Avoiding the Peter Principle

The Nightmare of Business Management

Business Management has always posed a dilemma. There is no “right way” to managing a business. When it comes to your own business, dealing with the problem will ultimately determine success or failure.

If you are running your own small business (or home business), how much management skill do you need? Is it a time to start looking into Business Schools? You can get additional assistance from the Small Business Administration because they are there for your success.

One thing for sure, you want to avoid the Peter Principle.

You know that principle! In a brief description, it comes down to this: you will rise to your level of incompetence. Another way to look at this is: success will be pushed until ultimate failure occurs.

Avoiding the Peter Principle

How can one find the right path and avoid the Peter Principle while maintaining the level of productivity they seek? This is an age-old question that eludes definite answers. What does it mean to rise to the level of incompetence? For starters, you may be skilled in one aspect of

Your business. You have another task to perform that you are not trained in, but you take it on and barely get by. Then you have another responsibility beyond your skills. You push forward like this until your ultimate demise. Failure

One person told me to take an inventory of your weaknesses. Now, with that list, work on strengthening those issues until you are proficient. Another person told me to take an inventory of your strengths. He said to improve those areas and become as efficient as possible. He then said everything else (the other skills) that you are weak in, outsource them.

Side note: I read a story about a young man in college. He called his father to ask for some advice. He told his father he didn’t keep up on his studies in his accounting class because it didn’t interest him. His father asked how he got by so far. He said he had a friend write his papers for him. He paid him with a 6-pack of beer. His father told him: “Congratulations, son, you have learned how to hire your first accountant!”

Working on Those Skills

We forget from time to time what our goals are and what our business is all about. 

Most people can’t wait to get out of school so they can start their careers. The truth is you have to have the mindset, “you are always in school!” If you don’t, you are right on schedule for applying the Peter Principle. You ever hear this one: “Anyone that takes advice from himself has a fool as an advisor.”

Most people are well-meaning. There is an abundance of Internet Businesses available. Surely you can follow someone’s lead and have a successful business of your own! As I said, most people are well-meaning. Most Internet businesses, Network Marketing businesses, etchave a hierarchy of management. This can be good or bad. 

What determines business success? It starts with you! 

Are you ready to learn?


About the author

Catherine Martin-Sampson is a founding member of the Compumatrix. She has recently retired from Teaching (Special Education) She has a variety of experiences that she incorporates into her live and let's them flow from mind to pen.


  1. I can’t tell you how many times I had seen this “Principal” in action when I worked in the corporate world. I felt sorry for some of the people because they no doubt were in over their heads and were struggling. Yet, one step down on that corporate ladder they were doing great!!

  2. Wow, Catherine, you brought a subject to light that I haven’t thought about in quite a few years! I recall reading that book, The Peter Principle, many years ago and it made a lasting impression on me. Over the years I witnessed it playing out with people in the various corporations I worked for. It was sad because it really could have been avoided, but I think greed gets in the way.

  3. Never heard about this principle, nor did I attend no business school.
    I worked with my father in a small family business of laundry parts. He taught me how to manage the inventory, while we had an employee who did the sales and my father did the repairs. We did well but I never learned the real business of it for my heart was not in it.
    Compumatrix, on the other hand, is my passion for I see my future in it with no corporate ladder to climb or peter principle to follow.

  4. We get our education in school, college. But, the university of life teaches us much more. When we learn, people say we have experience. But that learning comes from the mistakes we commit and then we get that “experience” . Seeking advice from the right people is a good way to go. Picking a career or a business that suits us most, would also help to head in the right direction and keep that Peter Principle at bay.

    1. Raju, we call that learning from the school of hard knocks. I agree, though, the best way to learn is from life. Life will hand you all sorts of situations and it will also hand you your butt if you try to be something you are not, or not ready to do yet. I have never read that book “Peter Principal”, but I have sure seen it in action.

  5. oh so much agree with the replies here on seeing the principle in real life action both in corporate world and in life in general — also i believe you find your strengths and you work on those abilities and the weak parts you find the necessary professionals that you can trust and success is not far away as long as your definition of success is not over the top — have passion for whatever your biz is and grow your expectations as you grow as a business —

  6. Catherine excellent article! I didn’t know Peter’s Principle … 32 years ago I started my journey as an entrepreneur, I had successes and some failures, and today I know that the failures were due to a lack of guidance and knowledge. But as I am resilient, I turned around and I’m still in entrepreneurship, but now always trying to learn

  7. Our Corporate ladder is actually an elevator. You get in (involved = engage). You chose the level, push the button, and wait for the doors to open at that level. And yes Gail, it is sad to see someone that does an excellent job at one level then promoted to a job that they can not handle. At least here we can move at our own pace.

  8. I have never heard of the Peter Principle. I absolutely love the accountant story! It all comes back to mindset. What a great success lesson for all of us. We are our own boss of our success moment to moment. We can choose our path to success from the contract with have experienced from our failures.

  9. Be a sponge otherwise fall into the practice of the Peter Principle. If one is willing to learn and absorb new ideas and concepts, they will never fall victim to the Peter Principle. I mean who would want to keep their same level of intelligence through their entire lives? I want to become more intelligent the older I get. You know that saying – the older you get the wiser you get. Well after reading this article, I realize that will only happen if one is willing to be a “sponge”.

  10. That Peter was a clever guy! Personally I have learnt through trial and error that it is just not productive most of the times to try and learn and do everything that a business entails and do it all well…And yes you will learn new things and push yourself beyond your current skills sometimes it is less stressful to outsource those. One example for me was learning how to operate a computer and all that can encompass which is so necessary in business now. This was something that wasn’t taught in school or university when I was attending. Consequently, it involved a lot of asking questions, I mean a lot! Until one poor fellow asked me, “Don’t you have some kids at home to help you? I didn’t, so I learnt to spread my questions around lol

  11. Once upon a time in 2007, my son who was 16 at the time, told me he wanted to be a mechanic. He asked me to buy an auto repair shop. Now I have always believed in NOT going into a business that you know nothing about…..but he was my son (mistake #350 be careful when your emotions are involved). So I bought a garage and trying to avoid The Peter Principle, hired an expert mechanic to teach and to lead. What I failed to do was find out if he was an ethical, honest man (he wasn’t) and in the end stole everything.

    I lost the business along with quite a bit of capital because of him, but mostly because I failed to follow the teachings of this article. Had I understood the Peter Principle better, I would have never bought the garage. The silver lining, however, were the lessons that I and my son learned the hard way. Thank you, Catherine, for such an excellent article!

  12. The Peter’s principle is about promoting people to a level of incompetence, a level where they will stay for the rest of their working life. It is not good for a company. There are however some managment tools that can avoid this mechanism. Training is one of them. Training people to avoid incompetence should be on every managers mind. And if training doesn’t work there is only one way left: demotion. That can have a positive effect as well, how harsh it may seem.

  13. I enjoyed your article, Catharine. I had not heard of the Peter Principle. Your comment about a need for business school caused me to chuckle because, at my age, I am considering taking a course in business management for my peace of mind. I have managed businesses from home in the past, but with new technology and spreadsheets, etc. I feel the need to be retaught. My need to take a course in computers is foremost, that I am may be more efficient. I have had a desire to take courses in the study of rocks, geology, petrology and mineralogy, and gemology, the study of precious stones. Ever learning, you say, yes, we are. There is a greater desire within me now, to learn than when I was younger.

  14. it is amazing to me that all the learning that we go thru each and every day –that we still fall prey to being taken advantage of and get our back side drained — if you literally work smart and take action wisely the principles discussed here will not be as devastating as they could be — if you have passion and take appropriate action success is the answer that you will have — jmho

  15. Exactly, the growth and sustainability of any business set up. Depends primarily on the management skills inputs. If you lack the required skills, then you are supposed to outsource. Normally, the best manager will always identify and solve any problem at hand amicably. Also, at any point of time creativity and technical skills will determine your next level.
    About the online business industry, you must engage a thorough research and analysis. I have been a victim in several occasions. As we always say, once beaten twice shy. The only company that I always give credit and trustworthy at 💯% is only “Compumatrix”. But the rest I always run for my life.

  16. after reading a few other blogs around here the last few days it is fun to come back and read this again and see so much of this and so much from another blog and then replies and history in those replies and put it together and wow close to having business pros right here — yeppers that is good thing for business training and success in very near future —

  17. Catharine a lovely article. I read the book as a teenager written by Lawrence Peter and Raymond Hull.I have seen people rise reach the level of incompetence. folks reach a Final Placement {Peter’sPlateau}The promotion from thereon is stifled and as they put it IN time every post tends to be occupied by an employee who is incompetent to carry out his duties .

  18. Thank you Catherine, what a great blog. I didn’t know the Peter Principal either so what a nice little read. Many of us have failure and success in our past but all that matter now is that we are here, learning together. It’s all about mind set. I can’t wait for our success here we are rolling towards happiness or more happiness.

  19. in any business it is not an easy push forward however as the business training or thought process grows — we as entrepreneurs must work thru the ups and downs of everyday life — when in business the less you take the downs personally the simpler each day become and the more certain your own success will become a part of your day — the peter principle is something all of us can learn from — fact —

  20. this is a great read and truly very important to understand more and more of this principle as business here is reached and moved on from going forward and succeeding as a business entrepreneurs — so much learning info here and just takes time to read and research and the wisdom n success is just matter of time —

  21. still learning and reading so many great postings through out this blog area — and so much agreement in the thought process of this info — agree with this thought of when don’t know hire it out to pros — not just taxes but other things if you are not proficient — but honestly as former biz owner best time of my life —

  22. I am not sure you would call it the peter principle but I worked my way into management salary instead of hourly and I basically lost my life because of long hours and weekends….they take advantage of salary associates….so 7 years of that forget it went back to peon got my life back and I also tried working 2 jobs for 10 yrs no good lost life again so back to peon and happy with life but poor…..lol…..waiting for compumatrix the answer to all.

  23. Catherine, Great blog! I didn’t know much about Peter’s principle,we learn a lot from our educational institutions from childhood to adulthood,but when we step into practical life, it is different,we use our academic ability,but we make a lot of mistakes, we learn a lot from these mistakes and in the end we succeed,we have learned a lot and are learning more over time in compumatrix,life is all about learning, there is no age limit.

  24. The blog mentions avoiding the Peter Principle comes down to rising to your level of incompetence and that another way to look at this is success will be pushed until ultimate failure occurs. A way for me to interpret is that someone should try to avoid overworking a business to the point where they become burned out. While I do not think that failure is ultimate, feasible goals should be set to avoid discouragement if they cannot be met.

  25. The mention of the Peter Principle brings to my mind the fictional character Peter Pan. Peter Pan is based on the idea of a man-child that does not take life or responsibility seriously and does not progress in life. So I can see what I see as the Peter Pan principle being an approach to avoid in moving a business forward.

Leave a Reply

Your email address will not be published. Required fields are marked *