The Dick Principle
by Harold J. Dick, Ph.D.

No. 22 in The Idea Man Series.

In 1969, Laurence Peter set the world of management on its ear by announcing a revelation:

"In a hierarchically structured administration, people tend to be promoted up to their level of incompetence. Thus, every position will eventually be occupied by someone who is not quite capable of doing the job."

The Peter Principle quickly entered the curricula of all with-it MBA programs, but also turned out to have such widespread applicability that it became part of corporate folk knowledge. Everybody immediately grasped the principle because everybody recognized that their own boss was an example of the principle in action.

Careers were made and careers were shattered as people reacted, and overreacted, to Dr. Peter's great insight.

Having acknowledged my debt to the past, I now suggest it is time we update the Peter Principle.

The world that Larry Peter occupied and analyzed so cleverly is one that has come to be labeled the "Old Economy," the world of stable companies creating value the old-fashioned way: they worked for it. Such was the stability in that world that employees could actually expect to spend their careers with one company. It is a world that is still studied as the norm in the degree programs of economics departments and business schools.

That old working world still has applicability, but the time has come to question its pertinence in the brave new world of dot-coms.

For, the Old Economy continues to exist side-by-side with the New Economy, just as various cottage industries hummed along in their quaint medieval ways through much of the 19th century as the Industrial Revolution was rapidly rendering the old ways useless.

Brick-and-mortar we shall not always have with us, but probably for a while yet they will continue, including their legions of careers capped off by the unpleasant reality reflected in the Peter Principle.

The New Economy of the cyberworld requires a new theory of mismanagement, a new statement of the dizzying reality behind the glitzy career life in the dot-coms, the awfulness of careers spent surfing wave after tumultuous wave of IPO's. The New Economy is a world not of slow accretion, of gradual promotions, but of incessant and rapid job-jumping.

I give you, then, the Dick Principle:

In a cyber-economy,
people tend to be RE-hired
at their level of incompetence.

I hasten to explain:

Example No. 1 of the Dick Principle in Action:
Joe makes a software breakthrough at Company A, cashes in as the stock skyrockets. Joe is hot. Company B headhunts and hires Joe to oversee their software development team. Joe is brilliant at writing code but has no talent at nurturing others to write brilliant code. In other words, Joe is a lousy manager. Joe has been hired at the level of his incompetence. Joe has been dicked by the Dick Principle.

Example No. 2 of the Dick Principle in Action:
Jack has a conceptual brainstorm for Company C. The resultant dot-com becomes the overnight darling of NASDAQ. Jack cashes in and is hot. Company D lures Jack to be its CEO. Jack is a solitary, maverick thinker and has no talent at management. Jack has been dicked by the Dick Principle.

Example No. 3 of the Dick Principle in Action:
Mary is a brilliant manager with Company E. She is excellent at nurturing people and rises quickly to V-P for personnel and human resources. Company F makes her a huge offer: Come be our CEO and do for our talented team what you did with Company E. Mary quickly discovers that at Company F she has no time to nurture. The company is under tremendous investor pressure and can think only about what the price of the stock will be five minutes from now. Mary has been dicked by the Dick Principle.

Of course, the difference today is that Joe, Jack, and Mary have no financial worries. By the time they are hired at their level of incompetence, they all come equipped with golden parachutes. Thus, they have no personal need to maintain the pretense of competence in their new jobs any longer than they want to.

They have gained a world of wealth and financial security. All they've lost is meaning in their lives. They're no longer doing what they're good at and what they really enjoy.

The more things change, the more they stay the same. In its effect on people, the New Economy then turns out to be only the Old Economy in dot-com clothing. In moving from the Peter Principle to the Dick Principle, we have exchanged one career dead-end for another, one management foundering in incompetence for another also foundering in incompetence.

On the macro side, the Dick Principle means this: We already know that one price of cyber-technology is instability and rapid change (Moore's Law, etc.). Through the Dick Principle, we can see that the instability and rapid change also include the very people who are supposedly guiding and shaping the brave new world. Structurally, we have traded mid-level, stagnant incompetence for top-level, volatile incompetence.

Steve Jobs, with his successful return to Apple, is the exception that proves the principle. For every Steve Jobs, you have a thousand... Well, I don't want to get into naming names. If you are involved in, employed by, or invested in the cyber-world, you can easily supply your own examples of the Dick Principle at work.

END

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