Why Do We Keep Wasting 10-30% of Our Best Managers?

Improve Your Leadership Pipelines with Decision Styles

Professor Rikard Larsson, Lund University & Decision Dynamics, CEO & Dr Katarina Kling, Decision Dynamics and Executive Advisor, Annette Elgaard Bøttger, CfL

The Peter principle that people tend to become promoted to their level of incompetence was published already in 1969. It was preceded decades earlier by such suggestions as that of José Ortega y Gasset: "All public employees should be demoted to their immediately lower level, as they have been promoted until turning incompetent" (Wikipedia).

We published the probably largest leadership pipeline study in the world of 180 000 managers in 50 countries, spanning from first line supervisors to CEOs in Harvard Business Review (2006). It basically confirmed and extended the Peter principle almost 50 years later by proving that the Decision Style success profile at a lower manager level is clearly different from the success profile at a higher manager level.

Furthermore, the success profile at a lower level are quite similar to the failure profile at the next higher manager level. This indicated that how we make decisions effectively at one manager level is not a good predictor for success at the next manager level. Thus, promoted managers need to change how they make decisions to better fit the different success requirements at the new manager level.

And yet, who do we still typically select to promote to a higher manager position? Almost always the best manager at the previous level! What tends to happen? The organization loses, for example, their best supervisor and often instead gets one of their worst middle managers. Both of these losses are very costly, but that is not the end of it.

We need also to replace the lost/promoted supervisor. With whom? Typically, the best non-manager who then gets promoted to become supervisor. With what results? We also lose the best non-manager and typically instead get one of the worst supervisors. Both these extra losses are also quite costly, even though at a more limited, lower level.

What are the benefits for which we are incurring all these losses? Often none. We claim that we promote good managers to keep them, but the actual outcome is that we not only lose the best supervisor, but also add three more losses instead of getting anything positive.

The bad “news” is that we have been on average wasting 10-30% of our best managers by over-promoting them for decades based on the seriously mistaken belief that the best predictor of future success at one manager level is the past performance at the previous, lower manager level.

The good news is that Decision Styles can be used to both chose managers who have greater potential to succeed at the new manager level and prepare them better by developing what they will need the most for this new position already during the onboarding process.

CfL can help you and your organization making use of Decision Styles to greatly improve the selection and developing of managers along the leadership pipeline, including reducing the common waste of 10-30% of your best managers.