Being Right

If there is one subject Gen X’ers are utterly familiar with, it would be having bad bosses. Terrible ones. So much so, that this column in its former incarnation actually devoted an article to it.
The question is, why are bad bosses so rampant? And we’re talking here not only of those in management or leadership positions in the private sector but also in government.
On the surface, the dynamics of how the inept or the incompetent rise to exalted levels would be different in business from public office.
On the other hand, there may not be such difference at all.
The Peter Principle tells us that “every employee tends to rise to his level of incompetence.” Though stated satirically, in mockery of fashionable management practices, nevertheless, the principle achieved a life of its own, particularly in business academia, as well as becoming a self-fulfilling prophecy.
An example of the Peter Principle is when a law firm elevates a lawyer with exceedingly good research and analytical skills to a position that requires mostly sales and marketing. The idiocy of this is when the firm’s partners later scream in frustration at the inevitable less than stellar result in client generation, considering one already knew beforehand that the subject’s talent lay elsewhere.
Cynics may respond that such could be a management tactic to get rid of an unwanted employee. But, again, that’s ridiculous. First of all, why hire that person in the first place? Secondly, why try damaging the interests of the organization just to be rid of one person?
But even in its more rationale manifestation, the Peter Principle seems to indicate that management (and its more exalted brother, leadership) is such a difficult job of particular complexity that mere technical abilities exhibited at lower levels may not be sufficient indicators of success at higher ones.
A paper by Alan Benson, Danielle Li, and Kelly Shue finds that: “The best worker is not always the best candidate for manager. In these cases, do firms promote the best potential manager or the best worker in her current job? Using microdata on the performance of sales workers at 214 firms, we find evidence consistent with the ‘Peter Principle,’ which predicts that firms prioritize current job performance in promotion decisions at the expense of other observable characteristics that better predict managerial performance. We estimate that the costs of promoting workers with lower managerial potential are high, suggesting either that firms are making inefficient promotion decisions or that the benefits of promotion-based incentives are great enough to justify the costs of managerial mismatch.”
The next question, therefore, is how does one get around the Peter Principle?
Of course, one thing that organizations shouldn’t do is resort to the Dilbert Principle. As described by Dilbert creator Scott Adams: “the least competent, least smart people are promoted, simply because they’re the ones you don’t want doing actual work.” In other words: remove incompetents from areas where they can do most damage.
An unfortunate version of the Dillbert Principle is what this column un-ironically calls The Charity Principle: promoting an unstable or incompetent employee in the compassionate hope that the increased responsibilities will mature and stabilize that person. Which, of course, never happens.
The Charity Principle simply ignores the fact that increased power and responsibility merely amplifies one’s strengths and weaknesses. If one is a lunatic as a staffer, the lunacy will turn to utter derangement as a manager.
Which should make people wonder why business owners (as well as voters) promote or elevate and then retain incompetents, even morons, to higher office?
Which takes us to the Pareto Principle (or the law of the vital few): “80% of the effects come from 20% of the causes.”
Tie this up with the hereto illustrative fact that only around 20% of the population will have superior to genius IQs (roughly 130 above), with the remaining 80% falling within the general 80-120 IQ range and lower.
The harsh reality of what this means in terms of promotion is that in an organization of 100 or 1,000, only about 20 or 200 of that will really have the talent and capability to matter substantively for the organization.
Yet organizations (and national policy makers) choose to ignore this seeming law of nature, at great cost.
Thus, organizations promote on equitable terms: usually by way of seniority or outright rewarding of employees equally. Yet do that and what likely happens is for their gifted employees to leave and the mediocre ones to stay.
The only solution then is laser-like focus on traits demanded for management and leadership positions, not technical or congenial popularity, and consider deep or outside hiring. Another is biting the bullet and take the radical position of customizing the compensation system and rewarding disproportionately your talented employees.
But in the Philippines? That’ll be the day.
Jemy Gatdula is a senior fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.
Twitter @jemygatdula