The original Peter Principle made perfect sense for the industrial age: "In a hierarchy, every employee tends to rise to their level of incompetence." In other words, organizations keep promoting people up the organization until the people they promote reach a job where they are now incompetent. Competence compounded until it turns into widespread incompentence.
Industrial organizations are built on competence, and the Peter Principle describes their undoing.
Consider a corollary, one for our times:
"To be promoted beyond your level of confidence."
Too often, the person who wrecks our work is us.
In every modern organization with upward mobility, good people are promoted until they get to the point where they lose their nerve.
You can check out the original Peter Principle here.