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Peter principle suggests that people end up promoted to "a level of respective incompetence". It applies to corporate structures, but not exclusively. Smart people will realize a ceiling is reached and will seek better pastures. From a pragmatic business point of view, it's better to let such an employee go. It doesn't pay to witness a failure caused by an individual's incompetence. Nor a demotion will sit well with a human ego. This could cause more damage.
I think this idea also applies to personal relationships. And that's where it could get really messy, really fast. Imagine a situation where you get to know someone. Initially, you treat him as an outsider, who happened to spark your interest somehow. Over time a closer relationship develops. A said individual is being promoted so to speak. As time goes by and you get to know each other better, an even closer bond forms. Yet, at some point, a certain quality or a shortcoming will expose itself, and you will realize that a plateau is reached. Perhaps you even went over the top. That's the point you realize no further developments with this individual, Things could remain where they are, but no entry to the next circle of trust. That's your view. The other side, desiring more "promotions" might get frustrated by the lack of it. Not a wise individual, who will understand and hopefully accept or walk. It's a childish egomaniac that would be a problem.
Hopefully a time for explanations never comes.
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