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Commentary & Analysis

The Emperor Has No Clothes

By Pat Taylor,

By WhatTheyThink Staff
Published: June 12, 2006

By Pat Taylor, Proactive Technologies June 12, 2006 -- I will forever marvel at the reliability of the Peter Principle. In a theory originated by Dr. Laurence J. Peter in 1969, the principal states that “in a hierarchy, every employee tends to rise his level of incompetence”. Many senior managers and consultants are loath to consider that the principal may, in fact, apply to them. It's tough to look in the mirror if you don't like what's staring back at you. Our nation's need for leadership is not limited to politics; many of our [corporate] emperors 'have no clothes'. We have our share of these folk in the printing and publishing industries. They are the grist of daily conversation. They occupy top positions in print shops, manufacturing companies and suppliers all across the country. Our nation's need for leadership is not limited to politics; many of our [corporate] emperors 'have no clothes'. They make disconnected decisions (as evidenced by the blanks looks on employees hall-walking the day of the announcement). They seek refuge in their offices and surround themselves with 'Yes Men'; they limit themselves to what they know. Their decision-making lacks vision and courage. How else can you explain reducing incentives and cutting pay for top performers (like the salesmen who generate revenue) while allowing 'the old guard' to remain on the payroll -- no matter the lack of effort and results? There always seems to be a Vice President of Failed Initiatives in these companies The principle is most evident in companies that are not growing. Vibrant organizations add new positions and employees at a pace too quick for the Peter Principle to manifest itself. But in old, slow-growth companies, the theory becomes a reality evidenced by staff dissatisfaction, customer concern, and [at the end of the day] loss of revenue and profit. These dysfunctional companies change strategies annually, never allowing the previous strategy time to mature to fruition and creating confusion within the ranks. There always seems to be a Vice President of Failed Initiatives in these companies; someone the President has set up as his 'fall guy' for the Day of Reckoning with the Board. Real World example (or symptoms) that help pinpoint the disorder include: * Demotivated Salespeople. A national dealer reorganizes sales compensation in April; traditional heavy-hitters are gut-punched with 30 percent decrease in commissions over previous year. Apparently, top management felt the best salesmen are overpaid and a correction would have a positive impact on the bottom line. * Disorganized Logistics. Upper management cost-cutting leaves key positions in product delivery unmanned. Management foresaw the gaps, but felt that the remaining production line employees would pick up the slack. They probably would have, but they have never been trained, and the trainers have been laid off.) * Inconsistent Product Quality. An international manufacturer sees Quality Control evaporate as corporate dictate to 'outsource' interpreted to include core competencies. Efforts to coordinate an installation are compromised, as well; no one knows when what will show up. The first step is acknowledging the problem. We must have the courage to look first at ourselves. While it's easy to poke fun at these organizations and their "leaders", it is difficult to prescribe an effective treatment for the disorder. Like most problems, the first step is acknowledging the problem. We must have the courage to look first at ourselves. We must make ourselves sensitive to Peter Principle problems, such as the desire to do away with those that disagree with us and a subtle retreat from 'the street'. (Hint: if everyone on your team agrees with your ideas, you might need some new people). It takes fire to temper steel, and the ideas that will move our industry forward are not made of common stuff. They may be radical, and will most certainly be uncomfortable. Consider the unreasonable. Get rid of the high-dollar guys that aren't earning their money. Promote the new thinkers that bring in new revenue. Make productivity and profit important again. Far better to fail bravely than live out your [work] days as 'Overhead'…

 

 

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