Definition:

1. In a hierarchy, members are promoted so long as they are competent, to their level of incompetence.

References:

1. Andy Grove, High Output Management book - the Peter Principle is unavoidable as there is no way to know ahead at what level someone will become incompetent.

Insights:

1. For large organisations the talent at each level will tend towards the most incompetent, as other employees benchmark themselves against the worst performers at the next level.
2. Avoiding the Peter Principle requires well constructed and disciplined promotion process.
3. In the best karate dojos in order to achieve the next belt you must defeat an opponent on that next level, ensuring that the promoted is never worse than the current group.

Principles:

1. Clearly define the responsibilities at each level and the skills required to perform.
2. Clearly define a formal process for all promotions.

Insights:

1. In the Art of War, Sun Tzu warns that providing a team a task that it cannot possibly do is called "crippling the army".
2. For sales team, moving the goalposts may just be de-motivating.