What Power Is—and What It Isn’t

What Power Is—and What It Isn’t

How to increase the total quantity of power in the organization so that the power given to some does not comes at the expense of the power of others.

By Yves Morieux and Peter Tollman

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Yves Morieux is a senior partner and managing director in the Washington, D.C., office of the Boston Consulting Group. Peter Tollman is a senior partner and managing director in BCG’s Boston office. From Six Simple Rules: How to Manage Complexity Without Getting Complicated, ©2014 The Boston Consulting Group Inc. Reprinted by permission of Harvard Business Review Press.

Most managers understand that power is an important part of organizational life. But their understanding is often corrupted by the assumptions embedded in the hard and soft approaches. The hard approach assumes that power is an automatic consequence of position of formal authority. This belief is reflected in comments such as “the higher you are on the org chart, the most power you have” or, “if you have the authority, you automatically have the power” or, “if you have the knowledge, you have the power.”

The soft approach, by contrast, tends to focus on leadership style or personal traits such as charisma. This view is reflected in statements such as “she is a tremendously powerful person” or, “he has a presence that projects power.”

Power is none of these things. Overly complicated organizations have managers in all kinds of positions that, according to the org chart, have authority, but who in reality have little or no power to make things happen.

These misunderstandings about power did not do much harm when relatively few interactions were required to get things done, say, on the traditional assembly line. But the more that performance requires multiple interactions among many different organizational units, the more these common misunderstandings about power become costly for the company and its people.

What is power? Power is the possibility for one person to make a difference on issues—or stakes—that matter to someone else. Because A can make a difference on issues that matter to B, then B will do things that he or she would not have done without A’s intervention. Power always exists, one way or another, either helping or hindering good outcomes. It helps mobilize people, either directly or indirectly, toward a specific target or a goal. Look to the places in an organization where people are doing things that, if left to their own devices, they probably would not be doing. It is a sure bet that someone is exercising power over them.

Another way of putting it is that power comes from having control over uncertainties that are relevant to others and to the organization. The control of uncertainties determines the terms of exchange between the individual and the organization. The greater the uncertainties controlled by one actor for other organization members, the better that actor can negotiate his or her participation and the more he or she will get in return from the organization.

Power exists only in the relations between people; it is an imbalanced exchange of behaviors. Despite popular belief, power is not particularly related to an imbalance of information available to the parties. Instead, the asymmetry relates to the terms of exchange in a relationship: the reciprocal possibilities of action. The imbalance—thus, the power—comes from the fact that A can make a greater difference regarding stakes that matter to B than the reverse. On another issue or as the stakes change, though, B may have power over A. Power is an attribute neither of position nor of people’s personality traits. Rather, it stems from a relationship tied to a situation.

Power has significant implications for how behaviors adjust to each other. The people with the most power bear the least adjustment cost; those with the least power bear the most. The powerless will adjust their behavior to the powerful. Depending on how these behaviors adjust and combine with each other, the results will be more or less beneficial for performance. If what is ideal for the powerful deviates from the company’s overall goals, the power balance will not be beneficial to the company.

The Total Quantity of Power

When power is used to mobilize collective action that furthers the goals of an organization, it is a fabulous thing. This is what happened at InterLodge, a struggling travel and tourism company with which we worked. When the hotel receptionists were given more power (in the form of a voice in the performance evaluation of maintenance and housekeeping staff), they had much greater capacity to play the integrator role. The end result was more—and more effective—cooperation in the achievement of the organization’s goals.

What happened at InterLodge is what people in the business world often call empowerment. It involved a redistribution of power from the back-office functions to the receptionists. In the past, promotion within the back-office functions of maintenance and housekeeping was determined exclusively by the managers of those functions. By giving the receptionists a say in back-office performance evaluations and promotion decisions, InterLodge management shifted some of that power to the receptionists.

As effective as such reallocations of power can be, however, it is increasingly important in situations of business complexity for organizations to create many new sources of power. Coping with complexity requires higher levels of both autonomy and cooperation. But when people cooperate, they are no longer self-sufficient—they become dependent on others. Therefore, the influence you have have (or do not have) over others will play a central role in your decision not only to cooperate but also how much to cooperate. The more influence you have over the behavior of others, the more you can take the risk of becoming dependent on what they do. In other words, power determines the capacity to enter into the kind of cooperative interactions and reciprocity of action that are essential for addressing business complexity.

For this reason, power in the organization often needs to be something more than a zero-sum game. If power is only redistributed, then as performance requirements multiply, there will always be someone without the power to step into the cooperation game. The day InterLodge needed to offer innovative new services (Internet connectivity) to its customers, the organization had to create new power bases for its maintenance staff.

You need to create a positive-sum game. You need to increase the total quantity of power in the organization so that the power given to some does not comes at the expense of the power of others. The new power can benefit managers in their integrator role and also team members so they can further cooperate with others. That way, you can channel the intelligence of more people against more fronts in a coherent yet flexible way, for both greater effectiveness and adaptiveness.

Creating New Stakes

Given that power is so important to success in the modern business organization, a key role of the manager is to find ways to create new sources of power and to multiply the power bases inside the organization. He or she can do so by adding at least one new stake that matters to someone and that the achievement of which depends on others in the organization. A stake is something that matters to people, that makes a difference to them. A stake can be either positive or negative, something that a particular individual or group either wants to have or wants to avoid. Those who have an influence over this stake will benefit from having power over those for whom the stake matters. When a stake is new, it is a new power base that benefits some without being taken away from others.

Of course, not all stakes will create the kind of power that will mobilize action in the direction the organization needs and wants. A stake that is meaningful to an individual or group but has no relation to the performance requirements of the organization is obviously not an appropriate or effective stake. Rather, managers need to come up with stakes that matter to the relevant actors and also relate positively to the company’s performance requirements.

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What Power Is—and What It Isn’t
By Yves Morieux and Peter TollmanWhat Power Is—and What It Isn’t

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