
Why Incompetence Spreads Through Big Organisations - Anon84
http://www.technologyreview.com/blog/arxiv/23800/
======
gjm11
This is about a (rather bad, I think) paper investigating a _really extreme_
version of the Peter principle: what happens if competence at one level is
_totally uncorrelated_ with competence at the level below? In that situation,
duh, it turns out that you want to promote the worst-performing people.
(Because they'll do just as well after promotion as the best-performing
people, by hypothesis, but promoting them out of the lower level makes things
better at that level.)

The paper takes a purely empirical approach (simulate an organization with
given performance characteristics and promotion rules, and see how well it
does according to an ad hod measure), and it doesn't even seem that its
authors have understood why it's obvious that under what they call the "Peter
hypothesis" -- which is not in fact quite the hypothesis Laurence Peter made,
and neither is their version of the Peter principle correct -- promoting the
worst performers is best.

The paper also considers a "Common Sense Hypothesis", namely that competence
at different levels is strongly correlated. Unsurprisingly, the authors find
that promoting the best performers works then.

Of course, reality probably doesn't quite match either the overoptimistic
"common sense hypothesis" or the overpessimistic "Peter hypothesis". The
authors apparently think that a good way to deal with this is to ask what
minimizes your worst-case losses if you know that one of those hypotheses
holds but don't know which. So they recommend either promoting at random, or
alternating between promoting the best performer and promoting the worst
performer.

It might be interesting to do a study like theirs using more realistic models
of employee performance at different levels of the hierarchy, but I don't see
much value in what they've done.

(Let me speculate mischievously that the authors are probably quite good at
what they mostly do for a living; perhaps the apparent lack of correlation
between that and their success in investigating the Peter principle is itself
evidence for their version of the "Peter hypothesis"...)

~~~
Retric
I think the basic problem has more to do with the inability to verify how
competent someone is. In the real world I suspect the ability to fake
competence is often what is promoted to the highest levels.

But, let's assume each level is independent on every other level and higher
levels are also more important. Now how do you promote people? Well find a
general measure of how good people are at anything let's call it "g" and then
promote people based on that. You are probably thinking that's not fair. Which
I think is the real reason people get promoted. If you dangle the possibility
of promotion you get people to keep working for a lower immediate reward in
the hopes that they will end up being promoted.

So promoting people based on competence at their current job might just be a
carrot to keep people working hard for lower rewards.

~~~
stcredzero
_I think the basic problem has more to do with the inability to verify how
competent someone is. In the real world I suspect the ability to fake
competence is often what is promoted to the highest levels._

Not so much as an inability to verify, as it is an ability to fake, then.

A sword can still cut a man fatally. But on the modern battlefield, no soldier
is going to let you get close enough to use it.

In other words, the system is going to be gamed. Only systems that are robust
against gaming will succeed. Systems which can exploit the gaming will thrive.
(Perhaps Digg and Reddit are examples of this?)

------
param
The company that I work in starts giving you responsibilities from the next
level without a promotion and you only get promoted if you have completed 1
year of performing the next level responsibilities _well_.

------
alphazero
"Sorry John, we can't promote you. You're just too good at what you do."

It would have been far more interesting to investigate alternative structures
for large organizations. And in terms of strict hierarchical systems, the
omission of a consideration of the military is rather glaring.

------
thisduck
How about training people in the skills they will require for their new
position?

~~~
rbanffy
Training can change the wiring of someone's brain as much as swimming classes
can turn people into fish.

------
jimfl
This is especially true in technology companies, where the people skills
needed in managers are generally not those possessed by the most high
performing leaf nodes (who may tend towards dweebery. You know who you are).

------
known
Could be due to <http://en.wikipedia.org/wiki/Pareto_principle>

------
udekaf
Society is hierarchcal. It is even more interesting to apply the suggested
methods to pick a president in USA.

~~~
jimfl
In what way is society hierarchical?

Hierarchy is generally a poor way to organize things, unless you happen to
need to fill space (which is how nature uses it). If you arrive at hierarchy
as a solution to a problem, you have most likely misunderstood your problem.

~~~
udekaf
Most of organizations in our society have hierarchical structure. The
goverment, military, academic, enterprise show you the hierarchical traits in
position titles. The pyramid is necessary for managing responsibilities and
decision making. Social stratification is normal to all societies to some
extend.

~~~
kareemm
> The pyramid is necessary for managing responsibilities and decision making.

It's actually _one way_ of making decisions and managing responsibilities.
It's likely the most common because it evolved from the manufacturing-era
model (think Henry Ford making cars). Ford's model evolved from looking at the
military.

Ford has a famous line - “Why is it every time I ask for a pair of hands, they
come with a brain attached?”

It's possible that a pair of hands that took direction would be ideal in
Ford's system (though I doubt it - Honda's done much better by actually
harnessing the brains connected with the pairs of hands). But that
hierarchical model is counterproductive in today's knowledge and networked
economy: you _want_ to use the resources and knowledge at all levels of your
company, and that way you do that is by decentralizing authority and decision-
making power to the edges.

Look at the open-source model of building software; it's pretty damn far from
hierarchical, and it's at least as successful at creating value compared with
the more hierarchical model most software companies use.

~~~
udekaf
No doubts that open source model creates vast value to software industry, but
that model is distributed only in terms of the big picture. If you look at a
specific open source project, it's probably still organized in a hierarchical
way. It still needs a leader to do the high level design and decide direction.
New commers still need to climb the ladder - by contributing to the project -
to a point before they can significantly affect the project.

------
Vitaly
thats the exact definition of the "Pewter Principle"
<http://en.wikipedia.org/wiki/Peter_Principle> Everyone are promoted to their
level of incompetence. If you are good at something, you'll get promoted until
you are not that good anymore (i.e. its 'too big' for your skills)

in other workd (wikipedia): "anything that works will be used in progressively
more challenging applications until it fails. "

