The Peter Principle dates to 1969 and describes the folly of promoting someone based on past performance instead of the abilities needed for the new position. It's usually a shorthand for promoting people to the point of their incompetency. As an experienced sales person, I've seen that what often makes a great sales person is not what makes a great sales manager.
High performers focus on themselves, constantly adapting their strategies to reach their goals. The ability to self motivate helps sales people navigate the volatility in wins and losses yet remain focused and energized. High performing sales people often have characteristics such as confidence, resilience, independence, focus and optimism. Sales people who succeed have honed their specific skill set.
A manager, on the other hand, is responsible for their team. They need to motivate and develop their team. Unless properly trained to manage diverse personalities, many sales managers coach and motivate their sales people in the same model that worked for them. This can lead to sales organizations hiring a particular type who has been successful at the company. Often this makes sales organizations more homogenous. Now you have the conditions for underperformance.
Management science has shown that diverse teams produce better results. They are better at decision making, and there are many studies showing that gender diverse teams outperform male-only teams with higher sales and profitability.
Also, in sales, homogeneous teams run the risk of not reflecting the customer base they’re targeting. This often leads to reduced customer insights.
So, how can sales organizations avoid the trap of the Peter Principle?
First, sales organizations need to do an inventory” of their group’s identity. Demographic data is important, but so are other characteristics. At The Impact Seat, we look at diversity across several dimension including cognitive styles, networks, past work experience, values and other measures that comprise identity.
It’s important to note that people aren’t diverse. Groups are diverse. A person’s identity doesn’t change when they join a group, but the group’s identity does. So, when you compile all the individuals and their identities, you get a picture of the group’s diversity.
Second, examine the gaps. Examine which characteristics are most common. Are those characteristics dominating your culture? For example, there’s a common misperception that high performing sales people are extroverts. Research and our own analyses consistently show a mixture of extroverts and introverts. What are the implications of knowing this? Are there behaviors in your group that favor extroverts? Look at your organization by seeking the outlier characteristics of your team on all dimensions.
The best way to make your existing team more inclusive is to examine existing behaviors and pick apart the various habits. For example, how do you conduct your team meeting? Do you provide information well in advance so that people are comfortable with the material and can comment on it? Do you ask people to submit questions or comments before the meeting? Who does most of the speaking at the meeting? Document every aspect of the meeting you can think of and reflect on what type of person it favors.
Often when we think about diversity, we think solely in terms of demographics such as race, gender, age, ableness and sexual orientation. As an earlier blog post mentioned if you only focus on demographic diversity, you are missing the opportunity to have a more inclusive environment. Representation counts, so set a hiring goal for hiring people from underrepresented demographics. At the same time, be aware of how the candidate adds to the culture. Do not use “culture fit” as a screening criteria.
Sales organizations face particular challenges when filling the role of sales managers. Manager candidates need tools and strategies to work with their diverse teams. By carefully examining the diversity of the group, looking at the routine behaviors and rethinking recruiting, sales organizations can have a good chance of avoiding the Peter Principle.
Carol Roby is Senior Vice President of Client Engagement at The Impact Seat, Boston, MA. Connect with her via LinkedIn @CarolRoby