting and getting the next level at another company is worse. Now you have lost someone you put years of effort into.
I've seen this first hand. Surveys showing that a majority of engineers don't know what it takes to get to the next level, don't believe they can make the next level on their current team, frustration with promotion processes. Orgs arbitrarily deciding to ignore new guidelines because they think they are too easy. All because of a lack of transparency and a broken process, developed as a result of the dreaded peter principle.
No different than shitty interviews powered by false negatives because "it's too costly to hire someone bad".
The dots on the plots tell an even more compelling story than the fitted lines.
Wow, indeed! That outlier at the 5-ish% sales mark needs more study.
Hypothesis:
High outlier @5pctl - outstanding graduates groomed for management.
Low outlier @10pctl - family/friends/favours groomed for management.
It looks like it’s at zero to me. My guess would be that is an outside hire.
It looks like evidence of the Dilbert Principle. https://en.wikipedia.org/wiki/Dilbert_principle
The motivation, and reason for their perfomance, of some "high performing salespeople" might be to get out of the ditches and into a comfy management job. They might not be able to keep up such a pace for long, but consider it more of a sprint. In other words, the direction of causality might be inverted.
I think in some countries, cultures and industries there's some kind of legacy class system where only people of the managerial class can share in the spoils of the company, so the only way to reward a competent and skilled employee with an income above a certain level is to make them a manager, while it's also assumed that's what the employee is also striving for. I see this in various engineering industries in developing countries, where in the same country no one thinks that a specialist surgeon can only be rewarded by being given the job of hospital manager.
That certainly fits what I see. Managers are a separate class in larger companies, similar to officers vs. enlisted in the military.
>Taking "is good at IC duties" as the measure for "should lead a team of ICs" is sloppy.
What's an "IC"?
What's an "IC"?
Individual Contributor, i.e. most of the value you are creating for the company depends on your individual work, by opposition to a manager, which rely on a team.
[deleted]
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Individual contributor
>Individual contributor
Thanks. First I've heard that one.
Thanks. First I've heard that one.
I just have a hard time with this term. It feels.. disconnected... I don't know.
It reminds me of George Carlin's bit on "Shell Shock"/"Post Traumatic Stress Disorder".
https://www.youtube.com/watch?v=vuEQixrBKCc
It reminds me of George Carlin's bit on "Shell Shock"/"Post Traumatic Stress Disorder".
https://www.youtube.com/watch?v=vuEQixrBKCc
You're not wrong. I admit, it's a term from the euphemistic cogs-in-the-machine language of management. But I've found no way to entirely avoid adapting to "their" culture.
I can't read the actual paper, but from this summary it sounds like people who have just started doing one job aren't as immediately effective as people who've shown they're experienced and effective over time at a completely different job. That doesn't sound like a very controversial finding, nor does it tell you very much about their long-term prospects.
One of the nice things about agile (done well) is that there basically are no managers and the engineers have equal status to people like scrum masters and product owner. They don’t get to make every decision about everything but everyone is similarly constrained to mostly make decisions about what they understand best — the product owner sets requirements and priorities, the developers figure out how to make it happen, and the scrum master makes sure things are flowing along.
At least where I am, there’s no management role I could go to that would make me happier or better paid.
At least where I am, there’s no management role I could go to that would make me happier or better paid.
I was a high performing software engineer who just got promoted to management and is currently Petering it up. Any tips on how become a competent Charlie?
Most devs going into management need to spend less time coding and more time communicating. Another thing is I've found doing testing is a good way to see the quality of what people are doing.
A big thing about management is knowing how to keep people engaged and motivated, with freedom to be creative but enough oversight so they're kept on track and not lost. You'll have to experiment with this. Also importantly different people need different guidance, so the experienced old hand needs little advice just steer them in the right direction, where the new guy needs daily help.
A big thing about management is knowing how to keep people engaged and motivated, with freedom to be creative but enough oversight so they're kept on track and not lost. You'll have to experiment with this. Also importantly different people need different guidance, so the experienced old hand needs little advice just steer them in the right direction, where the new guy needs daily help.
Pay attention to people. Assume technical competence until proven otherwise. Ask your people where they want to go, and then figure out what they need to do to get there. If they want your job bring them to all the training you need to take now. (there is a lot of training out there are on how to be a good manager, the good stuff is backed by science) If they want to be a better developer help them in that. If they want to retire as a software engineer, make sure there is something meaningful for them to do.
One problem is high-contributing ICs who think they should get promotions to manager. For whatever reason: it's how things are done, they really want to do it, etc. There needs to be a separate, equally status-conferring, career track for them if they're really not going to be good at managing people. They need to be convinced that the best thing for them is to stay where they are, being awesome. Which is probably hard. The idea that you are awesome, therefore you become a manager, get an office, etc. is pretty pervasive.
(The bonus would be that those of us who never, ever want to be managers no matter how much our directors want us to would have that career path available too.)