“The Peter Principle” is a book written by Dr. Laurence Peter in 1968. It was written as satire but contained enough truth that it touched a nerve with employees around the world. Today, the concepts in this book are accepted as a harsh reality. The Peter Principle observes that employees rise up through a firm’s hierarchy through promotion until they reach a level of respective incompetence. As a result, every position in a given hierarchy will eventually be filled by employees who are incompetent to fulfill their job duties.

Clearly, Frank and Ian are proof of the Peter Principle with this podcast so we consider ourselves experts on “earned incompetence.” In this episode:

  • Why most people won’t turn down a promotion they are not qualified for
  • The mistake most companies make when promoting people
  • How good timing contributes to so many people feeling they are better than they are
  • Why do so many incompetent people get promoted?
  • Fancy titles with no direct reports are the first to go during a recession
  • Why highly competent people are pushed out of companies
  • Why are there so many terrible senior executives?

Watch the episode here:

Listen to the podcast here:

“The Peter Principle” – Have You Hit Your Ceiling?

Do you still have that frame with all of your business cards from NVR?

I do.

Frank has a frame that has sixteen different business cards because he had sixteen different titles while he was at NVR. You can see clearly that almost none of them are taking them up the hierarchy. They’re all sideways where people were just trying to find ways to get Frank the eff out of the way. We will probably come back to that frame multiple times in this episode, especially some of the more specifics of the Peter Principle of how people hid Frank like a shell game in New York City with a quarter.

Frankie.

Ian, you son of a bitch.

We’re back. Frank, it looks like you got power in your house now. Did you get the power back?

LMSM 48 | The Peter Principle

The Peter Principle: Employees rise up through a firm’s hierarchy by being promoted until they reach a level of respect and competence. And that is where they stay screwing things up and not doing much of anything for the rest of their career.

 

I got the power back.

We’ve had a nice string of thundershowers here that have been messing with the grid in Virginia. Frank’s been on the end of days in his house.

For those of you that don’t know Ian and me personally and my guess is by our listenership, there are many of you. In case you never met either Ian or me, neither of us is struggling to find where our next meal comes from. I got two kids. The whole house is set up. The power was out. There are flashlights and all kinds of stuff. The first thing I thought about is to text my wife like, “What are we doing about dinner?” She’s like, “I got dinner solved.” I’m like, “What’s the plan?” She texted me, “It was a fine plan.” She was going to use the gas on the stovetop and make some dinner.

I got home and for some reason, I didn’t know where my next meal was coming from. The power might not be on for days, even though it was three blocks from the house. I ended up eating. I texted Ian, “I ate like a refugee.” Ian goes, “Refugees are broke. They don’t eat a lot.” I’m like, “No, I didn’t know where my next meal was coming from. The power had come on halfway through dinner and I kept eating burritos just in case the power went back out.”

The end is near. The power’s out. It takes three days for a society to go into complete anarchy if the power grid was completely lost. It took Frank three minutes to start eating his kids’ mac and cheese and stealing both of his toddlers’ food. He’s ripping it off.

My wife looks at me and goes, “Did you eat the entire skillet?” I’m like, “Yup.”

I was giggling when you said it because eating like a refugee, I didn’t know what that meant. I’m like, “Does that mean you ate a lot? Does that mean that you starved yourself because the power is out?” I’m leaning towards you ate a lot knowing you, but I needed you to tell me what eating like a refugee means.

It’s always my fault. This in no way has anything to do with what we’re talking about, but we thought it was a funny story, just like this is a funny story. Ian and I have been away. He was in Greece. I was away with some high school friends hiking. One of my buddies has a body that is not enviable at all. He’s not fit. He’s constantly eating chicken wings eat in every meal. He eats like I do when the power goes out constantly. He started leaning into me and giving me some dietary advice. I stopped and looked at him like, “Are you under some illusion that I want to look more like you?”

Frank goes, “I hit rock bottom and I got some diet advice from Murph.” Frankie, we’ve had a three-week break. I am super excited to be doing the show again. We are kicking back off with The Peter Principle, which is a book that was written by Dr. Laurence Peter in 1968. It was written as satire, as a joke. The whole concept of the book is that everyone has a ceiling and if you wait long enough, you’re going to hit your ceiling at some point. His observation is that employees rise up through a firm’s hierarchy by being promoted until they reach a level of respected incompetence and that is where they stay screwing things up and not doing much of anything for the rest of their career.

He wrote it as a joke. It’s a hilarious book. What’s fascinating is it’s become a serious management book. Very quickly, it became popular. The Peter Principle is something that, in most companies with people that have been around long enough, people talk about. Someone who’s lingering around like a bad odor in a position and not doing much, they’ve reached their Peter Principle. They’ve Petered out. His whole concept is every position in a given company will eventually be filled by employees who are incompetent to fulfill the jobs of their respective positions, which is dire and negative. You got to look no further than this podcast for proof of this concept. I feel like you and I have absolutely reached our peak level of incompetence by trying to do a show.

The best managers were not great doers. Click To Tweet

We have not done an episode in weeks. I hope we haven’t lost our ability to podcast. I don’t know if we ever had it.

We’ve been incompetent from episode one.

In addition to that, to show you that I’ve hit my Peter Principle, I’ve never read the book. Right off the bat, I want to put that out there. I’ve reached my Peter Principle with The Peter Principle.

You did read all of the book reviews that I sent you on it, so that was good.

I’ve scanned them.

As incompetent you are, you waited until just before for me to read them to you because God forbid you do any prep for one of our episodes.

Why would I?

That would show competency and that might get you promoted again. You want to stay right where you’re at as a co-host of a podcast.

What I’ve learned is, no good deed goes unpunished. Anytime I show initiative, someone wants me to do it again.

You’re afraid I might say, “Great job, Frank. Do the next.”

“Write another agenda.”

You’d be screwed.

My brother-in-law, on his first date with his wife, made her a ham sandwich. That was their date. That was setting the bar low.

The guy’s got a plan. I like it. In the entire cartoon strip, Scott Adams became a multimillionaire writing Dilbert. In essence, Scott Adams has been quoted as saying the whole Dilbert principle is based on the fact that people are promoted to management positions to get them out of the workflow, to get them out of the way. He did that strip for many years. It’s a highly successful comic strip based on The Peter Principle loosely. That’s what Dilbert is based on.

I can tell you from having worked in two large companies that my experience is incredibly consistent with everything that Dr. Peter has written in this book. I’ve seen every chapter. I have seen it live. I’ve seen it work. One of the big reasons for it is most people won’t turn down a promotion, especially if it comes with greater pay and prestige, even when they know they’re unqualified or they know they don’t have the skills for that job.

When you are promoted, some stitch of pride triggers in you like, “I’m being trusted. I’m growing.” There’s also a fear of most people becoming stagnant. “If I’m offered a promotion and I turn it down, I’ll never get offered this again.” Companies are filled with people who probably knew they shouldn’t have taken that last promotion but did anyway because of money, power, prestige and the fear of going backward in their careers.

The Peter Principle: You see such level of incompetence is because you promote the best performer into a management role. What made them the best performer are some of the same attributes that would make them a terrible manager.

 

Scarcity plays into it a little bit. They think, “If I don’t take this now, I’m never going to get it.” There’s a part of that. If you go and you look at the Washington Monument in DC, there’s a permanent mark on that monument because when the Civil War broke out. It was half-built and they didn’t get back to it for twelve years. When they finally got back to it, the stone and the quarry look different, so there’s a line. It’s there forever.

It’s almost like you can measure when certain people were promoted based upon what’s happening in the economy. When the economy is strong, there’s this flight of weakness into management but the people who make it through the next recession and that are still there, are some of the better ones. You notice there’s this bloat in companies with even at the rank and file all the way through management when the economy is strong because you have a bodies problem.

It’s interesting when you think about that. I love the quarry example because if you go look at a resume, someone got to a position and they stayed there from 2008 to 2015 or they had six different companies they worked for between 2008 and ‘15. There are 1 of 2 things you find, but there are few people getting promoted in the seven years from ‘08 to ‘15.

One of my favorite movies and Ian and I’ve talked about it a bunch is a movie called Margin Call. It is a movie that takes place in the last downturn. It’s about a bank that is in dire straits and they were going to have to fire a bunch of people. They fired actors and actresses we like. They fire Stanley Tucci and Demi Moore finds herself on the outside looking in, but there’s this young kid. Someone goes, “Are you going to fire him?” He goes, “No. The guy’s getting promoted. He’s the opposite of the Peter Principle. He was underutilized in his role. He saw something and he’s going to skyrocket up. His economy’s fine even though the broader economy is bad because he’s so good.”

He’s also incredibly low-cost. It’s the other thing. He’s not making crap for money. You can promote him for relatively peanuts during a bad economy work versus the other people that are making 5X of what he’s making with options. They’re the first to go because they’re not adding value anymore.

This is slightly askew of what we were going to talk about, the Peter Principle, but during a bad economy, what normally happens is you go to what I call my life raft. Who’s on my life raft? Who are the people who are going to help me get through this bad economy? You give them more opportunity, typically more pay, and then you get rid of a bunch of other people. You ride it out with that life raft through because they’re the best of the best. In big companies, people have gotten into these roles, especially in good economies, where they don’t belong there. It’s like a post turtle. They don’t know why it’s there and that’s what we’re going to talk about.

Frank, have you ever turned down a promotion?

The answer is yes. It required relocation and a move, but I turned down that promotion.

It was Nashville, wasn’t it?

It was.

Was that probably more based on location?

I liked the role in general. I disliked the role in that division with that company because it’s a slightly different company in that geographic location. When I was younger, in the outback, I had opportunities that could propel me into a career path of being in a restaurant and I came to terms with the fact that I’m not a professional restaurant person. I’m going to get a different job. Taking this job doesn’t make any sense.

An incompetent president will hurt your company less than an incompetent division line manager. Click To Tweet

Do you still have that frame with all of your business cards from NVR?

I do.

Frank has a frame that has sixteen different business cards because he had sixteen different titles while he was at NVR. You can see on clearly that almost none of them are taking them up the hierarchy. They’re all sideways where people were just trying to find ways to get Frank the eff out of the way. We will probably come back to that frame multiple times in this episode, especially some of the more specifics of the Peter Principle and how people hid Frank like a shell game in New York City with a quarter.

Ian and I were just getting to know each other. We weren’t even friends yet. I got promoted to a big job. Ian had to leave the company because they were tired of him, to come to a new company in order to get promoted. I’d gotten promoted a bunch on the company I worked for. Ian came in there and goes, “Congratulations to Frank. Now he’s been promoted nine times mostly lateral.”

I’ve said yes to every promotion anyone ever offered me in a big company.

If I was you, I would too.

Except for one. In the late ‘90s, Six Sigma was the rage. That was Jack Welch’s biggest initiative. It was ravaging through the company. I think Six Sigma is the dumbest ass thing in the world. It’s smart on the manufacturing side because it’s about quality, defects, taking defects out, Kaizen, Japanese, and all that. I get it in an engineering manufacturing capacity, but from a workflow business, it was seeping its way into sales, operations and business. It seemed like a big boondoggle for me for people to kiss Jack Welch’s ass.

I was offered a Six Sigma Black Belt position. At the time, that was a glamorous position, but you had no direct reports. You were just an influence guy. All you did was analyze stuff. If I would have taken that role, it would have been a perfect example of Peter Principle because my skills are not sitting around in a spreadsheet and doing statistical analysis all day. You had to be a real number crunching, nerdy person to do a Master Belt.

I would have been promoted because I was great in sales to come to do a job that had nothing to do with any of that just for the prestige and a little bit more money. I turned it down. I remember at the time, they put a full-court press on me. They put pressure on me like, “This could be hurting your career to turn something like this down.” I remember thinking, “I will suck at that job. I’ll hate it. I’ll have no influence. In a bad economy, that job will be gone. No startup has a title of Black Belt.”

I intuitively felt that I wouldn’t be good and that job wouldn’t stick around long. The truth is a year and a half later, Jack’s gone and Jeff Immelt is in. Those jobs were going extinct like dinosaurs. I’m grateful that’s the one promotion I said no thanks to because I knew I would suck at it, and it went away. The thesis of this whole book is that companies tend to promote people based on one skillset that is not translatable to the next one.

The most obvious one and I see this all the time, especially in a consulting or coaching business, is that you take someone who is a fantastic engineer and you make them an engineering manager. What made them good engineers was the fact that they were quiet, kept to themselves, analytical and studied things. A lot of these engineers put headphones on when they come into work and focus. Now you put them in charge of twelve people where a skillset is being a little bit more extroverted, a good listener, empathetic, someone who’s engaged with all of your people and empowers them.

The two couldn’t be more divergent. A great sales rep is not necessarily a great sales manager. That’s what starts to happen in most companies. Why you see such a level of incompetence is that you promote the best performer into a management role. What made them the best performer typically are some of the same attributes that would make them terrible managers.

It’s laziness or assumptiveness or a combination of both that ultimately gets people into these roles that they are underqualified for. You can see it and hear it in people’s conversations, especially around something like promotion. “That person is good at this. They’ll be great at managing it.” It’s rarely the case. Michael Jordan is the best basketball player ever. He has never been a coach and he’s a shit owner. He’s not a great owner. His friendship with Charles Barkley fell apart because of the fact that he’s not a great owner because he was so talented with work.

I’ll give you a different example of this. I’ve been on a diet for two decades. What I find is I’m attracted to the type of people that have an eight-pack of abs, but that’s the wrong trainer for me. The right trainer for me is someone who’s a little bit overweight. Not fat but not ripped because the ripped person doesn’t have the same problems that I have. That person is a genetical freak that I am not and I can’t relate to it.

What happens in a lot of instances is you’re drawn to this incredible performer. Just because they can hit a three-pointer and can jump from the foul line, they’re going to make a great coach. How the hell you’re going to coach, jump from the free throw, and stuff it in? Nobody else can do that. You’ll see in many examples that the best managers were not great doers.

If you look across Major League Baseball, most baseball managers in the Major Leagues played high-level baseball. There are few Major League Baseball players that didn’t play a little bit, at least in the pros or at least minors got close. Very few of the elite managers over the years had incredible careers. Tommy Lasorda won a championship with the Dodgers. He was the winningest coach of the ‘80s. He had three seasons in the pros, owned four records, 6.5 ERA as a pitcher. Tony La Russa is top five all-time in wins. He played six seasons, had 199 batting average, struck out 37 times and had 35 hits. Connie Mack, going back to the 1800s, 11 seasons, 244 batting average. Connie Mack is the winningest coach ever.

He’s number one.

Billy Martin, 11 seasons with 257 batting average. Jim Leyland, my favorite coach of the Tigers of all time, career 220 hitter in the Minor Leagues but never made it to the pros. Part of that is a guy like Barry Bonds, Darryl Strawberry, someone who’s an incredibly good athlete that goes out and does it on raw talent. When asked, “How do you do it?” They don’t know how to explain it. Whereas in a guy who struggled and didn’t make it, he had to do every little thing right to stay in the League. He had to do all the practice, the preparation and the extra reps. That coach can empathize with anybody on the team and he knows exactly what it took to just get into the League. He had to do everything right and he had to be mentally strong about the game to be there because he didn’t have the physical attributes.

There are a couple of things I could go with this. In joking prep, you and I talked about the difference between Darryl Strawberry and Gary Carter. Gary Carter was a marginal talent catcher and he was probably running wind sprints. Darryl Strawberry would show up with cocaine, hit three home runs and then go party even longer. In business, it’s hard to see inherent talent in any role other than sales.

People who are good with people tend to be in sales and that’s the hardest thing to bottle. You’ve seen a lot of instances that this incredible salesman is going to be made a manager because they’re an incredible salesman, but that’s being gifted like a Darryl Strawberry or Michael Jordan. You’re so good with people you can sell but that does not relate to something that’s transferable where you can teach.

When you’re looking to promote someone, you’ve got to have some results. If you’re going to promote someone, you can’t promote the person who had the worst results because they won’t have any respect. People will assume you kissed ass to get into that job. You got to be top 30%. You got to have produced good results, but it’s almost never the number 1 or the 2. It’s usually number three that gets in there.

The people that have got the better track record got results but they were the ones that always had a line at their door. When there wasn’t a manager around, who do people ask questions? If it’s a sales rep who likes the younger guys and he’s always taking them under his wing. If it’s an engineer who’s patient and answers questions to everyone, spends a little extra time and sacrifices their results. Who informally do people go to when the managers are out of the office? Those are the best people normally to promote because they’re respected that they can get results or you wouldn’t be asking them questions but they’re patient enough where they take the time and try to help people. They’re acting like leaders long before they get promoted into the role.

To state it in a slightly different way, it’s almost like you’re promoting a player to coach. You’re hiring someone into a management role who is already acting in that role. We’ve talked many times on this show about one of our favorite movies, Boiler Room. He was saying in a way that he was more of a scumbag but the statement holds, act as if. If you’re already acting as if you’re a manager, you’re probably going to be a damn good manager.

Act like it. When you get the title, people say, “It’s about time they give him the title. He has been doing that for a year.” With that kind of person, you know you’ve nailed it with the promotion when the office reacts that way. You mentioned that the last recession and milestones on people. Timing is everything. Let’s say you started selling homes in 2019. You come into that and you’re a new home sales rep. You killed it in 2020 and 2021 in the absolute most blistering hot market since 2004 and 2005. You do well and you get along well with management. Everyone seems to like you and you get promoted to sales manager in 2022.

You have a track record and you sold well, but you also sold well when all you needed to do was fog a mirror and be alive in the model and someone would buy homes. Now you do that and a recession hits. As a manager, you’re trying to teach your reps how to do it in a tough market. You can’t because you don’t know because you were so windated. You were in a sailboat and the wind was blowing so hard that you looked great and now you get demoted.

Do you even have the skills to sell in that market? Sometimes people look a lot better. They’re fortunate about their timing. When you graduate, it has a big impact on your career. Are you graduating into a strong market or a weak market? A lot of times, it’s unlikely that if you’ve been promoted in a hot market, that you can regain some of that form because it was a windated performance.

The Peter Principle: There’s one of two types of managers. One manager is I’m going to champion this person because they’re good enough to get more out of them. The other one is going to be scared of this person.

 

As a skilled leader or a skilled manager, you’re going to realize these things in context. You’re going to be able to focus on, “When did this happen? What are the underlying statistics that you’re not physically seeing on the resume or in the conversation?”

It leads us to your favorite scene in the movie, Michael Clayton.

This is something that I can state is real for me. I went to something in the year 2000. It was called Results 2000. I was 25. I went with a bunch of managers. I was relatively new. It was eighteen months out of college. I remember I was there with nine men and tons of people that he announced. Donald Trump was the last speaker. Back then, he was just Donald Trump. He wasn’t the president, he was none of those things. He’s just a rich real estate developer. He told a bunch of meandering stories, but one of the stories that he told that still sticks with me twenty-plus years later is about somebody whose business went tits up and then he decided to get back in and the business was never the same. He no longer had his fastball. He could no longer bring the magic he brought at one point because he’d stepped away.

Was his point, “Don’t step away? Stay close to the action.” What was the point he was trying to make? I know it’s hard to figure out what Donald Trump’s points are most of the time.

That part is still consistent. It was hard to tell the point. My takeaway was, I don’t know if this is what he meant, but as a 25-year-old kid, what I took away was never take your eye off the ball. If you take your eye off the ball and you lose the ability to see, feel and touch things the way that you did before, you could be in a position where you can be hurt in business. That was my takeaway. This guy had it all, he lost it. He was trying to rebuild it, but he didn’t have the same fortitude.

What I can tell you at that point in my career, I’ve mostly only been promoted at Outback. I’ve been promoted once at NVR. What it did to me was always make me realize that I needed to talk to people that did the job that I had already done. It crystallized for me to keep talking to the new person out of college who was going to be a project manager, the project manager who just gotten promoted, someone who is into the realm of estimating.

Be mindful. If you’re not in that job anymore and they are, they’re feeling it, they’re seeing it. If you want to still be relevant, you need to be able to relate yourself back to them and not just use your memories. The worst manager I ever saw, Ian, would always say, “Can I tell you this story about when I was in sales?” You haven’t been in sales twenty years, nobody cares. Get somebody who’s in it to talk about it.

In Michael Clayton, the scene is Michael Clayton feels like, “I don’t know where I am. Am I in a good spot in my career or a bad spot in my career? I’m not sure.” That’s how we usually feel as people because you don’t know. The conversations he’s having with somebody else is, “You found a spot. You found the niche for yourself.” He goes, “If you want to say, ‘Hey,’ let me go back and be a DA like I used to be back from Queens. You should have seen me.”

He goes, “Let me give you some advice. Leave it there.” Meaning, don’t revisit it. You were great ones in that role. You might not be great there again. An easy example is Michael Jordan, the Wizard average twenty points a game, but Michael Jordan, the Wizard at his best nights was never Michael Jordan, the Bull. You can’t do that. You can’t put lightning back in a bottle and that’s what this means.

I also love, Michael Clayton, where he finishes off by saying, “God forbid, you’re not as good as you remember because I’ve seen that happen.” It could have been windated when he was a good DA back in Queens. That could have been just the market luck, got a few cases that went his way, you maybe aren’t as good as you remember yourself.

In 2000, my brother got married and we went to New Orleans. We spent the entire trip in this one bar. In 2010, our buddy Lee got married. We were at all these other places. We can afford different things, and we have gotten older. We ended up back in this bar. The floors were sticky, the drinks sucked and everything was in a plastic cup. We weren’t happy there. We were there for 30 minutes. We all looked up and we’re like, “A decade ago, we lived here. We were different people then. That bar was perfect for us then. We could embrace it, it was us. A decade later, it wasn’t.” If you want to put yourself back in this position, you’re not the same person. You don’t have the same edge. You don’t connect to people the same way. You’re not going to be able to do that same thing again, almost certainly.

Dr. Peter makes up names for different people. We’ll go through a few of them. He calls this person that Percussive Sublimation, which is a hopelessly incompetent person, a bottleneck that management kicks upstairs to get them out of the way and let other people do their job. Frank and I started going through NVR and listing names. It was hilarious. When you have eight layers from the frontline to the CEO, that’s probably an average Fortune 500 company, 8 to 12 layers between a frontliner and the CEO.

The farther away you get from the frontline, the less important it is at those underneath the CEO roles. They’re normally senior executives. They’re presidents. They’re executive chairs. In fact, in a lot of companies, an incompetent president will hurt your company less than an incompetent division line manager. We start talking about people that towards the end of their career weren’t adding much value as presidents. If you’d have taken them at that point of their career and put them back in front as a frontline profit center manager, they would have completely blown it up.

They were hiding in the president role because we had a powerful and strong CEO who was doing a good job. Incompetency didn’t hurt the company stock, it kept going up. You can hide them. It goes to show even more that the less they did, the better off everyone else did towards the frontline. The less managing they did, the less meddling they did, the less getting involved. By them checking out and hanging out in their office all day, everyone else got more productive down the line.

Because those people stepped up because they knew they needed to. They were worried about their jobs so they pushed. The other thing you notice in this, in a lot of instances is, these roles that amount to nothing, VPs who report to nobody or have nobody reporting to them, all those jobs are dreamed up in bull markets. “It’s a strong economy. We can afford it. We can do it. We want to keep them around. They’re no longer tied to the balance sheet. They’d be a great mentor. They could take people to lunch.” These are the idiotic things that come out of people’s mouths and they’re justifying creating these positions. This goes back to Jordan or with the Trump conversation and what Ian asked about the black belt.

For me, whenever I saw an opportunity to pursue a career down one of these paths, I was always afraid to take it because I thought I would lose my relevance and I could lose my competency and what I was good at. My wife is a professor. I won’t say anything too crazy. The person who is the provost is in his mid-50s but he comes from a family with a lot of money, and he never was grounded. He’s always doing these crazy things. He ends up in the newspaper around here because of it. He was part of the whole thing we’re talking about with Percussive Sublimation.

A lot of times with that is someone screwing up on a line manager job but they’ve been with a company a long time. They got personal relationships. They’re a good person, but they’re incompetent, so by moving them up off of the line manager, making them a regional or market manager, their manager will skip past them and go right to the frontline manager to get him out of the way. It’s a way of not having to fire someone that would be uncomfortable. You promote them, and then you just blow past them all the time and skip level right to the frontline.

His next one is the Lateral Arabesque. We had to look up Arabesque because Frank and I are not terribly smart. It’s a fancy way of decorating a little bit. What he’s talking about here is an incompetent person who’s given a new impressive longer title, is moved to an office in a remote part of the building. Jeff Bezos, we talked about this, did that with many of the initial founders that were with him, his initial employees that were important in the beginning.

As they grew to a big company, they couldn’t handle their jobs, so he would give them these fancy titles with no direct reports and no direct responsibility for anything. They ended up becoming shells of who they used to be. Most of them ended up leaving because they knew. Jeff didn’t want to fire them, he didn’t have the heart. There were only 5 or 6 people. He gave them different titles and pretty much banished them to some remote outposts in Alaska kind of thing.

He sent them off on ice floats, which is the term of, “I don’t have the heart to fire you, but you don’t fit anymore, either.”

In this one, we talked about how do you know if this has happened to you? Sometimes you feel like, “I got a new title. This is exciting.” If you’ve been given a “promotion” and you’ve gone from having direct reports, people that report to you, direct responsibility for sales operations, profit and now you find yourself with no direct reports, you are just an influencer. Maybe you’re told that you have dotted line influence.

Whenever you’re told that this position will have dotted line influence, it’s a bullshit position. That’s a position that is going to go away in a recession. In a recession, no one can afford dotted line influencers. Titles for jobs that I’ve seen that go away fast in a recession, Vertical Sales Leader, Regional VP of Sales and Marketing, Training Manager, Market Manager, Business Analyst, Six Sigma Black Belt, Brand Manager and Social Media Manager. These are the first jobs that get cut when a recession happens. They’re luxury positions.

None of the positions I mentioned would ever be found in a startup with a founder. These things happen after years and years of great success where you’re trying to move people around a little bit. Those positions, normally, their influence in the organization is that they talk to the real boss more than most people. People are a little afraid of them because they know that they have influence over a real person who makes decisions. People feel like they have to listen to them, but they’re not real positions. They get exposed as soon as the recession happens. All of those positions were real positions in GE and NVR until we have recessions and they all got wiped out.

You become a weak link by holding so much power because others can’t build off of you. Click To Tweet

One of two things happened, either the people were let go or if the people were talented enough, they were pushed into a different role, mostly a demotion. In many instances, they didn’t cut the pay, but they would demote you into a different role because what you did before, this bullshit position, was worthless.

The sad part too, Frankie, is most of them were offered a demotion. They didn’t take it because of ego or they tried it and they failed. A part of that is they lost their edge. They lost their skillset. You talked about the fear of losing your fastball because once you lose your fastball, it’s hard to get it back. It’s hard to lock yourself back in five years later and be the person you were when you were promoted into that garbage role in the first place. In the next one, he talks about Hierarchical Exfoliation.

This is something Ian and I talk about in these terms while we’re alone. Does it come with a loofa?

Yes. This is the case of the brilliant, productive worker who not only doesn’t win promotion but is dismissed from his post in general. Dr. Peter’s theory and there’s some truth to this is super competence is more objectionable than incompetence. The reason being is if his thesis that most mid-level to high-level management positions are filled by people who have reached their level of incompetence, then those people would feel threatened by a high achiever, a top performer. Someone who maybe reminds them of themselves at one point in their career because their whole job, based on this thesis, is to keep the status quo. To keep their position even though they know their position is not adding value.

An elite performer will threaten them that they might lose their job. That person might get promoted into their job or what they also know is that person has zero need for them in that management job. If you’re that incompetent as a manager, I’ve had incompetent managers when I was a frontline worker, and I didn’t need them. I didn’t need to ever talk to them. That might have threatened some of them that they didn’t feel needed by me or necessary, even though I was getting them results.

You and I didn’t talk about this before, but I thought of it. There are famous examples. We’re going to get into some of those, people that if you follow business, you’ve heard of. I remember feeling this way as a younger person. I remember being a young project manager and feeling like my production manager was threatened by me. I remember a costing manager who is threatened by me. I remember a sales manager who’s threatened by me and they all tried to block me. I had a great boss and my boss saw that. The head of the department saw it.

We built a relationship where I was allowed to come to him smartly and ask questions because he knew he would help me develop my career, where these other people were blocking me because of threats. Ultimately, I got further up the chain than every single one of them and I think that’s real. Some people realize, “This person is talented.” There are one of two types of managers, one manager is, “I’m going to champion this person because I’m good enough to get more out of him.” The other one is, “I’m going to be scared of this person.”

It’s funny, at GE, when I got promoted into my last role, the two mentors that were above me, when they were pushed out, never treated me like a threat. Thinking through you talking, I was. I made about a third of the money they made. They both got dismissed and I was promoted. I was the guy in the movie where they said, “No, you promote him.” I wasn’t paid shit. They gave me the senior executive role and that was a huge increase for me but it was still less than what those two were making. They were my mentors, but ultimately, I replaced them.

When I was brought into NVR, I was hired by the CEO, not the president. The president felt threatened by me because he didn’t hire me. Even though I didn’t have anywhere near his experience, I was a threat because he didn’t know why I was hired, what I was there to do and I was talented. I was doing a good job. The better I did, the more threatened he felt that maybe his role might be a risk.

I had a division manager who I reported to and the circumstances don’t matter for the point of the story, but I got a huge raise. My base salary was $5,000 more than his. He made way more bonuses and he had EBIT. I didn’t have that. He had stocks, and I didn’t have that much of it at that point, but he was threatened by that to a point where he’s like, “Your base salary is higher than mine.” It became a big thing.

He, ultimately, was pushed out because you’re focused on the wrong stuff. If you embrace those moments, if you’ve got the goods, things like someone like Ian or me getting opportunity makes you feel empowered to do more. If you don’t have the goods, what you focus on is the young person who might be stealing my job or who’s going to steal my cheese, and ultimately, you’re not focused on the right thing and you get passed.

I know our readers don’t need more examples than your two heroes, Ian Mathews and Frank Cava, but there are some other people that had some relative success that read through this. Oprah Winfrey was highly successful like the two of us. She’s done okay. She was fired from Baltimore’s WJZ-TV because she was, “Unfit for television news.”

The question that I asked you, dear reader, is think of the career of the executive that fired her? “My crowning achievement is I didn’t promote Oprah.”

“I fired Oprah.” Lee Iacocca was fired by Henry Ford II and he wrote in his memoir. Lee Iacocca went on to turn around Chrysler. He became one of the most famous CEOs right after that. He took them out of bankruptcy. He put them into the first slot. His quote in his memoir was, “Henry Ford II didn’t want strong guys around him. They made him feel uncomfortable because he was the heir to the throne. He never earned his CEO position.” Here was a guy like Iacocca that took it, came out there with talent and sheer will and was talented.

J.K. Rowling was fired as a secretary for daydreaming too much. Daydreaming made her a lot of money. Walt Disney was fired from the Kansas City Star for his, “Lack of creativity.” Far from just sharing examples from Ian and Frank’s lives, we did some in-depth, half-assed internet research for all of you to show that it is beyond us.

The Peter Principle: The methodology of this is in order to not get eaten by the shark, you don’t have to be the fastest swimmer. You just have to be faster than the slowest swimmer.

 

Categorically listed as half-assed internet research.

Yes, 100%. Number eight is the Paternal Instep. This is where the owner of a family business brings in his son or daughter at a high level with the idea that in time, without rising through the ranks and earning it, he should take over the supreme command. Nepotism for the most part. There’s a whole chapter on nepotism in The Peter Principle. Frank, where did the term nepotism come from speaking of your half-assed internet research?

This came from old-school popes many years ago. Popes would pick their nephews and give them roles as Cardinals. They didn’t earn it. They didn’t raise up through the ranks. They didn’t start building a congregation or a flock. They just so happened to be downline of one of the popes and the Pope appointed them.

How did that work out for the Catholic Church? Are things going pretty well for them?

It’s a pretty good run.

A lot of little boys would disagree with that.

The one that I liked the best. Ian and I are both self-made guys. We have school teachers for moms. We have hard-working blue-collar dads. Our kids are growing up in a way that we’re not growing up. I didn’t grow up that way. I live in a way nicer house now than I grew up in. My kids are growing up in a different environment. I think about this and I worry about it, but one of the things that you hear a lot is shirtsleeves to shirtsleeves in three generations.

There are different iterations of this. I found a quote that all of them say about the Scottish. “The first person builds it, the second one grows it, and then the third one sells it.” It comes down to a lot of these different things that we talked about. If you want to spend your time in the country club, you can but you don’t have the edge that it takes to grow it. Ian and I were half-joking about country clubs earlier. I haven’t joined one for that reason. I don’t know what it does to my head. Those are the little things that you look at with nepotism. You got to be careful with it.

“Shirtsleeves to shirtsleeves” is a saying in almost every culture that’s pretty similar. In Japan, it’s, “Rice paddies to rice paddies in three generations.” I did not make that up so don’t cancel us. In Scotland, “The father buys, the son builds, the grandchild sells and his son begs.” We talked about Ford. Ford’s a good example. The Ford family has always been involved in that company and they’ve had their problems from when Henry Ford started it all. Even the Fords who now own the Lions. The Detroit Lions won the NFL Championship in 1952, 1953 and 1957. Since 1957, they have only won one playoff game. They’re the worst football team in all of the NFL since 1957. It just so happens that in 1963, that’s the year the Ford family bought the Lions. Nepotism has run the Lions right into the ground.

Sticking in Detroit, Stroh’s. Stroh’s was the number one beer in the ‘70s and ‘80s. If you grew up in the ‘70s and ‘80s and you remember the ads with Alex from Stroh’s. Stroh’s Beer was the beer. There’s an awesome book that’s called Beer Money. They went shirtsleeves to shirtsleeves, they went bankrupt because the family destroyed the business. They let Budweiser and Miller blew right past them.

Another one is Gucci. Guccio Gucci founded that company. He blew it up, made it big, made a worldwide, gave it to the kids and grandkids, and they squandered it. Now, there’s no one left in the Gucci family that owns Gucci. It’s just a brand. That all ended with Mauricio getting blasted by a hitman because he took his ex-wife out of the inheritance. It’s all over. You see nepotism moving back and through. You see it as much in small businesses as you see in big corporates.

A couple of things that come to mind in thinking about this in real life and Hollywood. In real life, the same exact thing that happened to Gucci happened with Adidas. Adidas and Puma were two brothers. Adidas was incredible. They had all these innovations. They could never get their shit together on how to run it. Now, they’re a brand but they’ve had been resurrected several different times.

I love the show Billions. I’ve gone back and rewatched some of those episodes during COVID. In the 4th or 5th episode of the whole entire show, the protagonist acts going after a family who treated him poorly and everybody was broke because they didn’t grow the family money. Ian loves Succession, which I haven’t gotten into, but the entire show is around the Paternal Instep or nepotism and how do you handle it.

Outside of nepotism, Dr. Peter talks about the concept of push versus pull. He believes that pull is the easier way to rise up the ranks. Push is when an employee works hard and delivers to achieve a promotion. That person is often blocked by incompetent people above them. More frequently, people get promoted by pull, which is when you have a mentor or a patron who pulls strings to move you up faster.

Frank and I were talking about this. We like to believe that we got results, we did. You could go objectively look at where we are ranked in anything we were doing. There were also always people that were performing at near or a few above us in any role. I wasn’t number one at everything I ever did, but I always had an influential sponsor. That was by design. I always paid attention to who makes decisions in this company and I made sure they knew what I was up to. I made sure they knew what I was doing, how I was doing. I made sure to have a personal relationship with them because I knew that’s who was going to ultimately make the decision.

In life, there’s either, or and and. What I see with push/pull is and. If you’re pushing and you also make the right relationships or you do the right things career-wise, where others will pull for you, you’re going to put yourself in the best possible position. The reason that I had people pulling for me is because I was trustworthy. I was reliable. If a moment came to be called on, I would step up and I would do what I was asked, and I would go above and beyond what I was maybe required to do. That builds the pull. I wasn’t born with pull. I earned the pull by all the push. If you put those two things together, you can make some magic.

His concept of Final Placement. This is the main point of his thesis is that people find that level where their competence is truly showing where they just can’t go any farther. That’s the highest rung. This is the concept that everybody has a ceiling. He believes that everyone has a ceiling, you might just not have hit it in your small little company, but you’ve got a ceiling somewhere. I believe that. There are some things I could not do, but I’m cool with it. I’ve come to grips.

As a younger person, I thought there was nothing I couldn’t accomplish. Now, most things I couldn’t accomplish, I just have to pick things I am good at. That’s a concept of there’s a final rung that is based on your skills and you’re always one rung too high. He talks about some of the psychological manifestations of Final Placement. There’s self-pity where people start saying, “Nobody appreciates me.”

If you've been in the same job for three or four years and you still have the discomfort, you're in the wrong spot. Click To Tweet

There’s the auld lang syne where he talks about there’s a tendency to reminisce about the good old days. One thing I’ve definitely seen if someone who has final placement, especially in management, is this stubborn insistence on routing every piece of business and decision through a strict hierarchy, through every line of the organization chart. Some of that is they want to make sure that everyone knows that their position was needed so everyone has to go through the hierarchy. Whereas in someone who’s not hit the final rung, they don’t care who made the decision, they just want results. They’re still climbing.

I want to dive into this one a little bit. Instead of Rigor Cartis, which is the strict rungs, what I noticed with people who are recently promoted, in some instances, is they want to control things through a spreadsheet, an org chart or through control. They want to control the narrative. What they want to do is they want to share less and stop information flow.

What you realize if you become a senior-level manager and you get a business owner like I am, you see people doing that and it’s instinctive. What you’re doing if you decide to be a trapper and no longer be a cog, you become a weak link by holding so much power because others can’t build off of you. What you want to get to is the point where you become a conduit. You share those things, it doesn’t make you weak, it makes you stronger. It makes you more powerful.

It makes you harder to replace because so many things can flow through you and others can build off of it. That’s what happens in a lot of these roles. People reach their Peter Principle because they don’t adapt to the new role. They use the old things so they have these psychological rigors that keep them from allowing them to continue to be a conduit. You get too big for your own press clippings and it stops what made you special.

He talks about the teeter-totter syndrome, which is a complete inability to make decisions appropriate to your rank. He talks about when you get to that position, when you don’t have the confidence or you’re not competent enough, you won’t make decisions. Part of that is if you never make a decision, you can never get blamed. You can never get fired. There’s a fear that creeps in to, “I’m not good enough to be in this job. I’m going to just stay under the radar. I’m going to not put myself out there, I’m going to just agree with everything.”

He says, “They either push everything down. Everything’s put back down to some of beneath them. If something goes wrong, I can always blame someone who reports to me and replace them if it doesn’t work,” or he passes it up. He examines it until he finds some reason why he can’t make the decision, and then he pushes it up the chain. Where that gets frustrating as an employee, that’s somewhere you bring good ideas to your boss, and he always says, “That got shut down by corporate, by my boss, or by the by the CEO.”

Because he doesn’t have the guts to make a decision, he puts it all on his or her boss or he just kicks it out and never makes a decision. He creates committees. I’ve worked for a boss like that. We just had meetings to talk about meetings and never made a decision. He would need to get fifteen people to sign off before he would make any decision. It was so frustrating. He was scared of being questioned about what kind of decisions he would make. I have definitely seen at high levels, people that won’t make decisions and it’s because they don’t want anything ever coming back on them that could be considered heat.

Decision-making is one of the most critical aspects of business success. There are two elements that go into. It’s tactical knowledge and an ability to make decisions there, but it’s also emotional intelligence that goes into it. If you have gotten to a point by being a bad or lucky decision-maker, rising up through the ranks is going to expose that. Where if you are a great decision-maker, you’re going to probably elevate incredibly high because that’s what CEOs do. CEOs synthesize information and they decision make. They aren’t procrastinators. They’re not bad at that. That’s why they go as high as they do because of being able to synthesize

The Peter Principle: You don’t want to fall into the trap of being so bloated as a business that you have tons of these people on staff, because that’s unhealthy.

 

All of these behaviors are why companies don’t act on these managers or executives that have reached their level of incompetency. They become good at hiding in plain sight. They’re good at turning invisible like cockroaches that are great at finding the dark when the light comes on. There are people like this all over the organization that are just survivors. Everyone knows they suck but they always survive that last layoff. They survive getting fired. There’s always one fire burning hotter than theirs. It’s like that guy that said, “You kept me until the end, friend.”

I just thought of that.

They always make sure that there’s someone who’s in more trouble than they are. They stay out of that. I know an executive in a company that is always 5th or 6th out of six regions and I found out he got promoted to some special projects. It’s hilarious. He was about to get fired when I left years ago. He’s still not been fired. He’s still performing lousy and they just gave him a special project because no one wants to deal with it.

It’s the methodology of this. In order to not get eaten by the shark, you don’t have to be the fastest swimmer, you got to be faster than the slowest swimmer.

That’s it. They’re awful to work for. They won’t take a risk. They won’t make a decision. They let others blow up, including their own people first. They’ll eat their own young to stay in this job that they know that they’re not qualified for.

It’s selfish.

They also know in their head, “I couldn’t leave here and get the same job somewhere else. I got it because I knew a bunch of people that pulled strings, but with my qualifications, I could not get this job. If I did get it, I wouldn’t perform well.” They get good at never going against the grain. You hear them saying, “We need to all get on board with this decision by corporate. I hear you but we’re not going to change anything.” They’re miserable to work for because they don’t help the people they work for.

All they’re trying to do is stay alive and survive in the company. The fact is they do for years. There are so many of these shitty senior executives. They stick out more because more people know about them but the truth is, there are lots of shitty employees all over companies. Most managers are not good at firing people. It’s uncomfortable. It’s awkward. That goes for CEOs. I know a lot of C-level people that are not good at firing people.

The way they fire them is they make them feel uncomfortable or they don’t give them stock options when everyone else got them. That’s the way they send a message or they have someone in HR go do the firing for them or push them out. Sometimes it’s ego. Someone in a C-level position doesn’t want to admit they made a terrible decision because their whole brand is built on being a good decision-maker.

Making a bad promotion is admitting that you are not a good decision-maker. The guy I talked about, that’s 100% the reason why he survived for 3 or 4 years because the president promoted from outside the company. It was a bad hire and he didn’t want to admit it, even though the whole company could see it. Sometimes that manager might be too close to them personally to do anything about it.

How does a company fight this principle if this is prevalent everywhere? I’ve talked often about it. Jack Welch saw this all over the place in GE. He made it clear-cut and dry. Every single manager had to fire 10% of their team every single year. That seems Draconian, but I’ve talked about this before. Every year, I had 10% and it wasn’t that hard. There was always 10% on my team that I knew aren’t going to make it. It wasn’t that hard for me to find them every year.

Netflix does the annual keeper test. They put every manager through this where their manager has to pitch to the CEO that if that person gave their resignation, would they fight to keep them. A lot of the reason why Netflix executives lose their job is because they become irrelevant. The market changes. The guy that was good at peddling DVDs for Netflix might not have been the guy to take them into the digital revolution. Sometimes you haven’t stayed relevant enough of where the markets going.

The last one is the Cravath System. Paul Cravath was an attorney. He ran one of the largest and most successful law firms in the country. He came up with the upper out philosophy, which is every year they would look to see all of their employees and if you haven’t advanced periodically, they would move you out or reassign you somewhere else into the hierarchy.

If you're going to continue to just be in that spot, the tides are going to affect you. You're not going to affect the tide. Click To Tweet

I’ve never experienced this the way that you did. I don’t think NVR was revolutionary with this process. I can tell you, there’s a different theory in my business. Every penny that’s spent is mine. When it’s your money that’s at risk, you quickly realize, “Do I want this person on staff or not?” That’s part of it, but as we grow, what we have to be mindful of is not lowering the bar and taking and hiring for need.

You hire someone for convenience because you have a need. You have to still be true to your disciplines. These are growing pains that you start to feel with companies. We’re rounding the corner on 50 employees now and it’s different than it was when we had ten. There needs to be a process. People need to be evaluated. You need to make sure people are continuing to add value.

The Peter Principle is much more prevalent in big companies than startups. I’m wearing my Keep shirt. It’s a tech startup. We took $4 million from friends, family and private capital. We took money from Frank Cava. We have eight engineers. Frank, we’ve had eight engineers for a few months, but we’ve had engineers for years. We started with 2 or 3 of them. We’ve already had to say goodbye to 4 or 5 of them and the reason is the skills that they helped us with early when we were hiring, they helped us get to a certain level and they no longer can help us the same way.

When you look at cash burn every month, when you take $4 million from friends and family, we are looking at that cash burning every month. David, our CEO, has to be honest, “Am I spending other people’s money wisely?” In a big company, money just sloshes around. There’s lots of cash. You don’t think of it that intensely but every other month, we’re thinking of our team and do we have the right team? Are we spending money smartly? If the answer is no, you make changes.

You’re never perfect in these things. Even when Jack Welch would fire the bottom 10%, he was so good at always getting rid of the wrong people, you wouldn’t have to do this every single year. This is a constant process. People either are getting better, staying the same or getting worse. They can change minute over a minute, day over day and you have to be mindful of it. You don’t want to fall into the trap of being so bloated as a business that you have tons of these people on staff because that’s unhealthy. You, as an employee to me, I don’t want to be one of these ones who’s looked at as that’s a luxury hire, potentially 6 out of 6. That’s never been my goal, but if it is, you have to pick your spots.

Let’s finish with two questions, Frank, and try to answer them to see if someone thinks about it. If you’re reading this and you’re not sure if you’ve Petered out, you’re not sure if you’ve hit your level of incompetence, these are some signs that might be. If you’re too afraid to push back on your manager, to disagree with your manager in a meeting, to take a good idea from your people to your manager because it might not work or you might be questioned, there’s a good chance that you’ve reached your level of incompetence.

If you push agendas that you don’t believe in, if your manager tells you, “Go roll this out,” and you don’t believe in it at all and blindly without arguing or without pushing back you roll it out and say, “Because that’s what we’re being told.” “Let’s wait this out and see how it goes.” You’ve probably Petered out because you’ve lost your will to fight. You’re in survival mode, not drive mode. You’re not trying to grow anymore. You’re just trying to keep what you have.

If you’re working for nothing more than your next bonus, if you’re hanging around to get check after check, if you’re working for money and that’s it and you can be honest with that, you’ve probably Petered out. I don’t know if you could think of any others, but those would be signs to me that if you’re being honest with yourself, you’ve probably reached your Peter Principle level.

When you get promoted into something, there’s always discomfort in that role. Even though you’re great at something else and you move into a new role, there’s discomfort in that new role because it’s a new role, but that usually goes away after weeks to months. If you’ve been in the same job for 3 or 4 years and you still have the discomfort, you’re in the wrong spot.

If you’re still surprised by the role that you’re in and you’ve been there for a while, that’s another indication that this job is too big for you. In sports, they always talk about when you change from high school to college or college to pros, how the game gets faster. We used baseball, if you go back to when Barry Bonds was the best baseball player on the planet, what he talked about was, “The game got slower for me.” He may have used a crapload of steroids to get slower, but he could see things and he can anticipate it. He was in his 30s when the game was great for him because of his experience. If you’re one of these managers that have been in the role for a while and you still can’t keep up, that’s a telltale sign to me that you’ve reached Peter Principle.

If you’re reading this and you’re like, “That’s me.” What can you do about it?

There are a couple of things you can do. I’ll let you go through the stuff we have scripted and I’ll go off-script. You need to be honest. Do you want to roll up your sleeves and get to know it? Do you want to be 6 out of 6 but be charming enough where they don’t let go of you? You need to know where you’re at. You need to be honest and proactive with it. If you found a niche and you can continue to ride it, then do so, but what I see is this is the push versus the pull. If you’re going to continue to be in that spot, the tides are going to affect you, you’re not going to affect the tides.

I don’t know many people that are in these spots that are incredibly proud of coming to work. It’s a bad place to be because you feel like you’re always the wind turning away from losing your job. You can’t be proud. You’re not thriving anymore. Holding on is miserable. I can’t imagine a lot of people that are here that are happy with themselves or proud of who they’ve become because you feel like you’ve lost all of that hope, drive and heart that you had early in your career so you can embrace it.

You say, “Okay, I’m at my level of incompetence. I’m pretty lucky to even be in this job and they’re paying me a shitload of money so I’m going to sell out as long as I can and put it in the bank.” That’s miserable. Knowing that is miserable and having to show up for it. I don’t know a lot of people that would know that would want to do that. You could start with something small. You can advocate for a big change.

You can go to your team and say, “If you could change anything this company, what would it be?” Make a list of 30 things and think, “I’m going to take five of these to my boss. I’m going to go advocate for some change and see if that doesn’t re-energize me and re-energize my team. I’m going to go show that I have some stones. I’m going to go show some inner fortitude and go advocate in this company and quit trying to placate my manager all the time.”

Something else that came to mind for me too. Let’s say you don’t want to do something radical. You don’t want to change careers. You don’t want to go to a different company, but you’re like, “If I’m being truthful and honest,” and all this starts with honesty. “I don’t want to be a stooge anymore. I don’t want to be in this spot.” Enrich yourself, invest in books, coaching and classes. Do something.

Find a business coach that can help you. Spend some time, research, and energy into getting what it is that you don’t feel like you have to be a success in that role. This is my experience. This isn’t something we talked about, but I’m curious what you think. What I can tell you is most people who make it to a managerial role or who are in a position of reaching their Peter Principle had value at some point.

Maybe they weren’t the best, but they certainly weren’t the worst. As a field person or an entry-level person, they showed some competency. It may have been a while, it may have been a couple of decades, but there’s something there. If you push yourself and you ask yourself to produce a little bit more and you hold yourself to that level of accountability, the beautiful thing about big companies is they’re big companies. Things can fly through the cracks. You can be one of those few people who resurrect. They’re like, “Did you see the turnaround in so and so?” All it takes is just a little bit of initiative on your part and you probably have enough insight into the job to make a couple of screw turns and it makes a big difference.

Whatever fear you have, you’ll find that it’s irrational. The worst-case scenario is nowhere near what you think it is. Even being asked to be reassigned into a different division, something that will re-energize you. You don’t have to do something as drastic as moving to a new city but that definitely will re-energize you if you move to a different part of the company, a different role. If your company is something you can’t be, you can change industries. You can move from a big company to a small company or move from a small company to a big company. Something that feels different.

It’s miserable trying to hang out for many years until you get to retirement. You can start a side gig so you keep your job that you’re not energized about but start something small at night and see if you can build something. We have a couple of people, Frank, that are senior executives that are bored at their jobs that have invested with us in a number of our real estate deals. They’re doing that to learn.

The Peter Principle: If you’re one of these managers that have been in the role for a while, and you still can’t keep up, that’s a telltale sign that you’ve reached your Peter Principle.

 

We’re going out with one of them. He’s already come around, looked at different properties. He wants to learn about different things that are out there. He’s investing his own capital alongside us, but also asking us, “Can you take me along? Can you show us some of that?” It’s a way to get re-energized and to learn. Maybe this is something I could do after the fact or alongside it. I did that personally, when I was at NVR, I invested in CodeGuard. Part of it was to feel something different that I was feeling every day doing my corporate executive job. It could be that you invest in something alongside someone that teaches you a new industry.

There’s empowerment in opening a book, in enlightening yourself in some way, in doing little things. The worst-case scenario is the world spins right off its axis. It’s unlikely. Your world spinning off its axis could be you losing your job and you can never find another job again, but that’s insanely unlikely. If this can light a little bit of a fire under your ass, you’re probably going to reinvigorate but you could do it in ways where you don’t have to lose that job by simply embracing a little bit of new energy into your routine or what you’re doing.

Frankie, we still have it. We kept all of our skills. We stayed sharp. Two and a half weeks of eating feta cheese and tomatoes in the Greek islands did not ruin my ability to keep you in check for an entire episode.

It’s true. I’m going to do something and infuse my day by hanging up on you.

That would be fantastic. For our loyal readers, if you feel like we have not reached our level of incompetence, please give us a five-star review on Apple reviews. Hit subscribe if you’re new to this. We would appreciate it for sure.

Ian, good seeing you, buddy.

It’s good to see you, you son of a bitch. Take care.

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