In the 1960’s, Dr. Lawrence Peters set out to understand and diagnose what he called “occupational incompetence” – a more diplomatic way of referring to a timeless issue in workplaces: people who stink at their jobs. His findings went on to become famously known as The Peter Principle. Peters’ conclusion was this:
In organizations with hierarchy, every employee tends to rise to his or her level of incompetence.
You have probably seen this before…
An employee does well in her role. S/he is rewarded with a promotion, and goes on to do well in that job… and is promoted again. This continues until the point where s/he is no longer performing at a level deserving of a promotion, which leaves her/him at a level where she is overmatched by the demands of the job. In Peter’s words, “incompetent.”
While Peter’s Principle stood as just a theory for several decades, it has borne out in several studies since.
Recently, three researchers – Alan Benson of the University of Minnesota, Danielle Li of MIT and Kelly Shue of Yale – studied the performance of over 50,000 sales professionals. They found that that the best salespeople were more likely to a) be promoted and b) perform poorly as managers. (I’ve seen this issue to be especially prevalent in Sales orgs.)
These overpromoted managers among us are entrusted and expected to deliver real business results… while, in many cases, having been promoted to or past their point of incompetence without the support to grow into these oversized shoes.
I call this a Tommy Boy Problem. In the 1990’s film by the same name, Tommy Callahan was thrust into a high-stakes leadership role without any real experience or support.
(Spoiler Alert: Despite his utter incompetence and buffoonery, in the movie, Tommy pulls a few rabbits out of his hat to save his family’s struggling company from imminent doom. But meanwhile, back in the real world, few overpromoted managers’ stories end in such an idealistic way.)
The Tommy Boy Problem is especially pervasive in the land of small and mid-sized companies. Too often in SMBs, which often lack the hearty training budgets and formal management development programs of their large company counterparts – strong individual contributors are promoted to managerial roles and… left to figure it out for themselves.
They enroll their managers in the Sink-or-Swim School of Leadership.
This lack of attentiveness to and investment in rising managers can go on to become a major snowballing challenge for growth-stage companies, for several reasons:
1. Research shows that strong management is the lynchpin of business success.
In the book First Break All The Rules, which was based on a large scale study by the Gallup Organization into what makes successful managers, authors Marcus Buckingham and Curt Coffman drew several important conclusions from their research that support the importance of middle management to, well, everything that follows.
First, they concluded that employee satisfaction is the key to building strong, growing businesses. Why? Because (among other reasons) satisfied employees are more engaged, more productive, and more likely to stay. The opposite is also true. Good luck trying to build a sustainably successful business without an engaged workforce, their research implies.
Second, their research concluded that the most strongly linked factor with an employee’s engagement is… drumroll please… the effectiveness of their direct manager. This is because the manager is responsible for defining the employees’ work environment, creating an atmosphere that will lead to the employee’s engagement and success.
Ergo, the effectiveness of managers is a critical factor to a company’s growth and success.
2. …And the majority of the staff in mid-sized companies report to middle managers and supervisors.
In most 100 – 500 employee mid-sized companies, 60 – 90% of employees report to what, here, we will refer to as “middle managers” – i.e. a manager who is not on the executive team. Managers, Directors, and VPs.
This means that the vast majority of the action in a business is being carried out and directed by those who are being guided by these non-executives. If they aren’t operating at full power as leaders, it is a safe assumption that the work happening within their org probably isn’t happening at a high-level (per the conclusion from Buckingham and Coffman’s research).
3. But middle managers and supervisors are woefully underinvested in many small/mid-sized companies.
String these ideas together and its logical to conclude that many mid-sized companies are underinvesting in one of the most critical ingredients to their growth and success – their middle managers.
Wharton management professor Ethan Mollick, who researched the role that managers play in knowledge-based companies, issued his own warning: “Pay closer attention to your middle managers. They may have a greater impact on company performance than almost any other part of the organization. The often overlooked and sometimes-maligned middle managers matter.”
They matter a heck of a lot, indeed. Not only in the compassionate sense—these are people whose hopes and dreams we care about. But moreover, they are—in many ways—the linchpin of a company’s success. If your company wants to get results, grow, and win, your middle managers must lead change, execute with agility, and get the most out of 60 – 90% of the people in the organization—the most important resource that a company has.
If you want to win, you need to invest in elevating the middle.
How much investment—time, money, coaching, support, attention—is your company making into your middle-managers?