The Peter Principle for Business


These days brands are often far more flexible than the companies behind them and that often the inevitable outcome of innovation is to confirm the Peter Principle for business, that every great brand gets stretched to its level of incompetence.

Richard reminds us that the core competence of an organization, its ability to deliver on its promises with operation experience and expertise, matters. In the midst of dwindling perks and less perkiness, there is an important piece of information: People have lost confidence at work.

It's a sentiment related to business decisions and making good on an organization's promises.

Take this recent exchange started with an open letter to BlackBerry bosses by a RIM executive. The telltale sign of what is causing unease:

While I hide it at work, my passion has been sapped. I know I am not alone — the sentiment is widespread and it includes people within your own teams.

[…] unfortunately the culture at RIM does not allow us to speak openly without having to worry about the career-limiting effects.

Structure, culture, and products are all operational aspects that need addressing in an organization, especially when it's in a mature market. The pace of change we're experiencing, aided by technology, increased number of choices, and a system built around the 20th Century model is forcing this conversation to the fore.

Simply, you cannot compete at feature level, not anymore. Summarizing the key points of the letter, here are the suggestions:

  1. make products that people want to use and that work as they're supposed to
  2. hire the right people and remove the obstacles that are in the way of delivering
  3. remember what you're about and have the discipline and courage to stay the course
  4. make great tools and you will partner with great developers
  5. talk about emotional benefit in your marketing, it's about desire, why you do it, not attributes
  6. demand accountability
  7. being humble with a dash of paranoia works
  8. share your business strategy and vision — and ask for support

The last one is such a powerful move for a business, yet it is the downfall of so many mature ones. What does war of movement mean? You:

  • own the movement, a direction
  • reflect flexibility and speed in holding the course
  • bring customers on a journey, a specific path moving forward

The game is about who is going where. Does Apple keep an eye on its competitors? You bet. Do they worry about them? They spend time worrying about keeping their own promises. I have watched video presentations and Q&As with Steve Jobs going back years. He sets the tone, provides direction.

His message has been very consistent: Really good people executing on a clear strategy that revolves around one fundamental concept — make really great products. This is what brings customers on a journey.

What does RIM stand for? Here's the official response to the open letter. It reads like a report card, with lots of good information in it. It doesn't address any of the points raised in the open letter. Does it at least focus on a good or bad promise?

[…] more committed than ever to serving its loyal customers and partners around the world.

What does this mean? I can read the words, of course. What's the direction though? How do I measure it? Can we remove the obstacles that stand in the way of making good on our promises? These are the questions current and former RIM employees are looking to answer.

And they are incredibly important questions. In the video from 1997, Jobs admits that Apple suffered for many years from poor engineering management, people going off in eighteen different directions, doing arguably interesting things in each one, good engineers, lousy managers.

So they had to decide what are the fundamental directions for Apple. Focus is about learning to say no. The result of that focus is going to be some really great products. It was 1997. It's now 2011. Hindsight is 20/20, they say. We do have some great products from Apple. Products people want and buy.

There's a great question to get started in sorting it all out. That question is: Why?


[Thanks to Anna Barcelos for the links to the BlackBerry exchanges]

[image by Alexandre Duret-Lutz]

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