The Peter Principle and the Paternal Instep

peter-principleThe Peter Principle characterizes corporate promotions in that competent employees are frequently promoted until they reach their level of incompetence. This Principle applies in all circumstances but is particularly relevant to family businesses, where the Paternal Instep allows family members to be promoted several levels above his or her level of incompetence (R.I. Sutton in The Peter Principle, Collins Business edition, 2009). The situation created by this move can be devastating in that positions higher up within the company have greater influence on the success or failure of the company. A ship needs a rudder to steer.

The problem with the the Paternal Instep is further highlighted by Andrew Carnegie, “There are but three generations in America from shirt sleeves to shirt sleeves,” meaning “The first generation builds the business, the second makes it a success, and the third wrecks it.

While I was at Creative Memories the founder’s son promoted his daughter to run the company that was originally started by his father. The daughter had previously worked as a consultant and had no experience actually running an organization similar to Creative Memories. She was ill-prepared for the turmoil that Creative Memories faced, and the company soon entered bankruptcy. In doing so, Creative Memories fulfilled both the Peter Principle and Andrew Carnegie’s prophesy.

About Mark Mizen

I have over twenty years professional experience in all aspects of photography and digital imaging. I am Chair of the ISO WG5 TG2 committee responsible for physical properties and durability of imaging material and am currently with HID Global working on systems for security printing for IDs, licenses, and credit cards. Previously, I was Director of Digital Development at Creative Memories from 2009 to 2012 and was responsible for the Creative Memories digital products and services. I also established and directed the Creative Memories Technology Center, which evaluated new products prior to product introduction, assisted with production difficulties, and provided technical information to support product sales.
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