Monday, March 14, 2011

Innovation and the Peter Principle

By this point in your career, regardless of your length of time in your career, you've met someone who demonstrates the description of the Peter Principle.  According to the authors of the book, the Peter Principle espouses that "In a hierarchy every employee tends to rise to his level of incompetence".  Of course any sweeping statement like this one must be taken with a grain of salt, but I was thinking about how so many axioms about management are often somewhat true but never completely true.  For example, the concept of pigeon management, which has been described as when a managers "swoops down, craps all over everything and then flies away".  In every such saying, there are people who support and sustain the stereotype, just as there are people who negate the stereotype.  But I wanted to focus on the Peter Principle because I think it is critical from an innovation point of view.

What's interesting or nefarious about the Peter Principle when it comes to innovation?  In my mind the seeming inevitability of managers and executives as they climb the ladder to hold on to innovation as a competence or skill.  In this I'm not attempting to denigrate anyone, and yes, I recognize the few exceptions that prove the rule.  Let's examine why an innovation Peter Principle may be a natural phenomenon and what we can do to prevent it.

We all, for the most part, start out as wide eyed kindergartners full of verve and creativity, and over time the scholastic system teaches us to succeed by giving the right answers and coloring within the lines.  Just wait, we tell ourselves, until I get that first job.  Then I'll make my mark.  Many people who enter the workforce have dreams of creating an interesting new product or service.  I suspect many of the best ideas in companies come from employees who have been with the firm less than ten years, because over time many of us find our will being shaped and formed by corporate culture.  It's inevitable, then, as we climb the corporate ladder and risks gets magnified that we'll embrace less risk, less change and less uncertainty.  We may "encourage" that behavior in others but executives and managers for the most part refrain from innovation, as it is too disruptive to the short term goals of the company.  Further, as we get further and further from our innovation days, our knowledge, tools and interactions with customers gets fuzzier and fuzzier.  While we all argue that innovation "must be supported from the top" many executives haven't innovated in years and may be unfamiliar with the needs and challenges of the market.  Years of incremental change have left them unaware of the needs and challenges in the market.

So, at a time when innovation is paramount, many executives may be at their "Peter Principle" summit, unwilling to risk change and uncertainty, removed from the needs and expectations of customers and too focused on the short term goals to see the longer term picture.  Have they "risen to the level of their incompetence" or merely allowed their skills, perspectives and knowledge to atrophy?  Certainly it is the latter, but often hard to distinguish from a distance.

Other than Steve Jobs and a few easily identifiable other innovation executives, it is hard to identify people in senior roles who are active innovation leaders.  This isn't so much a case of people with poor skills rising to the top as it is a sloughing off of the distractions that don't seem to add a lot of value at the top.  Executives are too busy, too occupied, too far removed from customers and consumers and too preoccupied with what Wall Street thinks.  However, that's natural since that's what we've reinforced in compensation and rewards.  Many of those individuals, with the right incentives, can become innovation leaders, given time and encouragement.  We innovators all talk about the need for "buy-in" and "support" for innovation from the top, even if the executives are too busy to get involved themselves.  Perhaps what we should talk about is the need for active leadership and participation in innovation from executives, rather than excuse them from the hard work as long as they are cheerleading from the sidelines.

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posted by Jeffrey Phillips at 5:55 AM


Anonymous Anonymous said...

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