The Peter Principle teaches that in a hierarchy, members are promoted continuously until they reach a position at which they are no longer competent, and there they remain, unable to earn further promotions. Peter’s Corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out his duties” and adds that “work is accomplished by those members who have not yet reached their level of incompetence.”

The Peter Principle was originally developed for dealing with employees and promotions in a corporate setting, but it applies perfectly to the leadership challenges in network marketing. Every system has a state of equilibrium, and one cannot effectively maintain a higher position than one’s current leadership capabilities allow. This is why leadership development is so critical for long-term success in all endeavors.

Plan, Do, Check, Adjust

Network marketing professionals at all levels are constantly bumping up against their leadership lids. Unless leaders can expand their leadership capacities, they cannot move on to higher levels in business or in life.

Imagine leadership capacity as a cup. No matter how much water one pours into the cup, it will hold water only to its capacity. This is why leaders can learn all the theory they want, attending seminar after seminar, but until they confront the issues that have them Peter-Principled, they will not change their leadership capacity and thus will not grow. This is not an issue affecting some leaders, but one affecting all leaders, since all are limited by their current leadership capacity.

I love the saying, “You don’t know what you don’t know, because if you did know, you would have, but since you do not have, you must not really know.” This points to one of the causes for Peter’s Principle: our own levels of self-deception limit us all. The breakthrough begins when we humbly admit that we do not have because we do not know. 

Chris Brady and I teach a four-step process applicable to growth in any area called the PDCA cycle: Plan your work, Do the work, Check your work and Adjust before repeating the process. However, you will not initiate a PDCA cycle until you recognize your leadership gap.

Personally, I know that the biggest factor holding me back on my leadership journey is not the economy, my teammates or my company, but me. I am the limitation in my community’s growth, and only when I confront the limits of my leadership and address them will I grow to the next level.

Do you see yourself as the biggest project in your leadership journey? Remember the old saying, “The speed of the group is the speed of the leader”? What areas of leadership weakness are you ignoring that, if confronted and applied to the PDCA cycle, would revolutionize your business?

Let me give you an example from my own experience. I had (and still have, to some degree) an awful habit of interrupting people before they could finish their thoughts. I did not intend to communicate disrespect, but my mind tends to work quickly, so in attempting to get things done efficiently I was hurting the key relationships in my community. I had heard people say that I wasn’t listening, but I ignored this and defended my need to get things done. When I finally admitted I had a problem and started the PDCA process by asking people to stop me if I interrupted them, my relationships were enhanced greatly.

The Art and Science of Leadership

Confronting and lifting your leadership lid is the best way to communicate to your team that you care enough for them to change. What areas in your leadership can you confront and improve that would make the biggest impact in your community?

There is a law of technology (Amara’s Law) that says, “Everyone overestimates the effects of technology in the short run and underestimates the effects of technology in the long run.” We can apply the same principle to leadership by rewording the law to read:

We tend to overestimate the effects of leadership in the short run and underestimate its effects in the long run.

In Launching a Leadership Revolution, Chris and I discuss the difference between the science and the art of leadership. The science side in network marketing would be the hard skills, such as contacting, showing the plan, and time management. The art side would be the soft skills, for example, dealing with people, finding your purpose, and building culture.

I often hear potential leaders say, “I don’t have time to read; I have people to meet and presentations to make.” Meetings are important, and you won’t have leadership challenges until you have learned to build a community first. But it’s what you learn on the art side, after you have mastered many of the science-side skills, that determines how far you will go in leadership.

Our ability to recognize areas of improvement and apply the PDCA process will determine our long-term leadership results. Initially, improvements in the art side of leadership are hardly noticeable, as compared to the science-side skills. But in the long run, the limits to your growth will have less to do with your leadership science and more to do with your leadership art.

If you are just starting out in network marketing, then learning the science side is essential to producing a community. But don’t wait until you are thirsty to dig your well. The bigger your community grows, the more you will be thankful that you focused on the art along with the science.

Long-term success in network marketing requires confronting the Peter Principle head-on to break through to the next leadership level while inspiring others to do the same by your example.

What are you waiting for? Your leadership destiny is just a few courageous PDCA cycles away.

ORRIN WOODWARD is coauthor of
The New York Times, Business Weekly,
USA Today, and Money best-seller,
Launching a Leadership Revolution.
Together with Chris Brady, he leads a
network marketing organization of several
tens of thousands of people. Their common goal
is to raise the level of professionalism
and leadership in network marketing.