The Culture Crisis Continues

Tuning in to last night’s episode of ‘The Apprentice’ allowed me to witness a further dynamic of the ‘Culture Crisis’.

Last night’s brief was simple – create a campaign to raise awareness of English sparkling wine.

The consultant in me leaped with joy!  A move away from the traditional blunt sales instrument that’s been used thus far, this required some real business nuance and a more refined touch.

The 7 ‘C’s of Consulting, a gift for this particular task:

• Client
• Clarify
• Create
• Change
• Confirm
• Continue
• Close

Granted, there weren’t opportunities to fulfill all 7 ‘C’s but there are some fundamental steps which you just can’t skip – ‘Client’ and ‘Clarify’ being the most important in this task.

As defined by the ‘Client’, this was a marketing task, plain and simple. 

Raising awareness is all about creating and then marketing a brand; targeting the right markets; getting your pitch right so that you enhance the brand whilst the message is welcomed by and relevant to the intended recipient(s) and you are meaningfully increasing exposure of your brand to these potential customers in a structured, coherent way.

Having been steeped in 8 weeks of ‘sale or fail’ though, the contestants on both teams missed the brief by a ‘country mile’ to use an English phrase.

They should have been developing the brand:

1. Image
2. Values
3. Identity
4. Awareness
5. Association

What they ended up with was a sales pitch aimed at the people who gave them the original brief, leaving the ‘Client’ disappointed and Lord Sugar having to choose from the best of a bad lot.

The adverts created were damaging to the overall image of the product; it said nothing about the value of the proposition; it didn’t create positive and desirable associations.

It was cheap, sales centric self indulgence rather than putting the proposition at the heart of their efforts and building the brand.

The one redeeming effort was a fantastically crafted English rose champagne glass emblem demonstrating a coherent link between the activity expended and ‘Client’ expectation – a diamond in the rough from Gabrielle Omar.

To sum it up, there was plenty of fizz but not a lot of sparkle from either team.

Biggest winner on the evening – the viewers.  This was an excellent example of how culture drives perception drives behaviour drives results!

It’s National Learning at Work Day as designated by the Chartered Management Institute, hopefully the salient lessons were identified and learned by the remaining hopefuls.  According to the CMI’s research, it may be the only training they receive!

The Culture Crisis on TV

Watching the Apprentice on BBC (UK) last night, I was almost blinded by the bright flash of the obvious that glared out of my screen!

Perception powers behaviour

but those who tuned in were able to watch the Culture Crisis being played out by unwitting actors.

As is standard in the series, Lord Sugar called the teams together and set them their task.

It was a……..selling task.  Well aren’t they all on the Apprentice?  

The team who make the most profit win the task and someone from the losing team will be fired.

A broad remit with very few restrictions and some clear, unambiguous desired outcomes.

A simple enough remit that left plenty of scope for the teams and off they went in search of their treasures to re-sell at a mark up.

Bearing in mind the broad remit the teams were handed, what did catch my attention was a much more subtle observation by Karren Brady, a very successful businesswoman and aide to Lord Sugar throughout the process.

At one stage in apiece to the camera, Karren reflected on the “aggressive sales” technique of the soon to be leaving Jane McEnvoy.

If there is one basic rule in the Apprentice, it is to outsell your “colleagues” as this ensures survival beyond the boardroom brawl.

That Jane has identified this singular objective and modified her behaviour accordingly is not spectacular, in fact quite the opposite, it should have been expected and anticipated.

In the end, Jane was “fired” as she had only sold £10 worth and this was deemed unsuitable when compared to the efforts of her counterparts.

I’m not sure that Jane was too far off the mark!

Whilst Karren again commented on Jane’s aggressive approach to selling, her demise was down purely to the financial figures.  £10 of sales doesn’t cut it in Lord Sugar’s boardroom.

That those arguing to remain in the competition pointed to a lack of direction or clear remit; lack of support; no-one pulling them back from spending money refurbishing the goods and the like seemed to go unnoticed.

That these people demonstrated a lack of business acumen and momentary lapses of common sense in favour of chasing a quick profit, unquestioned and unremarkable.  They made a profit so all’s well that ends well.

Having just blogged on the Culture Crisis sweeping boardrooms across the globe, to watch the effect in glorious HD left me shaking my head and wondering what half life this nuclear  energy powering corporate behaviour will have.

The Culture Crisis

There’s a new crisis sweeping the business world. 

Well it’s not actually that new.  In fact, it’s taken quite a few years for this culture, like any other, to organically grow.

It’s the Culture Crisis.

Organisations the length and breath of the world are discovering the skeletons in their boardroom but only after the rotting corpses have infected large areas of their organisation.

The Scottish Health Secretary has called in 2 consultancy firms to investigate the culture of one of the National Health Service Boards in Scotland.

This investigation into organisational culture was sparked as a result of patients being falsely marked as unavailable for treatment to ensure waiting time targets were met.

This culture crisis is not unique to this particular Health Board; industry, sector or even nation.  It is the very cause of a global financial crisis; it is what led to Fleet Street journalists engaging in phone hacking and undoubtedly countless other smaller incidents and future instances yet to be discovered.

It will claim yet more victims, that much is sure.

Created by our results driven focus, the crisis culture comes when people are encouraged to meet ‘outputs’ or ‘outcomes’ with a conscious; subconscious or even unconscious disregard for ‘inputs’.

The monetization of performance through related bonuses signaled that we value results and the lack of checks and balances in the preceding steps suggested a laissez-faire leadership style prepared to turn a blind eye and avoid difficult questions.  It’s agley and it’s ugly.

That no-one questioned how revolutionary ‘news scoops’ were being attained is unfathomable; that so many patients were unavailable for, at times, critical treatments, incomprehensible.  Reprehensible behavior was not only ignored, it was rewarded and therefore repeated.

Sky now admit to having hacked e-mail accounts because they believed it to be “in the public interest”, revealing that John Darwin was not dead and had scammed his insurers.

The police force investigating the Darwins admits they used the information obtained by Sky’s illegal e-mail hacking to prosecute the Darwin’s.

Ironic that James Murdoch claims not to have read e-mails from within his own company advising him of phone hacking.

True leadership would have avoided this trek down the wrong path.  True leaders would have instilled a sense of responsibility; accountability and established moral boundaries.

The organisational visionaries have been found to be short sighted.  They were never really ‘leaders’ in the true sense of the word, they were merely managing results and the bottom line at the expense of their reputation, I wonder if it was worth it, financially or morally?

‘Because’ or ‘Be the Cause’?

This blog was first published on Linked2Leadership and edited by Tom Shulte

 

My first graduate qualification was in Communication Studies and it was consistently lectured that communication should be clear and concise.

This concept pre-dates the 140-character Twitter-style update. But it utilises this same understanding:

Attention needs to be grabbed and then retained if you’re to make a lasting impact with the intention of affecting future behaviour.

So it is with reluctance in homage to my communications background that I take the single word ‘because’ and section it into three words: ‘Be the Cause’

On Journalism and Business Practices:

Good businesses follow the construct of good news stories.

The recipe for success is this formula:

• What
• Where
• Why
• When
• How
• Who

Focussing on the “Why” (as this is the cornerstone of great businesses and the other questions are ‘operational / management issues’ and therefore not necessarily concerned with the act of leadership):

Often ‘leaders’ ask people to do things……because.

Sometimes this is followed by a statement or statements designed to instil fear in the heart of the target or with the hope it will ‘inspire’ (you cannot motivate anyone, motivation comes from within, it is intrinsic.  Extrinsic influence designed to affect someone is inspiration), coerce or somehow result in desired action.

A simple paradigm shift will spare you the manipulation and avoid mediocrity.  It is not a quick fix but it is always effective.

Don’t use “Because”, use “Be the Cause”

People want purpose.  They don’t want reasons and they certainly don’t want excuses.  They can’t really be motivated by money or driven by desire if you want the right outcomes (see global financial meltdown for evidence!)

They want to understand what their efforts are contributing.  They want to be part of something bigger and meaningful.  Once they understand what it is your organisation is trying to achieve (the WHY), they will give discretionary effort because they believe in ‘the cause’.

This isn’t a mission statement or vision pinned to the corridor walls of HQ – this is the essence of every activity you undertake minute by minute, hour by hour, day by day and year by year.

You need to ask them to ‘be the cause’ not act because……..

Be True to the Cause

Hard Questions:

Are sales figures down?  Are competitors creeping in to your market share?

Easy Answers:

Change your market!  Change your target.

In fact, change pretty much anything so long as it doesn’t change your cause.

Core Values

But know this: If you change your core values, they were never real values; they were just fancy marketing tools and gimmicks.

Think of any long-standing organisation and question how many times they’ve changed their core values.  They may have diversified or innovated but their core values have remained constant.

Many banks and lenders changed their core values to capitalise on the huge profits to be made from irresponsible lending and dubious business transactions.  In 2008 and the preceding years, many great institutions fell.  Those who remain never changed their core values.

They were clear, they wished to ‘be true to the cause’ that founded them; and they were right to do so.

Constant AND Changing?

This is often seen as an oxymoron but it’s not.  Your values are constant and your product / service offering is changing through a natural process of evolution.  You are not changing your ’cause’ even if you stop doing one thing and start doing another.  You can change the ‘what’ without ever changing the ‘why’.

Remember – people work best for ‘the cause’ and customers will remain because they also believe in ‘the cause’.

It’s Never Too Late

If you’re off course, it’s time to get back on now.

Take the 1^st opportunity you have to revisit your core values.  Understand what your own core values are and whether you are truly living YOUR leadership.

If there’s conflict, it’s time to move on.  You probably wouldn’t compromise on price; salary; benefits and other contractual obligations so why compromise on your ‘cause’?

By living your ‘cause’, you and your business will attract like-minded people, your ‘cause’ will become part of the offering to customers and clients; colleagues and investors alike.

A lot of people talk about ‘value add’ to your products and services, I recommend you start thinking about ‘adding values’ to your offering.

It’s what we do

Quite simply, ‘be the cause’ is the pro-active living of your own personal and organisational values.

Inspire!

The 6 Key Indicators of Leadership

This post was first featured on Linked2Leadership and edited by Tom Shulte

Effective leadership is not a single act or facet. Rather, it is multitudinous. It’s like a well-oiled, fine-tuned performance machine. It is not embodied in a single role or person, but is the life that runs through an organisation.

Without leadership, the organisation or entity ceases to move. It is much like an engine driving a vehicle forward. If the engine stops working, the wheels don’t move anyone or anything forward.

The Excellent Leadership Model

To understand the working components of effective leadership, one needs to be familiar with what an effective leadership model looks like.

Q:  How do you know if effective leadership is present in your:

•Organisation

•Business

•Department?

A: Look for the Key Indicators (KI)

Identifying 6 Key Indicators

There are some Key Indicators that, if present, indicate effective leadership is running on all cylinders and moving your team, business, and organization into a strong future. Without them your organization may just be sitting on the side of the road.

1) Core Values

The core values of the organisation are understood and openly lived through the people delivering or interacting with the business.

Ask people the values of the organisation they’re working in. If they rhyme off a list of adjectives in perfect harmony, you can be assured they’re living ‘leadership by diktat’. There will be a policy document or set of statements pinned to every wall and conformity.

True leadership has people doing the right things because it’s the ‘way’ it’s done and they don’t really have to think about it. These values remain long after the big chair in the boardroom has been vacated by one and occupied by another.

2) High Levels of Autonomy

In organisations where great leadership is present, everyone understands their role and function alongside the critical nature of their input.

They don’t need constant supervision and external motivation. They believe in what they’re doing and they push themselves to do it the way it should be done.

3) Change is an Opportunity

Change is viewed as an opportunity to redefine rather than a malignant threat.

Great leadership is the ability to recognise the external and internal environment and mould it into a viable opportunity to shine whilst aiding those around you to understand the true value of the opportunity you are presented with. They can grow like flowers reaching for the sun.

4) Sustainable Business Model

The business remains sustainable and viable across generations of ‘leaders’.

Leadership must be perpetual. Intermittent leadership is not real leadership and great businesses are such because they have cultivated great leaders. This isn’t effective succession planning (although that is important); this is the unity of cause across all staff past, present and future. Effective leadership through people doing it the sustainable way ensures the organisation lives through its people.

5) Like-Minded Synergies

The business attracts other like-minded businesses to engage in partnership working because of shared values and vision and this can be openly and honestly explored and accepted or rejected without animosity or fear.

Often, the focus is on internal relations and machinations, but in reality true “leadership,” is an aura that emanates and is visible to those outside as well as inside the organisation. People genuinely understand what your business is about; how it does its business and they like it.

6) Knowing the Whole Picture

Good leaders have an immediate impact, great leaders leave a legacy.

Above all else, leaders should not be judged on their results alone, but on how those results are achieved and the longevity and sustainability of their impact long after they have left the role.

A Dog’s Tale

I went for an extra long walk this evening for 2 purposes – firstly it was a great opportunity to spend some time alone with my daughter, discussing what’s happening in the life of 10 year olds since returning to school after the Christmas break but also to get some exercise and mental downtime.

A strange and unprecedented thing happened during the walk and I’m equally sure it has as much relevance in the day-to-day ‘dog eat dog’ world of business as it has in the quiet suburban life of Glasgow, Scotland.

The family pet dog, Toby, joins us on these walks.  My daughter likes to walk him on his leash, I prefer to allow him to run off the leash, getting him to follow verbal or audible commands.

My daughter recognises that with this freedom, Toby faces greater risk.

He could run in front of a car; be scared off by another dog or just run away and choose not to listen to or obey the commands.

She dotes on Toby and because of the fear of possible consequences, she attempts to limit the potential negative outcomes through exercising greater control over Toby’s behaviour.

I like to think that Toby respects the freedom I afford him; trusts me not to allow him to come to harm and exercises free will in following.

Would he not obey my daughter’s audible commands?  I don’t know the honest answer to that but I do know that she doesn’t have the confidence in her own ability to control any situation that should arise if Toby didn’t, so she always uses the leash.

Letting go takes great personal strength and courage as well as implicit trust in those you are empowering.

This is unlikely a revelation although most people speak of empowerment and devolution of power as rewards to be earned by those seeking to be empowered, negating or ignoring the personal attributes required of the leader to truly delegate.

What made tonight’s walk especially interesting was more profound.

We went for a longer walk than usual.

About three quarters of the way round the route, I noticed Toby was starting to fall behind.  This is very unusual behaviour for him as he normally prefers to charge ahead, explore and then come back to make sure I’m still there.

We stopped to allow Toby to catch up, just in case he’d found something interesting.  Toby caught us up and we continued on the journey.  Toby fell behind again.  After allowing him to catch up a few times, I became conscious that he was visibly tiring.

His behaviour had changed and Abbie and I both know him well enough to spot this change and the reasons behind it.

Knowing he was too tired, I lifted Toby into my arms before continuing home.  Arriving home, I gave him his treats.  As I sat down, he ignored his treats (unprecedented), jumped up beside me and rested his head on my chest like a child would normally do as they ‘cuddle in’.  At this point, Abbie exclaimed, “Dad, you’re his hero now!”

Having noticed the change in Toby’s behaviour and having responded appropriately at the time he most required my assistance, he now wanted to show his gratitude.

I could have put the leash back on him and made him walk home.  The outcome would have been much the same, at least in the short term.  However, next time he might not be quite so obedient or trusting.

If you’re colleagues genuinely matter to you, you’ll notice when their behaviour changes and will understand there’s a reason for it; you’ll be there to offer assistance at your own inconvenience.  If they don’t, you can always put a metaphorical leash on them and attain the same results…..for a short while anyway, but you’ll need to keep that leash on at all times, good and bad.

I think Toby follows because he wants to, not because I hold the leash.

Happy walking all you leaders and managers, lose the leash and Inspire!

The Buck$ Still Don’t Work!

The CIPD released its “Employee Attitude to Pay 2011” survey findings on 1^st January 2012 and the outlook remains grim.

Reading through the survey, I was taken back to one of my earlier blogs “Now the Buck$ Don’t Work” where I argued that the monetization of motivation and reward is inherently flawed.

Part of my reasoning is that bonuses become ‘hygiene factors’, their presence no longer motivates but their absence will de-motivate if payments have become the established norm. 

The payment of a bonus is perceived to validate and reward performance and encourage further similar behaviours in the future.

A psychological contract is formed between employer and employee. 

The employee’s performance becomes monetised and that monetary value remains constant in the individual’s mind.  If they exceed last quarter / year’s performance by 3%, the bonus should increase in direct correlation.

Interesting then that the CIPD’s research found less than 1 in 5 employers (<20%) communicated the rationale behind their decision to raise, cut or freeze employee’s pay in direct relation to the individual’s performance. 

It went on to establish that employee ‘satisfaction’ even amongst those who received a pay rise, had diminished year-on-year since 2008, throwing some doubt over the correlation between financial reward and satisfaction.

Satisfaction levels did increase where the rationale behind the pay decision was communicated and I’ll take a leap here to suggest the correlation is, always has been and will remain between effort expended and recognition given rather than presence of a financial reward.

It was also interesting to see that over three quarters (76%) of employees who had their pay cut acknowledged the reasons for the cut were discussed with them whilst only 57% of employees whose pay was frozen received similar feedback.

Employers seem to recognise the value of feedback when there’s bad news to be given but an individual’s expectations of feedback are assumed to be met through a pay rise or the issuing of a bonus whilst the survey findings don’t necessarily back that assumption up.

If my leap is right, a proportion of the whopping 43% of respondents who received a pay freeze will be feeling disenfranchised; de-motivated; undervalued and underappreciated due to a lack of simple, timely dialogue.

For those fortunate enough to receive a bonus, only 18% of respondents felt the bonus was awarded to reflect the efforts of the team but 37% felt it reflected their individual performance. 

Either there are a lot of dysfunctional teams being carried by outstanding individuals or there’s an over estimation in the value some individuals perceive for themselves as over half (57%) of employers stated the bonuses were paid as a result of organisational rather than individual performance.

Contrary to many of the arguments put forward for large bonuses to retain talent by corporations (and the Government at one stage), it would appear that communication is valued over and above any supplementary financial transaction between employer and employee and recognition (and open, honest and timely communication) remains the strongest intra-organisational currency.

It’s time to put away the chequebook and clear some space in your diary!

It’s a Wonderful Tao……

A while back, I blogged on the Tao of Business Strategy (first published on Famous Bloggers).

Now, it’s almost Christmas (for those who celebrate) and I sat down to watch the 1946 movie “It’s a Wonderful Life”, a film synonymous with the festive season but one I’ve never viewed before.  Watching the film, I had an ‘epiphany’;

I was witnessing the Tao being played out in this 65 year old movie.

The opening scenes of the film were reminiscient of the ‘run’ on Northern Rock Plc in 2008 (for those in the U.K. or who witnessed pictures of the investors queueing up to withdraw their money in news headlines) as the dawn of the global credit crisis started to emerge from behind a horizon of hubris and over optimism.

For those unfamiliar with the film, there are many great reviews available including this one on Wikipedia.

Consistent with the Tao of Business Strategy, Clarence Odbody, the angel sent to save the main character, explains to George:

“Each man’s life touches so many other lives.”

It is impossible to operate a business without touching the lives of so many others – your colleagues and employees; your suppliers; your customers; your investors and then their networks and families and so it goes on.

As explained in the Tao, this means that each action will create a ripple of cause and effect that resonates across a huge geographical area, the fundemental concept behind Karma.

George contemplates suicide as he doesn’t believe he has any significant role to play in the lives of others (and is worth more dead than alive – at least in monetary terms) so Clarence shows George a world without him.  Bedford Falls has becomes home to sleazy nightclubs and pawn shops.  Bereft of George’s influence, a very different reality transpires.

Without realising it, George has shaped the reality of many people through his actions and interactions.  His altruistic ethos has positively influenced the lives of many both directly and indirectly and he has often led by example or defended those unable to represent themselves where necessary.

George has advocated restraint and moderation where others saw only the opportunity to create greater personal gains at the expense of others.

Taken back to ‘the present’, George decides to face his fate head on and it’s at this point, George reaps the benefits of his earlier interactions as his ‘supporters’ rally to his cause.

As Clarence reflects:

“No man is poor so long as he has friends.”

Strangely, I don’t recall many taxpayers coming to the aid of Northern Rock or other banks and financial institutions as they teetered on the brink of oblivion and in our reality Clarence Oddbody was replaced by Premiers and Heads of State scrambling to prop up failed financial systems using taxpayer’s money.

The financial institutions were ‘without friends’ and the proceeding public outcry and sustained attacks from all quarters suggested a chasm between the perceived acceptable behaviours of either party.  3 years on, Governments continue to debate ‘regulation’ to avoid a repeat.

As much as ‘regulation’ may have factored in some aspects of George’s life, I think the Tao he stuck to was more in keeping with his personally held beliefs and that’s something you can’t ‘regulate’ into people.

In the true spirit of “It’s a Wonderful Life” here’s an alternative vision of how the global financial crisis might have resolved had we ensured we’d invested in the right behaviours in the intervening 65 years.

Merry Christmas, and Inspire in 2012!

The ‘Director Imperative’

Setting up a new company a few months ago now, I had to file with Companies House to create a Limited legal entity (in the U.K).

Going through the various articles associated with doing so, one particular duty of the ‘Director’ made me pause and reflect.

I was then appointed a Director for another company and, during the induction that same “flash” came again.

It’s the “Director Imperative” and it applies to almost every aspect of work and political life.

The Director Imperative is the onus placed on you to ensure the ongoing viability of the entity.

This imperative applies to anyone taking on the role of Director for a company but the principle, if properly translated into thinking and then action, could actually benefit society too.

I’m repeatedly amazed at the infatuation with ‘growth’ economies.  If we’re not talking about our own growth, we’re talking about someone else’s and how we can get our share of that market so that their growth becomes our growth.

Growth’s not a bad thing, in fact it’s essential in most senses but we appear, over the last 20 years, to have forgotten that growth should be second to sustainability and it’s sustainability that is ‘the Director Imperative’.

Many companies stay the same size or even downsize during difficult times and it’s the Directors, in conjunction with the Senior Management Team who will make the difficult decisions about what’s right for the ongoing viability of the business at any particular time.

This is done with  due cognisance to micro and macro-economic climate; availability of necessary skills; desirability and overall anticipated impact on the longevity of the going concern.

Applied to the political climate, our political leaders (substitute “Directors”) are required to make these decisions in conjuntion with the major shareholders (substitute taxpayers).

Unfortunately, as shareholders we’ve demanded continuous and unsustainable growth and our Directors have failed to accurately report the state of the environment or manage our expectations,  culminating in new set  KPI’s (Key Performance Indicators) all premised on ongoing (unsustainable) economic growth.

The monetisation and incentivisation that’s gone on in Boardrooms the (developed economic) world over has resulted in a small, hypercompetitive market turning into a financial maelstrom.  As one ship was sucked in and sunk, the next followed and the next and so it goes on.

Meanwhile, those thought not to be in the race are now enjoying fair wind in their sails and we’re looking to hitch on to their progress as a means of basic survival.

Should survival be achieved, the problem remains that we need a fundemental shift in our own perceptions and the reinstitution of basic societal values to keep us treading safer waters.

Adopting the ‘Director Imperative’ to ensure these values are held at the hearts of industrial Captains will ensure we strive for sustainability above all else.

Get this right and we’ll be in it for the long haul.

Meet your new boss…..the Peter Principle!

There are 2 sides to every glass ceiling and whilst some are concerned with breaking through, for most people the biggest challenge is staying on  the right side of the glass.

Meet the ‘Peter Principle’!

I’m sure most of us will have coined another term for this, most likely affectionately named after a current or previous colleague who seemed to  keep climbing the greasy promotional pole like a kite on a thermal column.

Eventually the thermal stops blowing favourably and the kite’s left flapping as it tries to maintain its lofty heights.

Yes, the ‘Peter Principle’ is that basic yet repeatedly occurring phenomenon whereby people keep getting promoted until they exceed their level of competence and, next rung on the ladder out of reach, they remain in situ for the remainder of their career hoping never to be discovered.

Despite this phenomenon being documented in the 1969 book “The Peter Principle” (Peter & Hull), it continues to happen in businesses around the world with what seems to be incredible regularity.

Why does it still happen?  Essentially because those making the promotion decisions have attained their position as a result of this principle and are now intent on covering their weaknesses through promoting people to fill their own skills gap!

A hangover from our ancestry, humans will conserve energy wherever possible.  This means we become lazy and when we find something that ‘works’, we continue to use and over use it whether that refers to bottling water or appointing managers.

Their track record speaks for itself so where’s the risk? 

This conveniently takes the pressure off the decision maker and places it wholly on the shoulders of the prospect.

Fail and responsibility lies squarely with them, they must have gone off the boil.  Succeed and the person promoting becomes some kind of talent spotting guru with legendary status growing every time they make another successful appointment.

Stop & Consider!

There are a few simple strategies you can deploy to avoid the Peter Principle:

• Make  a temporary appointment.  Managers are vitally important to the health of any organisation so why rush the appointment?  It’s more than likely the Peter Principle will occur with internal promotions, so offer a temporary appointment into the new role.  That way you can test out the candidate’s ability before making a firm commitment on either side.  A poor appointment can be a very negative experience for the staffer as well as the organisation and you could end up losing a great member of your team if you’re not careful.
• Think about other ways to recognise exceptional work.  Some people are happy doing what they do best (think Mazlow’s hierarchy) and for them, that’s ‘self -actualisation’.  Promotion may be your motivator but they may only take it because they don’t want to seem ungrateful or unambitious. If promotion’s the right option for them, have a proper training programme that makes the transition to the next level a step you take together.
• Think about intra-organisational secondments. A great way to build well rounded managers is to give them short secondments into other areas of work so they better understand “the big picture”.
• Have a structured approach to assessing performance – are they really as good as you think they are and can you prove it?

Above all, have a structured approach to appointing managers based on ability.

BUT this doesn’t mean throwing the kitchen sink at the process!  Don’t use psychometric tests and competency based interviews unless this will genuinely help identify the diamond you’re seeking.  Select the right tools and strategies and you’ll invariably select the right candidate.