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The Peter Principle

Simply put, the Peter Principle  is: Anything that works will be used in progressively more challenging applications until it causes a disaster. From a business perspective, in a given organization, every employee tends to rise to his/her level of incompetence. 

Most of the executives in this company are working at their level of incompetence. Which may prompt the question: How do we continue to achieve growth and success at this company?

The answer is: The company runs itself. Licensing revenue is based on royalties. As long as the brand is strong and the Licensees do their job competently, we require very little competence on our side. You've got to love a business like that...

The upside for me is I still have plenty of room before I hit my head on the ceiling. The downside is I hit my head against the wall daily because I work with idiots.

And my boss Mulhausen is king of the idiots. He might be a smarter man if he wasn't so insecure. But his insecurities drive his decisions. If I explain why his decision will lead to failure, he becomes more adamant he has made the correct decision. If I agree with his decision, he becomes doubtful that he made the correct decision. And if I go a step further and say, "I was thinking the same thing," he reverses his decision. At least I know how to get what I want.

As with all successful executives at this company, he knows very little about his field of expertise. Unlike all successful executives at this company, he does not depend on his staff (who do have the expertise) to help him make decisions. Instead, he justifies his decisions by speaking about "Widgets".

He believes anything can be explained with widgets, which are pretend products usually used to illustrate business complexities in college. So he uses pretend products to validate his pretend decisions. So when I asked him why he didn't approve developer licenses for the latest development technology, he says: 

"If we make blue widgets and red widgets, but it's more cost effective to produce older green widgets, we're going to need to make some production changes."

"I hope that doesn't somehow mean you're advocating that we use the outdated technology..." I say.

"Did I say that?" He asks.

"You didn't say anything," I say.

"I didn't say anything about technology."

"Right. You said something about widgets."

"And what is a widget?"


"Then how can you possibly assume my comment has anything to do with technology?"  

So I went to Fessler and told him that Mulhausen wouldn't approve the licenses, which means an automatic approval from Fessler. This will piss off Mulhausen considerably, but I will just tell him that I am only producing green widgets with the licenses as per his request. 


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