The main question that I hope this article will give you an answer too is this: why are so many organizations packed with people who have risen to their level of incompetence and what to do about it.  

Case in point: incompetence 

We (people in general) commonly misinterpret displays of confidence as a sign of competence. When it comes to leadership, manifestations of hubris – often masked as charisma or charm – are commonly mistaken for leadership potential. This is consistent with the finding that leaderless groups have a natural tendency to elect self-centered, overconfident and narcissistic individuals as leaders.

“Another person’s narcissism”, he said, “has a great attraction for those who have renounced part of their own… as if we envied them for maintaining a blissful state of mind.”

So, arrogance and overconfidence are inversely related to leadership talent — the ability to build and maintain high-performing teams, and to inspire followers to set aside their selfish agendas in order to work for the common interest of the group.

In short: what it takes to get the job is not just different from, but also the reverse of what it takes to do the job well. As a result, too many incompetent people are promoted to management jobs and promoted over more competent people. 

In most organizational hierarchies, there is a tendency for every employee to rise in the hierarchy through promotion until they reach a level of respective incompetence. 

For example, a front-office secretary who is quite good at her job may thus be promoted to executive assistant to the CEO for which she is not trained or prepared for—meaning that she would be more productive for the company (and likely herself) if she had not been promoted.

This is called the Peter Principle.

The Peter Principle is thus based on the logical idea that competent employees will continue to be promoted, but at some point will be promoted into positions for which they are incompetent, and they will then remain in those positions because they do not demonstrate any further competence that would get them recognized for additional promotion. 

According to the Peter Principle, every position in a given hierarchy will eventually be filled by employees who are incompetent to fulfill the job duties of their respective positions.

Most people won’t turn down a promotion, especially if it comes with greater pay and prestige – even if they know they are unqualified for the position. 

The reason why they then stay in those positions is that once an employee reaches a position in which they are incompetent, they are no longer evaluated based on their output but instead are evaluated on input factors, such as arriving at work on time and having a good attitude.

Dr. Peter further argued that employees tend to remain in positions for which they are incompetent because mere incompetence is rarely sufficient to cause the employee to be fired from the position. Ordinarily, only extreme incompetence causes dismissal.

The result is that every position in a given hierarchy will eventually be filled by employees who are incompetent to fulfill the job duties of their respective positions.

The org chart you see below is from IBM and was originally drawn back in 1917. 

It was designed in a time when organizations were different. Where the technology that we use every day was not yet around. A stable, slow-moving, predictable world. 

But this Flinstone org chart still represents how most of the organizations of today function. A symbol of the old command-and-control model. 

Let’s explore what happens when we move away from traditional organizational structures

Instead, let the changing nature of work impact the structure of roles and teams in a more organic way. 

 One of the most famous examples is Spotify. Known for its use of squads, tribes, alliances, and guilds to run its business. 

But there is still a hierarchy and Spotify also has managers. Their job is to look after people with the same skill set across different squads. Next to their task as line managers they are often part-time developers as well, contributing actively to a squad and therefore fully understands your challenges and day to day work.

So hierarchy itself isn’t bad, we just need a different perspective on it. In fact, hierarchy is inevitable. Organizations and people need hierarchy. 

Organizations that are celebrated for their lack of hierarchy may downplay and reduce status differences, but they always have some people with greater formal and informal power than others — and associated pecking orders. And eliminating titles such as “manager” or “supervisor” doesn’t make the hierarchy disappear.

Instead, they design structures that actually work and aim to distribute authority and autonomy to individuals and teams. Flexible structures that allow individuals to gather as members of multiple teams within multiple contexts. A network of teams. 

So how does rethinking corporate hierarchy relate to having competent people in leadership positions? 

By redistributing authority and autonomy to individuals and teams 

It is harder to hide 

By distributing autonomy and authority to teams and individuals, people have more ownership and decision power to solve their daily challenges. But they are still dependent on each other because they function as a team with shared responsibility for their goals and tasks, meaning they are going to hold each other accountable. With one remark: whatever they do, it should always be in coherence with the purpose and values of the “network” or organization in which they operate. It simply becomes easier to spot misfits. 

A two-way street allows more traffic compared to a one-way street 

When someone takes on a managerial role, it makes no sense that that person does not receive feedback from subordinates. Next to peer feedback, a self-assessment, and a manager assessment, we also do leadership assessments. In this way, there is a two-way information flow instead of just one way and helps us constantly improve our leadership. 

In the end, hierarchy should have the goal to scale communication and managing organizational complexity. Not to satisfy people’s egos. 

Where a lot of organizations go off track is when they start confusing respect and hierarchy, and thinking that high on the hierarchy means high respect and vice versa. 

Conclusion

A well-managed hierarchy is the most effective strategy for getting rid of friction, incompetence, and politics that keep good organizations from becoming great ones. Especially when your company is growing because the hardest thing to scale is communication. 

So to answer the questions on why so many organizations are packed with people who have risen to their level of incompetence and what you can do about it, I would remark the following:

The way we assess people for leadership positions is wrong and the old corporate hierarchy makes them hard to spot.

 

  • Rethink the corporate hierarchy 
  • Reassess the way you promote people into leadership positions  

 

Creating a network of teams and putting the right people in the right positions might be the solution.