We’ve all heard of the Peter Principle, which states that “in a hierarchy, every employee tends to rise to his level of incompetence.” One special flavor of the Peter Principle is something I call the Derek Principle (my apologies to those of you who share the name), after a brilliant software designer I once worked with, a young man who could apply his creativity and ability to work tirelessly toward the solving of some of the greatest technical challenges our company ever encountered. So skilled was he in the disciplines of coding, flowcharting and testing against all conceivable possibilities, that his manager naturally made the mental leap that Derek would make a terrific manager, able to lead and inspire others to the same high level of performance.

Hadden richard
Co-founder / Contented Cow Partners, LLC
Richard Hadden is co-author of the book Contented Cows STILL Give Better Milk. He delivers keynot...

You don’t even need me to finish the story because you know the outcome. Fortunately for Derek, after he failed in the role to which he was so poorly suited, he was able to find a position with another company where no one knew his history and therefore didn’t see his new job as a demotion. Not everyone is so lucky.

Derek was great with computers, but with people, not so much. He could get software to do anything he wanted, but he didn’t have the same skill with other talented programmers. He alienated those he was intended to lead and, while he loved to develop computer systems, he had no interest in developing others around him to be their best. And that’s a big part of the leader’s role.

Curiously enough, evidence abounds that there’s little, if any, correlation between operational skill and either leadership or management competence. Our schools are filled with principals who were great in the classroom but not in the front office.

Businesses suffer with managers who’ve left their best days behind them. And you’ve all probably known a cow handler or two who was promoted to people handler without any reason to expect him or her to succeed in a role that calls for vastly different skills.


It’s a classic scenario. We need a manager, so we go to our best technician on a Friday afternoon and say, “Congratulations. You’ve just been promoted to manager, and you’ve got all weekend to get ready.” This has been especially the case in the last few years, as the economy has caused many businesses to abandon leadership training and make it a do-it-yourself project for their managers.

There is a better way.

Begin by identifying potential leaders from their first day on the job. Who on your current team has risen to a position of informal leadership, conferred on them by their peers, without any official designation of that status? You can spot these folks when a crisis or particularly tough situation arises.

Who takes the ball and runs with it, and who waits on signals from others? It’s important not to equate leadership skill with strength of character. We’ve all known very good people with great integrity who contributed more by following than they would have by leading. Let them stay there and grow in place.

Before promoting an individual contributor to manager, ask yourself if the person you’re considering has ever expressed an interest in taking on the larger role? If so, how, and from what angle? Have they told you they’d like to be a manager, taken any concrete steps to progress in that direction and pursued training in leadership or any other skill they want to develop?

Have they sought out a mentor, already serving in a leadership capacity? Find out what’s driving the interest in moving to a management job. Is it because they want to be the boss? Or to make more money? Or do you sense that it comes from a desire to serve others, and the company, in pursuit of the organization’s goals?

When considering moving someone from operations to leadership, do a head check and a heart check. Chronic complainers and malcontents, no matter how good at their jobs, make lousy managers. And the number one qualification, bar none, of an effective leader, at any level is – are you ready? – that they care about the people they lead.

I’m not going all touchy-feely on you here, but we know that people simply reserve their best effort for those who genuinely care about them as human beings. Period.

We also know that before someone has any hope of leading others, they must have their own game squared away. Watch how your management candidates treat others, and not just at work. I once traveled with two guys, both good salespeople, and both of whom I was considering for a promotion to sales manager.

On the trip, I noticed that Bryan was unfailingly considerate to restaurant servers, flight attendants and hotel clerks. Todd was impatient, pushy and talked down to those trying to help him. I promoted Bryan, and it turned out to be the right choice.

How are your potential leaders at managing their time and priorities? Are they comfortable in their own skin? Do they like themselves (but not too much)? Humility and authenticity are two vital attributes of effective leaders.

Look for top performers who are more likely to give credit for the work of those around them than to take the credit themselves. Where are they on the maturity scale? And that has nothing to do with lines on the face or hair color. One of the best leaders I ever worked for was two years younger than me. And I was only 25.

Finally, notice how your potential leaders respond to the ideas of others. Both those who accept too much at face value, and those who dismiss everything as “not invented here” will have a hard time engaging those they lead in improving the business. Workers who are constantly looking for better, faster and smarter ways to get things done, regardless of the source of the idea, will outperform others in massing the collective energy of their teams toward your company’s success.

Once you’ve determined who would and who might not be right for an upward move, let me suggest these two courses of action. First, for those destined in your mind for leadership, help them be successful with leadership training, support and feedback before and after the promotion. And for those not best suited for management roles, remember the phrase I used earlier – let them grow in place.

Don’t allow them to stagnate simply because their position on the org chart doesn’t move. Help them develop new skills and additional ways to be part of your company’s success. And remember that things change. Revisit their inclination and potential for leadership from time to time, and then act on what you see.

The second-most-important job of a manager is to decide who does and does not wind up on the payroll. The most important job is to choose the leaders. PD

Hadden is co-author of the new book Rebooting Leadership . His company conducts leadership training and employee surveys.


Richard Hadden
Contented Cow Partners, LLC