Most people have heard of the original Peter Principle:
“In a hierarchy every employee tends to rise to his level of incompetence.”
Still, it’s been a long time since Peter’s book, so let’s just recall what he said. Consider any hierarchical system with people in it. Someone starts, say, in the mail room; as an ambitious person and a really good mail room clerk, they soon take the opportunity to move to being an accounts-payable clerk; they are good at this, and enjoy it, so they use the tuition benefits to get an accounting degree, and move into the Controllers office. Assuming they are still really good at what they do, they move up in the company, until at some point — maybe even having been promoted to Controller — they reach a limit. They aren’t so good at some part of the job to be promoted further, and so stop. This is what Peter calls the “level of incompetence.”
As with the SNAFU Principle, this is a useful insight, but not sufficiently detailed to use in a scientific fashion. Consider our ambitious controller: when he stops as Controller, what stops him? It might be that he’s not a good enough accountant, but it’s relatively unlikely. It might be that he’ll never move up to be, say, CFO because he’s short and balding, and his competition for the job is tall, white-haired, and makes everyone feel confident when he comes into the room — which is actually an important quality for a CFO who will be meeting with investors and analysts. It might be that he’s never gotten an MBA, which the board thinks is essential. (This is not an unusual issue in the military: a lot of military officers retire as O-6 [Colonel, or Captain in the Navy] because there are certain kinds of duty they should have taken to be able to be promoted to flag rank, like an extended tour at the Pentagon. It doesn’t mean they weren’t good officers, but it does mean that they missed some qualification along the way.) It might be that he’s abrasive and doesn’t suffer fools gladly, and the company has a lot of fools.
The point here is not “life is so unfair” — the ability to inspire confidence, the ability to get along with people, and the technical or educational or experiential qualifications for a job are all real issues — but that there are many axes on which competence can be measured.
But now consider our ambitious controller’s competition for the CFO job. He has the right looks, the right MBA, the right connections. All of these are qualifications for the CFO’s job; if he doesn’t happen to be very well qualified as an accountant, does that matter?
So we now have a situation in which the CFO is supervising someone who is more qualified in an area of their mutual interest than the CFO is. Again, this is not uncommon at all; rather the opposite. Jonathan Schwartz at Sun is certainly not as qualified as a computer scientist as James Gosling, nor as a cryptographer compared to Whit Diffie, nor as a systems architect compared to Andy Bechtolsheim.
The lesson here is that competence is multifactored, but hierarchy is not. When a person has reached their Peter level they’ve very probably reached a level at which they are just barely incompetent at some aspects of their job that are considered more important, but may well be beyond their level of mere incompetence in other areas that affect them.
On this insight we can state the following:
The Multivariate Peter Principle
In a hierarchy, every member of the hierarchy tends to be barely competent for their current task, and is often incompetent for the tasks of those below them.