Peter Principle

Most of us working in business for any period of time have heard of the “Peter Principle.” Dr. Laurence J. Peter and Raymond Hull formulated this concept in their 1968 book The Peter Principle, a humorous treatise which also introduced the “salutary science of Hierarchiology.” [FN1] While the exact quote is slightly different, many interpret this as meaning that people tend to rise to their level of incompetence in organizations built on hierarchies.

As an important caveat before getting into this topic, I have known many hard-working people who have risen through the ranks the “old-fashioned” way– through hard work and “paying their dues.”

My Experiences with the Consulting Hierarchy

After over thirty years in IT, and numerous projects, I have seen the Peter Principle again and again. This phenomenon is frustrating, and it is enough to drive away the most competent, diligent, and talented consultants.

The “Peter Principle” happens in the consulting world because organizations who implement SAP demand it of their implementation vendors. Sure, that sounds counterintuitive, but unfortunately it is a sad reality.

While what I claim may not sound accurate, let me assure you that it is. In a moment, you will see exactly how it happens and why.

Enter the Crazy World of Consulting – Why Consulting Incompetence Is Rewarded

Once inexperienced, incompetent, or less-than-optimal consultants get onto your SAP, ERP, or other IT project, you are set up to witness the “Peter Principle” in effect. On your implementation or upgrade project, an inexperienced or incompetent consultant will ultimately make a mess. However, it won't be seen right away. Signs might come up along the way, but only those with deep experience will generally recognize them. The consultants will give some reasonable-sounding explanation, or some gibberish, or some babble that they pronounce with confidence but you don't really understand. Or, they may have become polished and provide entirely rational and reasonable explanations, whether true or not. After all, they are the “experts” you hired, so they must know what they are talking about, right? Nonsense!

First Sign of the SAP Peter Principle

“Blah, blah, blah.” I have no idea what you just said, but I don't want to embarrass myself, so I'm not going to challenge it.

As I have written on many occasions, part of the key skills and experience a good consultant or business analyst must possess is the ability to take the complex and make it simple. Anyone can take something complicated and keep it complicated, or worse still, make it more complicated– or, worst of all, make it a mess. It takes experience and competence to take the complex and simplify it.

However, all that “technical babble” and jargon sounds so convincing and educated. However, this jargon is a foreign language that you don't completely understand– and these underqualified consultants know it. Unscrupulous consultants know if they can make something up and sound as though they know what they are talking about, you will believe them. After all, you hired them for their expertise. They can game you to increase scope, or extend project timelines, or bust your budget. They can do this because they are personable and manipulative.

How Can You Identify the SAP Con Artists?

Accountability, Responsibility, and Quality. The cons avoid accountability or direct responsibility. On a project where they are discovered, they must be nearly forced to have clear accountability for delivery. They must be pressed into doing due diligence around a solution to make sure it will work correctly.

If you catch it early enough, you can keep them from being rewarded for blowing your budget, causing project delays, and creating even more convoluted processes than you had before you did your .

How Customers Provide Perverse Rewards for Incompetence

The incompetent consultant's area seems to have users who struggle with issues/bugs that need the most fixing and the most attention. At this point, many companies have invested so much time and effort with the incompetent consultant that they don't see any other options but to continue with this fraud. They need the incompetent consultant to support the mess they make for some time after you go live.

One way you can tell you have been manipulated or gamed during the project is by the quality, completeness, and accuracy of the solution the consultant delivers at go-live.

From a consulting firm's perspective, the incompetent consultant puts in extra billable hours, helps them get extensions and budget increases, and needs to have extra consulting support. They are always behind, and no matter how hard “they try,” they always have another excuse for why the problems they cause really aren't their fault. It's always someone else.

These consultants stay on long after go-live to ensure that their questionable solutions are supported by the same person who made the mess to begin with. This is what customers insist on, because by the time go-live happens, they are stuck with the mess and “con”sultant who made the mess.

Incompetent consultants tend to be personable most of the time, and ingratiate themselves with the customer/client. This way, no one questions that they are working so hard, and doing such a great job. It could never be their fault.

How SAP Consulting Vendors Reward and Promote the Peter Principle

For the consulting vendor, billing hours go up, staffing and utilization numbers are high, additional “backfill” support is needed, and more people are staffed. From their metrics and possible compensation incentives, the incompetent consultant is doing a great job! On the other hand, the highly experienced, competent, and diligent consultants work themselves out of a job. The competent consultants generally have fewer go-live support issues, along with more engaged, involved, and knowledgeable users. However, they are not “needed” as you go-live, and you, as the customer, get rid of them to cut the blown budget wherever you can.

In a partner-oriented firm, the incompetent consultant is headed for being a manager, senior manager, managing partner, etc. The incompetent consultant has great utilization, helps to get more staff on projects, and is always busy.

Consulting firms reward and incentivize incompetence. The most competent and diligent consultants are passed over for career enhancement precisely because of their competence– they may finish projects earlier than their incompetent peers and may be “on the bench” more frequently.

The more skilled the incompetent consultant is at being personable and presenting a compelling case for their work, the better positioned they are for higher-level promotions. After all, in consulting firms, senior-level positions are focused on getting billable resources out and billing. The more experienced and capable at this, the better positioned you are for partner or senior management.

Stay tuned for details on how to spot these consultants.