I feel like actual competition is severely lacking leading to people not having an reward for success or consequence for failure.
That's very different from company environments.
The Peter Principle is also unfortunately an overly simplistic model. Yes, some people can get promoted to a level where they technically can't cope anymore, but ability is rarely the measure by which people advance (except at the lowest grades where your political power is almost nil).
Really feels shoehorned in.
Indeed, the more transparent a system is, the better it works toward its goals, since issues can be identified and fixed quickly. Of course, the nodes within the system that profit from obfuscation are determined to avoid real transparency across the network, as it would easily upend their parasitic game.
If we apply this to the global economy and society, we can see how billionaires, monopolistic companies, and other rent-seeking nodes wrap themselves in layers of obfuscation: PR, propaganda, media relations, politics, NDAs, patents. They then use those obscured resources to maintain and expand their illegitimate resources further through methods like lobbying, politics, tax loopholes, specialized laws.
Therefore, transparency is fundamental for any operating system to stay healthy, distribute power evenly, and avoid succumbing to the exploitation of a few power-aggregating parasitic nodes.
Very often, the cause of imposter syndrome is that there is, in fact, an imposter. It just ain't YOU.
It sounds like you're saying that someone else is making you (the receiver of the advice, not you, jrm4) feel incompetent. How are they doing so? Shifting the blame for their own incompetence? Trying to push work on you that really should be their work, but they can't do?
And, how would you detect this? By realizing that it shouldn't be your work? But that takes knowledge of how the organization should run that a person with imposter syndrome isn't likely to have. Even more, isn't likely to be confident that they have.
About the first, being manager is not inherently a more difficult job than being a senior IC. It's just a wildly different skillset.
About the second, reaching a position you can't do does not at all mean you'll never be able to do it. We learn.
The right insight there is that the switch to management as a necessary step to grow is horribly handled. But "leader as a profession" sucks as well, managers fundamentally ignorant of the kind of work they're managing.
I think what we need is a more fluid relationship between work and learning. We assume a college->work pipeline, when maybe we should have career stages at which we go back to further learning.
I personally like self learning, but I've met way too many cases of managers that were great engineers and awful at people management. At the end of the day the truth is nobody explicitly taught them the new required skills.
We shouldn't base the system on their first reports being guinea pigs while the manager wings it.