In my years in sales and general management I’ve observed this phenomenon around the country many times, including right here in Orlando. While it’s not limited to sales management, it seems to be more common in that arena. In fact, it’s so common, there’s actually a name for it: The Peter Principle.

The idea that high-level incompetence is inevitable was formulated in the 1969 best-selling book The Peter Principle: Why things always go wrong. Its authors, psychologist Laurence Peter and playwright Raymond Hull, started from the observation that while jobs generally get more difficult the higher up any ladder you climb, most people only come equipped with a more or less fixed level of talent that corresponds to their intelligence, knowledge and energy. At some point, then, they will be promoted into a job they can’t quite handle. They will, as Peter and Hull put it, “reach the level of their own incompetence”. And there they will stay, fouling up operations until they either retire or some egregiously inept act gets them fired.

The problem is what they get up to in the meantime. They end up distracting us from their crummy work with giant desks. They replace action with incomprehensible acronyms, blame others for failure, and cheat to create the illusion of progress. Meanwhile, the actual work gets done by those who have not yet scaled the summit of their own incompetence. That would be you and me, then.

The employee’s incompetence is not necessarily exposed as a result of the higher-ranking position being more difficult – simply, that job is different from the job in which the employee previously excelled, and thus requires different work skills, which the employee may not possess. For example, a factory worker’s excellence in his job can earn him promotion to manager, at which point the skills that earned him his promotion no longer apply to his job. Or a sales administrator excellent in tracking sales, who gets promoted to a sales management role which requires a lot of people skills that the individual simply does not possess, or worse, does not believe is necessary. Thus, the real work is accomplished by those employees who have not yet reached their level of incompetence.

The “Peter principle” undoubtedly appeals to the cynic in all of us. It is also quite possibly true, if subsequent academic studies are to be believed. The longer a person stays at a particular level in an organization, the more most measures of their performance fall – including subjective evaluations and the frequency and size of pay rises and bonuses. It is a finding entirely consistent with the idea that people eventually become bogged down by their own incompetence.

But what happens if the conventional idea is false and employees’ ability to perform at higher levels has no link to their competence at lower levels? The result is profoundly different, as you might expect. Promoting the best-performing employees merely takes people out of positions where they are doing well and pushes them upwards until they arrive at a position for which they lack the requisite skills. Their promotion history then comes to an end: the Peter principle wins out.

The cure for this problem? We should return to what Dr. Peter wanted: rewarding ordinary competence and being wary of feats that come too easily. Perhaps the late Ray Kroc is the right role model here. One of his first steps in building the McDonald’s empire was to run his own outlet—he cooked, cleaned bathrooms, picked up the trash. The focus on doing ordinary things well was, he believed, key to McDonald’s success. Imagine a V.P. Sales actually making sales, traveling with sales reps, coaching them to success, attending trade shows and meeting with customers. Makes sense to you and me, but not to the self absorbed manager.

Simple competence was central, too, for former U.S. Marine Lieutenant Donovan Campbell, who led a platoon in bloody street battles in Iraq. As Campbell’s account, Joker One, tells us, he earned his men’s respect and protected them through simple acts: training them to get in and out of a Humvee quickly, reminding them to eat, and arguing with superiors when those under his command were unnecessarily put in harm’s way.

Finally, consider how Captain Chesley Sullenberger III explained his astounding emergency landing of US Airways Flight 1549 in New York’s Hudson River last year. “I know I speak for the entire crew when I tell you we were simply doing the jobs we were trained to do,” he said. As Dr. Peter might have observed, there were no pretenders, blowhards, or shared delusions that day, just the deftly coordinated actions of people who had not reached their level of incompetence.

ABC Co. was a growing company. The regional distributorship had seven sales reps, each with his own duties, responsibilities and direction. Management realized it needed to control the sales function to grow responsibly. Sales management became the key. Fortunately, in Joe Williams, company treasurer and sales rep, ABC had the person it needed. Williams admits he was sometimes in the dark about what a sales manager should do, but he is learning. He has found that without a sales manager, salespeople are easily neglected. “I do know you must teach them how to sell their products and services, for example, and make them feel a part of that effort and not left out,” he says. Williams, who has been with ABC for 12 years and stepped into the sales manager position recently, says an important part of his job is to coordinate sales efforts and tie the sales reps’ activities to company goals. He must work with the marketing manager and help implement company policies. Following up on the sales leads he provides the reps is important.

“You shouldn’t say, here is the product, now just go out and sell it, with no follow-up,” he says. A sales manager should help motivate and get the salespeople excited. It is a full-time job.” It may be difficult, says Williams, to be a sales rep and a sales manager and do both jobs well. Both are fulltime responsibilities. As a sales rep, he says, that function often takes over, and he often spends most of the time taking care of customers and neglecting sales management duties.

A sales manager should help motivate and get the salespeople excited.

The decision to hire a sales manager depends on how much control the company wants to keep, If it wants more control, the company first must consider its compensation system. If sales reps are paid commission only, it’s hard to tell them what to do. They are independent contractors, and they have control. They call on whom they want, where they want. Management once thought that by paying commissions, sales reps would beat their brains out working nine days a week, but sales reps do not necessarily work as hard as they might, and managers realized they should provide some motivation and selling guidelines. So they began paying salaries to gain more control. Today many sales reps receive 50-60 percent of their total compensation as salary and the rest as commission. If you want to control the business, you must manage the sales function and work with the sales reps. That’s where sales managers can help. They can do market research and keep an eye on the competition. Things sales reps don’t have time to do. Sales managers may also help reps call on key accounts. Joint sales calls can be tricky if the sales manager and salesperson are not on the same page regarding the sales call.

How big should you be? One owner I know promoted his sales rep to manager when he hired a second rep. “I wanted a sales manager to have responsibility for training the new person, and I wanted the new person to go to him-not to me-for help” said the owner. The promotion also elevated that person’s position in the firm, giving him a feeling of accomplishment and status, said the owner who believes sales managers should come from within the firm. A qualified person should have three years’ experience and a proven track record with the company, he says. He went through a period when it brought in sales managers from outside the company. “That system failed miserably,” says the owner, who believes sales managers should come from within the firm.

Asking the Right Questions When interviewing sales reps for the position of sales manager, ask:

• What changes, if any, would you recommend if you were a sales manager? Someone who really wants the job should be watching it closely enough to have identified some things he or she would want to change. .
• Which do you feel is most important to the success of a sales rep: Lots of sales calls, a good presentation, enthusiasm, technical competence, good records, having a “good” sales territory or hard work? Applicants need not share your philosophy, but they should have a good reason why they think as they do. .
• What is the most important thing our salespeople do? This tells you which direction this person will lead the sales staff. .
• Are we too “easy”? If so, how would you toughen us up? This tells you what type of supervisor this person will make. Watch out for people who would toughen up your operation by taking drastic measures.
• If I said I had a “bad” territory, what would you do? The real question here is how the manager would motivate.

John McMann had four full-time salespeople and several retail store employees selling his products part-time when his company, GHI, hired a sales manager. “Our volume got to a point where I needed a new sales rep,” McMann says, “and when he came on board, he needed some pushing.” McMann promoted another sales rep to sales manager. “Money is a great motivator, but sometimes position is too,” he says. GHI’s new sales manager had been with the company for five years. “He was young, very aggressive, and I was getting old,” he says. “He was committed. I knew he could handle the new products and the new salespeople. Now he is the first person at work in the morning and the last to leave at night.”

It is rare today that a company with 10 sales reps would not have a sales manager. However, a company with six sales reps may need one and a company with 12 may not, depending on how much autonomy sales reps are given. Or, as a business owner told me “You need a sales manager when you feel you can afford one and cannot afford not to have one.”

A sales manager should:

• Be involved in marketing and help tie it to sales planning
• Contribute to pricing decisions and be a link between the finance, marketing, sales and research areas of the company.
• Create and evaluate sales programs, contribute to marketing and suggest ways to capitalize on opportunities.
• Communicate sales policies, procedures, decisions and company goals to the sales force.

An important point to consider:

There is a big difference between what it takes to become a great salesperson and what it takes to become a great sales manager. Don’t assume that someone can transition from sales to sales management with proper management training and a willingness to succeed through the accomplishments of their team’s success. I’d be happy to discuss this with anyone considering change.