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Peter Principle and The Pyramid

There is a workplace crisis occurring at the moment concerning guys between 45 and 55 who find themselves suddenly cast aside by the very organisation in which they have invested years of their time and energy whist building their career.  Why does an organisation stop valuing the accumulated knowledge, experience, client base and network of their older employees?  The simple answer is the Pyramid, prevalent in all organisations that are based on hierarchy. Those who have benefited from this Pyramid structure as they climb the greasy corporate pole view the world from the “inside”, rarely appreciating its dynamics, which is why when the time comes to be cast aside, it is a huge and sometimes devastating shock.

To explain the Pyramid, let’s look at the career of Paul, a successful corporate guy.  From the outset at, let’s say, 25, the movement up through the ranks was quite automatic based on Paul largely doing what he is told with a certain degree of efficiency.  By 35 Paul has become a “domain expert” which is great, as he is now more knowledgable than those around him.  At this stage in the pyramid, things become more challenging as Paul is asked to take on new softer skills – management, communication, influencing, client management, networking – none of which is ever taught at school.

This is also the time the family kicks in – Paul gets married, has kids, moves into a larger house and (if mad enough) starts to contemplate school fees.  All of this exacerbates the financial demands on Paul and the only way to respond is to move up a level in the Pyramid.  The Pyramid becomes thinner the nearer the top you get.  More employees have left than remain and paranoia sets in.  Competition becomes fierce between colleagues on the same level on the pyramid, vying for fewer jobs higher up the pole. It’s not the lack of advancement that’s killing Paul, it’s the others who have been promoted ahead of him that bear the brunt of his frustrations.

Undeterred (or because he has no choice), Paul makes a big push to tackle the soft skills, expands his network with the right senior people in the company and takes on an increased workload to finally get the green light from the powers that be to become a partner in the organisation. During this headlong expansion and lack of sleep, Paul gives no consideration to the bodies left in his wake, the pressure to succeed is too great. Do or die.  Every man for himself. However, at 40 he has made it and can now afford to meet all the financial demands of family life and can even afford to send his kids to the local prep school.

Paul has managed to navigate 15 years of 360 degree reviews, training courses, off-sites and has delivered on key programs for the organisation.  He has a wide network of contacts and has institutional knowledge.  Paul then starts to read believe his own press on his success and cannot see that the ‘Peter Principle’ is now in play – the organisation has promoted him to his ‘level of incompetence’.  This is not to say that Paul is incompetent in what he is doing, he has just basically reached the limit of his skill within the company ranks.  The organisation is grateful for past deliveries but that’s all being banked and he can no longer progress further than his competency allows.  The Pyramid is unsentimental and unless Paul is pushing for the next level, the clock has started to tick.


In good times, an organisation can expand activity and allow the Pyramid to widen in order to accommodate more promotions in to the top levels.  When an organisation flatlines or goes into retreat, however, after a couple of years Paul finds himself hanging on by the skin of his teeth, whilst coaxing key staff to stay at the company with promises of promotion.   At some point gravity takes over and the organisation realises that it cannot accommodate everyone’s ambitions – it’s not personal, it’s just that in the cold light of day the executives will look at the people spreadsheet and decide that Paul’s numbers, at the grand old age of 45, are up and he’s now excess to requirements.

The reason this is such a big shock for Paul, is because he has viewed the Pyramid from within and therefore couldn’t see the wood for the trees.  He didn’t see that the dynamics of attrition as inevitable for everyone other than a select few big cheeses at the top of the pyramid.  There was a time when companies could afford a degree of sentimentality and allowed ageing partners to wile away their final years in the corner office, but the current recession has rightly put an end to that attitude.

The difficulty for Paul is that at the age of 45, he is not prepared for life outside the Pyramid.  It has served him well and in turn he has given a huge amount of energy, time and skill to it.  Losing your place in the pyramid at such an age is difficult.  The kids are 5-10 years away from leaving home, the mortgage remains stubbornly high, and retirement is 20 years off.  It will come as no surprise that Paul moves swiftly from successful career man providing for family in a comfortable part of town to a complete crisis of confidence.

The key message from this article is that being pushed out at the age of 45-50 is increasingly normal in large organisations.  We should understand the dynamics of the Pyramid in play and to prepare for the inevitable.

There are a number of practical things you can do in anticipation – the most obvious is to be realistic about your own brilliance.  Those large packages will not continue forever and the best thing to do is pay down debt as fast as possible.  Invest in your network outside of the Pyramid – industry guys, consultants, charities, if anything just to get out of the bubble and see things from a more balanced perspective.  Timing, as with comedy, is crucial so start to read the tea leaves – being pushed out does not suddenly happen, so be super sensitive (without being paranoid) around behavioural shifts.  Individuals are not quite so unsentimental, but they will passively exclude you from new initiatives, committees, email traffic.  This helps your bosses to justify their actions – again it’s a simple reaction to the pressure being placed on them from above, something has to be done to balance the numbers on that cold, emotionless spreadsheet.

I just about got my timing right and when the axe fell. I was prepared.  I am looking forward to a new chapter in my life  something I find interesting.  Less financial demands of house/kids/holidays allows me to go back down the Pyramid, get paid less but also be less exposed.  Four years from 50, I should now start to plan a completely new career when the kids have flown the nest and one I will be doing for 15-20 years to 70.

Losing your job, and possibly the career you have spent so much time establishing, is extremely difficult and can cause huge stresses and deep emotional difficulties for men.  With a job comes status and for a lot of men, losing one means losing the other.  Self esteem hits rock bottom and depression and anxiety sets in.  The message I want to give is that as much as redundancy is all too common, be prepared. Look at the bigger picture and have a plan b.  It may not happen, but there’s no harm in protecting yourself, should the axe fall for you.  The most important thing is to seek help if you find yourself struggling to cope.  You can call CALM every day of the year on 0800 585858 and trained helpline staff can give you info and support about how you can get help, both financially and emotionally.

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