“I hate people management and the politics of corporate America. I feel like I traded my soul to be a politician.”
That confession, pulled from a product management subreddit thread cuts deep. It speaks to what many product managers feel after stepping into leadership roles.
The irony is, they were promoted because they were good at the job. Strong individual contributors(IC). Clear thinkers. Fast executors. But the skills that made them great ICs are not the same skills needed to lead a team.
There is a name for this: the Peter Principle. Coined by Dr Laurence J. Peter in 1969, it describes what happens when people get promoted until they reach a role they are not equipped for. In product management, it shows up like this:
- High-performing PMs are moved into people management
- No one asks if they want that job
- They end up overwhelmed or quietly failing because leadership requires a completely different skillset
This article looks at how the Peter Principle derails product management careers, how to recognise when you’re in the wrong role, and three ways to reset—including how to step back without losing ground. It also outlines what companies can do to fix the system and stop repeating the same pattern.
If you have ever thought, “I was better at my old job, and I liked it more,” you are not alone. You are not a failed leader. You might just be stuck in a system that rewards the wrong things.
The Story
Sarah was your star product manager. Users loved her product features. She hit every goal. Engineers lined up to work with her. So when a leadership role opened up, promoting her felt like the obvious move.
Six months later, everything looks different.
Her team seems disengaged. Deadlines keep slipping. She’s working late every night. That spark she once had for product work is gone.
This isn’t Sarah failing. This is the Peter Principle taking the driving seat.
What is the Peter Principle?
In 1969, Dr Laurence Peter observed a pattern in most organisations: “In a hierarchy, people tend to rise to their level of incompetence.”
In product, it looks like this:
- You’re excellent at core PM work: discovery, execution, analysis
- The company rewards you with a management title
- Suddenly, you need a different skillset: coaching, alignment, strategy
Why PMs feel the pain more than most
Unlike engineering, where individual contributor and manager paths are usually separate, product roles lack the same clarity.
That leaves PMs with a tough choice:
- Stay hands-on and hit a ceiling
- Move into management and risk hating the job
Andy Grove nailed it in High Output Management. The traits that make someone great at the work do not always translate to managing others. There is some overlap, but the day-to-day is different.
The problem is structural. Companies promote based on past performance, not on whether someone is suited for the next role. That’s how great PMs end up in positions that drain their energy and limit their impact.
When Talent Became a Trap
In the early 2000s, Microsoft was on top. The company had cash, momentum, and global reach. Steve Ballmer was in charge. High energy and brilliant at sales.
But inside Microsoft, something was breaking.
Each year, managers ranked their teams through stack ranking. Doing great work wasn’t enough. You had to outperform peers. A few would be marked as top performers. Some as average. Others as underperforming. This happened even if they were doing everything right.
To retain talent, Microsoft leaned on promotion. Strong product builders were moved into management roles. These were people who excelled at discovery, shipping features, and delighting users. The move looked like a reward. For many, it became a dead end.
These newly promoted managers found themselves drowning in reviews, alignment meetings, and office politics. No training prepared them for this shift. The skills that made them great became irrelevant. The work that excited them faded.
Some burned out. Others quit. Many became mediocre managers. Teams lost momentum. Internal competition replaced external focus. Innovation slowed. Morale crashed.
Even Ballmer struggled to lead through major shifts.
Microsoft missed key moments. Smartphones. Tablets. Early cloud infrastructure.
The issue ran deeper than strategy. Across the organisation, people were being promoted for yesterday’s skills, not tomorrow’s challenges.
Change didn’t come until Satya Nadella stepped in. Stack ranking was removed. The focus moved to collaboration, continuous learning, and playing to people’s strengths. Managers were no longer the only path forward. Individual contributors were valued again. Microsoft began to innovate with purpose, and the culture finally started to shift.
Warning Signs You’re in the Wrong Role
If the Peter Principle is playing out in your career, these signals are worth paying attention to.
You Keep Saying “I Miss Building”
You catch yourself thinking about the work you used to enjoy. Writing PRDs. Exploring data. Shaping early features. You feel a pull toward hands-on tasks and sometimes take them on just to feel useful. You tell yourself it’s faster if you do it yourself, but it’s more than that. The work you used to love is no longer part of your role.
This feeling is not nostalgia. It’s a signal.
When your day-to-day feels disconnected from your strengths, it often means your role has moved away from what you’re good at and motivates you.
You’re Burning Out on People Problems
The calendar is packed. Most of it is meetings. Some are about meetings. You’re solving interpersonal issues between engineers. You’re managing expectations across stakeholders. You’re stepping into HR territory more than product strategy.
Ask yourself:
- Do I feel energised by team development?
- Or do I leave most meetings feeling flat and frustrated?
If the second answer is true, your role may not be the right fit.
Your Team Feels Lost With You
You struggle to explain the team’s mission beyond what senior leadership assigned. Success metrics are unclear. You keep postponing hard conversations because you’re not sure what to say. It feels easier to keep the engine running than to ask where the vehicle is going.
This usually comes from one of two things:
- You were promoted without clear leadership training
- You were never sure if you wanted this role in the first place
When you lack clarity, your team feels it. Direction feeds confidence. And when that confidence is missing, alignment starts to slip.
Your Performance Is Slowly Slipping
subtle red flags starts to show:
- You get left out of strategy sessions you used to join
- Your VP starts attending your meetings, quietly observing
- Your one-on-ones are delayed or deprioritised
No one says anything directly, but the signals are there. You’re no longer seen as central to the work. And in most companies, leadership misalignment goes unaddressed for too long, especially when the person was previously high-performing.
You Blame Yourself and Stay Silent
You feel it in your gut: this role isn’t working. But you hesitate to say it out loud.
You tell yourself:
- “Maybe I just need to try harder”
- Maybe I’m just not cut out for this”
- “Other people seem to handle this fine”
But this isn’t about effort. It’s about fit. Leadership requires a different skillset. If the role drains you more than it drives you, it’s not failure. It’s a sign you’ve moved away from the work that made you strong in the first place.
Why Companies Set PMs Up to Fail
Most organisations don’t mean to fail their product managers. But the way they’re structured guarantees it.
The “Only Up” Trap
Most tech companies don’t offer a proper path for senior IC PMs. You either stay close to the work and hit a ceiling, or move into management to earn more and stay visible.
At Amazon, for example, a Principal PM working at scale might still earn less than a Director who oversees the same scope. Across the industry, status and compensation are tied to team size, not impact.
This leaves strong PMs in a difficult spot:
- Stay in a role they enjoy and stall their career
- Step into management and risk losing interest in the work
Many take the promotion, not because it suits them, but because it’s the only way forward. That shift pulls great ICs out of their strengths and into roles they were never aiming for.
Promoted for the Wrong Reasons
PMs are usually promoted based on what they shipped. The assumption is that someone who delivers strong product outcomes will do just as well managing others. But leadership requires a different skillset.
You need to coach. You need to handle ambiguity. You need to work across politics and still move things forward. These traits are rarely assessed, yet they’re critical once you step into a leadership role.
As Kim Scott points out in Radical Candor, great execution doesn’t mean great management. But companies continue to promote people based on their past role, not the one they’re stepping into.
No Training, No Support
One week you’re a PM focused on shipping. The next, you’re managing a team of five. That’s the extent of onboarding in many companies. There’s no guidance on how to lead.
What’s missing:
- Conflict resolution skills
- Delegation frameworks
- Stakeholder alignment strategies
According to Gartner, 85% of new managers say they got no training in their first year. Companies invest heavily in onboarding for ICs. But they leave new leaders to figure it out alone. Managing people is treated like a natural next step, not a job that needs its own foundations.
The “Player-Coach” Illusion
Companies often say their managers can stay hands-on. In reality, that rarely holds. You’re accountable for the team’s output, not your own. IC work becomes something you squeeze in after hours.
This creates friction. The team feels over-managed. You feel overstretched. Neither side gets what they need.
First Round Review reports that this hybrid setup fails most first-time managers. The demands of building and leading pull in different directions. One always suffers.
No Way Back
Most companies don’t make it easy to return to IC work. There’s no space for trial runs. No clear path back. No real parity between IC and manager roles when it comes to pay or recognition.
That lack of flexibility traps people in roles that don’t fit.
Why does it persist?
- Admitting a move was wrong feels like failure in high-performance environments
- HR systems reward titles over impact
- Pay bands are tied to hierarchy
- ICs are seen as less ambitious, even when their work is critical to product success
These systems create the perfect conditions for the Peter Principle to take hold. Companies move great PMs out of the roles where they thrive. Then they keep them locked in positions that don’t make the most of their strengths.
How to Fix It: Three Practical Options
You’re not trapped. If the management path isn’t working, there are ways to reset without starting over.
Option 1: Return to IC Work
This route makes sense if you want to build again. If you find people issues exhausting. If the title matters less than doing the work well.
Plenty of product leaders have made this shift and found more focus, more impact, and more satisfaction.
Start with how you frame the move. This isn’t a step back. It’s a decision to maximise where you add the most value. Say something like:
“I’ve realised my strength is in building. I’d like to take on a Principal PM role and lead [specific initiative].”
Offer a plan for the transition:
- Help define the scope of your replacement’s role
- Stay on to support hiring and onboarding
- Propose a handover period to keep things stable
This shows maturity and care for the team.
Protect your compensation. At companies like Google and Meta, senior ICs are paid as well as (or better than) many managers. Ask to retain your level. If you’re a Group PM, propose shifting to Staff or Principal PM while keeping your comp package intact.
IC paths are strong in many companies:
- Google’s Staff PMs lead across product areas
- Meta’s Principal PMs drive zero-to-one launches
- Shopify’s Senior Staff PMs work on core business risks
Before the conversation, check benchmarks. Sites like levels.fyi and ITjobwatch can help you compare compensation for IC and manager tracks at your level.
Returning to IC work doesn’t mean stepping down. It means stepping back into what you do best.
Daniel Doubrovkine’s story
After years moving up the leadership ladder, from Dev Lead to Dev Manager, then Director, Head of Engineering, and finally CTO at Artsy, Daniel began to feel a shift. With each promotion, he moved further away from the work that gave him energy. The problem solving. The technical depth. The part of the job that made it worth doing.
He described reaching a point where senior leaders become “organizationally important, but useless.” Still in the room, still making decisions, but no longer close to the work itself.
In 2019, at age 43, Daniel made a change. He stepped down as CTO and joined Amazon Web Services as a Principal Engineer. It was his first IC role in over a decade.
Some would call it a step back. Daniel saw it differently. It was a chance to stay sharp. To build again. To do work at a scale most managers never touch.
He wrote about the shift in simple terms:
“At 43, I’ve extended my technical relevance by a decade. I’m operating at a level few managers reach. My career has always been grounded in two things: deep technical understanding and the ability to deliver results. That’s still true.”
This wasn’t about giving up influence. As a Principal Engineer, Daniel shaped strategy across multiple teams and critical systems. He stayed involved in promotions, hiring, and organisational reviews. His impact didn’t shrink. It widened.
Option 2: Grow Into Leadership
This path is worth considering if you enjoy coaching others, are willing to go through short-term discomfort for long-term growth, and can handle organisational politics without letting it wear you down. Leadership is a skill. It can be learned through focused practice and time.
Start with delegation. Drop the habit of saying, “I’ll just do it myself.” Use the 70% rule instead: if someone can do a task 70% as well as you, hand it off. That shift is essential if you want to scale your impact beyond your own output.
Stakeholder management becomes a core part of the role. Map out who holds influence. Understand how decisions are made and how different people interact. This isn’t playing politics. It is learning how the organisation works and figuring out how to move things forward within that structure.
Conflict resolution also matters. It’s about being clear without being abrasive. Kim Scott’s idea of “Radical Candor” helps here: care personally, challenge directly. That balance lets you handle performance issues while still keeping trust.
If you want to build a stronger foundation as a leader, start with these:
- The Making of a Manager by Julie Zhuo. A clear guide to the day-to-day skills new managers need.
- Empowered by Marty Cagan. A deeper look at how effective product leaders think, work, and support their teams.
Expect the transition to take time. 18 to 24 months is normal. Track your progress monthly. Without that feedback loop, it’s easy to feel stuck before the pieces start to click.
Option 3: Hybrid Player-Coach Roles
This path can work if you enjoy both strategy and execution, if your company supports flexible structures, and if you’re leading a small team of fewer than five people. It gives you the chance to stay hands-on while also guiding others.
Hybrid roles fit best in specific situations:
- Early-stage startups where everyone covers multiple responsibilities
- Special projects like cross-functional tiger teams
- Strategic roles in the CPO’s office where you lead initiatives and contribute directly
But there are trade-offs.
The biggest risk is drifting into IC work by default. What’s supposed to be a balanced role ends up being 80 percent execution and 20 percent leadership. To avoid that, protect your time. Block out clear windows for deep work and separate time for team leadership. If you don’t manage this deliberately, one side will always take over.
Team dynamics also matter. Junior PMs need full attention. If they feel ignored or unsupported, they’ll lose confidence quickly. Be transparent about how your time is split. Say something like, “I’m spending 30 percent of my time on Project X and the rest focused on leading this team.” Clarity builds trust.
There’s also a long-term consideration. Some companies see hybrid roles as a lack of commitment to either path. That perception can limit your chances of moving up. If this is a concern, document your leadership contributions clearly. Show how you’ve driven team outcomes, not just product deliverables.
If you’re exploring this path, Staff Engineer by Will Larson offers useful perspective. It’s focused on engineering, but many of the lessons apply to hybrid PM roles too.
Choosing the Right Path
There’s no perfect formula. But there are a few things that can guide your decision.
Start with your energy. Look back on the last few weeks. After a full day of managing people, do you feel energised or drained? Pay attention to that. It usually tells you more than any feedback cycle.
Look ahead. In five years, do you see yourself leading a company, owning a product vision, or going deep in a technical craft? Let that direction guide what you choose next.
Now look at your company. Will they support the move you’re considering? Do they have the structure and flexibility to make it work? Are they open to different paths, or locked into one way of thinking?
One PM who moved back into IC work put it well:
“The wrong role will shrink you. The right one will let you breathe.”
It’s about doing the kind of work that fits your strengths and keeps you growing.
What Companies Can Do to Fix the System
The Peter Principle isn’t about poor performance. It’s about poor structure. Most companies promote based on the wrong signals and offer too few ways for talent to grow without leaving their strengths behind.
Build Real Dual Tracks
Companies need two distinct paths: one for individual contributors, the other for people leaders. Both should offer equal pay, status, and long-term growth.
At Shopify, Staff PMs are paid on par with Directors. The scope of their work is different, but the impact is recognised equally. This removes the pressure to manage for the sake of status. Progression becomes about fit, not hierarchy.
When growth doesn’t require switching roles, people stay focused. They stay motivated. They keep working from their strengths.
Test Before You Promote
Leadership should be tried, not assumed. Before giving someone a team, give them a project. Ask them to lead a three-month initiative. Let them run the process, navigate ambiguity, and align stakeholders. Use that experience to decide whether the role suits them—and whether they want it.
Shadowing helps build real context. Pair aspiring managers with experienced leads. Let them join challenging conversation and co-run one-on-ones. The aim is not to rehearse the role, but to understand what it actually involves.
And rethink how potential is measured. Stop focusing only on outputs shipped. Start looking at how someone builds trust, coaches others, and handles complexity. Those are the early signals of real leadership.
Normalise “Opting Out” of Management
People make better decisions when they know they have options. But in most companies, leaving management feels like failure. That needs to change.
Show what success looks like without a team to manage. Highlight high-impact IC work. Make movement between tracks simple, supported, and free of stigma.
Language matters. Stop treating “individual contributor” as a step down. Talk about IC growth the same way you talk about leadership growth. Words shift perception. Perception shapes culture.
Matthew Skelton puts it clearly in Team Topologies: strong organisations design around strengths, not structure. You get the best from your team by shaping roles to fit people, not by forcing them to climb a ladder.
Conclusion: Build the Path That Fits
The Peter Principle isn’t a personal failure. It’s a design flaw in how companies structure careers. Once you see that, you’re free to make choices based on where you’re strongest–not where the ladder tells you to go.
Start by looking at the work itself. Are the core parts of your role exciting or draining? That’s your signal. Use it to decide what needs to change.
Pick a path that reflects how you work best. If your strength is in hands-on product thinking, go back to it. If you’re drawn to leading, invest in learning how to do it properly. If you need both, work with your team to shape a role that allows it. Each path is valid. What matters is that it fits—and that the work feels meaningful.
