In his book The Peter Principle, sociologist Laurence Johnston Peter introduced his now-familiar theory of hierarchical incompetence. Dr. Peter observed that people within an organization tend to advance beyond their level of competence. Here's how it works: Once workers prove competent in their jobs, they're inevitably promoted. When competence at the next level is displayed, they're promoted again. The process is repeated until each employee reaches a position for which he or she is unqualified.

Furthermore, as The Peter Principle reveals, after people are promoted to their level of incompetence, they remain in place. Since top officials are seldom fired or demoted, explained Dr. Peter, incompetent people occupy the highest ranks of organizations.

A primary cause of The Peter Principal is the up-or-out promotion philosophy of many organizations. Because of the prevailing mentality that everyone aspires to be the boss, workers are required to assume leadership responsibilities before advancing in salary or station. The traditional career path compels employees to trade in their technical competencies for the status and financial rewards reserved for middle managers.

Although it's common for people to want recognition for their efforts, influence over how their work is accomplished, opportunities to display their creativity, and autonomy, the truth is many workers lack the desire to lead others. Interviewed for Meredith Ashby's book Leaders Talk Leadership, Frederick W. Smith, CEO of FedEx, warns, "Many organizations get in trouble in this regard, because the only avenue they have for financially rewarding top performers is to move them into management positions."

Smith suggests, "You have to have rewarding, alternate career paths for outstanding specialists--engineers, for example, or R&D people--who can continue to make major contributions to the organization without going into management." And talent-driven companies are doing just that. New titles like Specialist, Master, and Fellow describe experts with deep knowledge and experience in their crafts, and whose qualifications include demonstrated experience and expertise, as well as credentials from applicable professional organizations. Values-based organizations are creating opportunities for experienced practitioners, those for whom leadership holds little appeal, to grow within the jobs they love and do best.

This trend introduces enormous benefits. Companies recognize savings in training and increased workforce stability. Specialists get seats at the decision making table alongside those following a management track. Because specialists are uninterested in acquiring power, competition with their ambitious colleagues is nonexistent; therefore, teamwork improves. Viable career path alternatives make the organization more attractive to qualified job seekers.

Best of all, this approach foils The Peter Principle and allows leaders to Recognize the Best in Others. Bookmark this post on del.icio.us