Paula and Peter Principles – Unused or Over-Indulged Intangible Assets

Consider the Paula and Peter Principles…through my lens, as an intangible asset strategist and risk specialist, an outcome of the former (Paula) can manifest as an abundance of unused intangible assets.  While an outcome of the latter (Peter) can manifest as an abundance of over-indulged intangible assets.

In circumstances which many of us are all too familiar, a percentage of Paula’s and Peter’s…earn and/or are presented with opportunities to rise within their profession and ‘test their metal’ so to speak.

As most wise – observant people know from their own experiences…it may not always the absolute best person who is appointed – elevated to fill a higher position!  When (if) that occurs, at some point, its likely one may observe either individual struggling, which may include engaging in unethical behaviors as they endeavor to apply the competencies others presumed they possessed at the outset.

That said, I do hold a certain level of confidence regarding the Peter Principle especially…as Tom Hanks rather famously said in the film Forrest Gump, ‘s..t happens’.  The Paula and Peter Principles’ represent an intriguing arena for an intangible asset strategist and risk specialist as I.

Very simply, the Paula Principle is characterized (defined) as…most women work below their full level of competence or qualification, says author Tom Schuller.  The Paula Principle is important, because across all industrialized (OECD) countries women and girls outperform men and boys educationally, and go on to add to their competences at a higher rate as adults, but these presumed advantages are not consistently reflected in their respective career and salary trajectories.

Whereas, again very simply, the Peter Principle is the formers mirror image…that is, people (males predominantly) rise to their level of incompetence.  In other words, people receive promotions until they’re job performance is poor enough not to be promoted further. Peter, Laurence J.; Hull, Raymond 

  • More specifically, The Peter Principle represents the notion that anything that works will be used in progressively more challenging applications until it fails.
  • Peter and Hull noted that there is a strong temptation for people to use what has worked before, ala past practice, even when it may not be appropriate for the current situation and/or set of circumstances.

In conventional organizational structures…assessing employee’s potential for a promotion is often based on their performance in their current position. In Peter and Paula contexts, this can result in one being promoted to their highest level of competence and potentially then, to a role in which they are less competent, perhaps, incompetent, thus reaching their (personal) career ceiling in that organization.

Authors Laurence Peter and Raymond Hull, (The Peter Principle) also suggest that…

  • in time, every post tends to be occupied by an employee who is incompetent to carry out their assigned responsibilities – duties and that work may be accomplished by employees who have not yet reached their level of incompetence.

Dr. Peter did note that one’s incompetence may, at least in part, be attributed to the required skills (for higher positions) are different, but not necessarily more difficult…for example, an excellent engineer may be a poor manager, if, for example, he or she lacks relevant – necessary interpersonal skills to lead a team of people or colleagues.

So, what is found in some companies, is that…in lieu of promoting a talented “super-competent” junior employee, a company may promote an incompetent manager to a position who may become problematic, on various levels, to a business as a whole, and/or a specific business unit.

More specifically, one’s incompetence may also materialize…as the loss of relationship capital, i.e., external rebuke and dismissiveness, merely because an individual has been appointed – promoted to a position that exceed their level of competence.

To be sure, the Peter and Paula Principles have influenced some perceptions I may hold…relative to intellectual, relationship, and structural capital. It really does matter that individuals presented with opportunities to put their (higher level) competencies to practice, succeed, while also recognizing that others may perform at a mediocre level, or fail miserably.

Interestingly, the OECD – Organization for Economic Co-operation and Development reports…( in almost every (OECD) member country (a.) girls outperform boys in school, and (b.) more women than men graduate from universities.  As comedian Bill Engval frequently says, ‘that’s a sign’!

OECD’s mission, of course, among other things, is to promote policies that will improve the economic and social well-being of people…in that regard, OECD routinely finds that once women are in work, they are keener, presumably, more so than men and add to their competences, i.e., they are more likely to engage in vocational training and participate in general adult learning. So, in addition to their initial greater success in school, women are adding additional skills sets to their personal – professional repertoire at a faster rate than men!

Michael D. Moberly February 19, 2018 St. Louis [email protected] ‘The Business Intangible Asset Blog’ since May 2006  ‘where one’s attention span, intangible assets, and solutions converge’!

Readers are invited to explore other papers, books, and blog posts I have published at


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