Why mediocre people become leaders

Distilling Books - Number 14

Welcome to Mental Garden. The following letter is part of our “Distilling Books” collection, in which we extract the most revealing ideas from literature. For the complete library, click here.

🏷️ Categories: Social relationships, Decision making and biases.

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You’ve lost count of how many times you’ve seen this scene.
You’re in a group, listening to the person leading the team… and you ask yourself:

How did they get here?

You don’t say it out loud because you don’t want to be disrespectful, but the question hangs in the air, unanswered. Today, though, we’re going to answer why this happens, based on two ideas that hold the key.

The Peter Principle and the Law of the Mediocre People.

If you’ve ever been surprised to see someone in a position for which they are clearly unqualified, or if you’ve ever felt that promotions don’t always go to the best person… read this.

You’ll see why it happens, and how we could prevent it in society, in companies, in institutions, and even in how we organize our teams.

Let’s go.

1. The problem of hierarchy

No manager wakes up on a Monday morning thinking: “I’m going to promote mediocre people to create chaos in the organization.”

And yet, it happens.

In any large organization, sooner or later the same absurd phenomena appear, which have already become stereotypes: meaningless internal politics, inexplicable promotions, positions held by people who don’t meet the expected level.

Why?

Because within hierarchy, there are dynamics that generate chaos and lower quality.

2. The Peter Principle: promoted until you can’t anymore

In the late 1960s, Dr. Laurence J. Peter and Raymond Hull published a book that became a management classic: The Peter Principle.

Its thesis is simple:

In a hierarchy, people tend to be promoted based on how well they perform in their current job… until they reach a position for which they are no longer competent.

That point is called their level of incompetence.
And the most ironic part is that, once there, they usually stay there.

We all have an example in mind: that brilliant colleague as an analyst, promoted to team leader… and from then on, none of their decisions seem right. Or that creative, resourceful marketing director who, upon becoming CEO, lost their way and now has their entire team dizzy with indecision and working inefficiently.

There’s a reason this is so common…

You almost never know someone’s ceiling of competence before promoting them.

It’s the consequence of making decisions with incomplete information.

3. The Law of Mediocre People: the minimum as reference

Decades later, Ben Horowitz noticed something equally unsettling:

At any skill level in a large organization, the position and responsibilities at that level will tend to converge toward the most mediocre person with that qualification.

It sounds harsh, but it makes sense.

Imagine the least competent project manager in the company. Of course, all the lower-level technicians see it. They know this person gets the salary and the office, despite being worse than the other managers.

Who do you think the technicians compare themselves to when asking for a promotion?

Exactly: to that person.

The result is a low reference point.

Excellence stops being the goal, and the acceptable minimum becomes the norm when promoting.

4. Why both phenomena happen

These two laws feed each other, which is even worse.

The Peter Principle causes someone to reach their limit of competence and remain in a position they can’t handle. Then, the Law of Mediocre People explains how that limit becomes the standard for others who come later.

And two more difficulties make things worse:

• Not enough time: Many teams dedicate little energy to the promotion process, opening the door to political struggles and quick decisions based on convenience rather than long-term vision.

• Hiring or promoting by consensus: Seeking “an absence of weaknesses” instead of strong strengths kills organizations. Flat, risk-free, non-contributing profiles are chosen, and the chance to add excellent talent in key areas is lost.

But there are solutions.

5. How to avoid chaos in organizations

Horowitz proposes a brilliant analogy: the karate dojo.

In good karate dojos, moving from brown belt to black belt isn’t just about knowing the technique. You have to defeat someone who’s already a black belt. That ensures that no new black belt is worse than the weakest current one.

In business, there are no physical fights, but we can replicate the principle of a guaranteed minimum level.

Here are 2 strategies to achieve it:

Strategy 1: Define skills with great precision

Forget “good leadership skills” or “excellent communication.”

There must be a highly detailed description of the functions to be performed, the typical deadlines, the tools to master, and the knowledge and skills required at an expert level to do the job without problems.

The more specific, the harder it is for someone who “just meets the basics” to slip through.

Strategy 2: Formal promotion processes

To avoid bad decisions, there should be an evaluation group.

A promotion board should review each relevant promotion. Each candidate must justify why they meet the precisely defined skills, and then those abilities should be tested in a practical case.

• If it’s a designer, ask them to create a design within a timeframe.

• If it’s a writer or journalist, ask them to draft a press release.

Candidates’ results are comparable, and there are objective criteria.

This ensures fairness and educates the company’s leadership about the real talent available in each specific area.

This tedious short-term task will have a huge long-term impact. It will always pay off—otherwise, the Peter Principle and the Law of Mediocre People will run rampant.

• Real talent will leave, frustrated.

• Inefficient internal politics will persist.

• The organization will lose competitiveness.

The problem isn’t having unskilled people—over time, they can be trained and become great experts. The problem is when those unskilled people become the compass pointing north…

And that north is crooked.

✍️ Your turn: What promotion processes exist in your organization, and are they truly objective?

💭 Quote of the day: “It takes people a long time to learn the difference between talent and genius, especially ambitious young people.” — Louisa May Alcott, Little Women.

See you next time! 👋

References 📚

1. Horowitz, B. (2014). The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers.

2. Peter, L. F. (1969). The Peter Principle: Why Things Always Go Wrong.