The accumulation of an executives successfulness with KPI measures is not an indicator of future director performance
We are revisiting the Peter Principle, again.
I am assuming that, in terms of performance within an organisation, KPI’s form the baseline for all measurement. The principal is that the additional complexity in the next role is a step too far for the person, who is promoted again, rather than dealing with the underlying causes which are never the individuals but the process in an organisation. We promote based on KPI measured performance until it is too late, not considering enough the skills, capabilities and requirements of the next role. Many books are published on this topic.
More complex is why high performing leadership or a senior management/ executive can perform well until they become a Director and take a board seat.
We know that directors duties focus on governance and oversight, which is not the skill set developed/ tested by KPI’s and measurement. But how can we determine a persons ability to deal with volatile, uncertain and ambiguous situations that require complex judgment? What do complex judgment skills look like?
Before the skills needed, there is a need to state the there is also a change in focus and requirements between a senior team member and a director.
The majority of the behaviour from senior management is described by the blue diamond. The is a task to be completed, and there is an incentive to complete it. The motivation is a reward ( money, profile), and we have a look of a driven professional who delivers the KPI’s. In this blue cycle, the outcome is achieved by the people backed by the process.
The green diamond represents a system where everything is connected, each creating a dynamic dependency on everything. The blue diamond orients towards employees and the green towards directors. The point is that the blue diamond operating system does not train or develop skills for operating in the green diamond environment.
Back to skills needed for directors
The chart below shows how skills should be formed over a period to create individuals who can work together with other professionals who can deal with highly complex decision making (judgment). The grey areas are where the Peters Principle can be seen in practice; individuals act outside of their capacity and/or are not given sufficient responsibility and become disruptive.
The yellow/ mustard zone is where many senior executives get trapped as they are unable to adapt from acting in their own interests (blue diamond) to acting in the best interests of the organisation and eco-system (green diamond) as all their training is how to preform better in the blue.