When It Comes To Power, How Does The CEO Use It?

Published in the San Diego Union-Tribune, August 22, 2016

Power is defined as the ability or capacity to direct or influence the behavior of others. Or as Lord John Acton said: “Power tends to corrupt and absolute power corrupts absolutely.”

These are interesting political times, and so I have turned to Stanford Graduate School of Business (giving Harvard a rest) for some insight on this from Brian Lowery, a professor of organizational behavior.

“If life focuses on the pursuit of happiness (ref: Declaration of Independence), then work focuses on the pursuit of power,” he says. (I am not sure I agree with his thesis, but let’s give him the benefit of the doubt.) I have been thinking about power in terms of one’s network. The famous phrase is “it’s not what you know, it’s who you know.” How does a CEO “influence” his team without appearing to be a dictator giving commandments? (Steve Jobs and a few others are exceptions to the rule). What is it to have power and then to wield it?

Lowery posits six sources of power.

Reward. You have power if you can give a reward— think salary, title, authority. My instinct is this is a modest power, meaning if your developer doesn’t think the raise is enough, he is outta there and another job is waiting. So the employee has power as well. Consider increased stock options.

Coercion. This works well in prison, but I do not think it is an enlightened way to lead in normal circumstances. Once again, the employee has power. This might work well with the TSA at the airport, but the millennial generation is not much inclined to blindly follow by dint of any threat. You are then in the box of having to make good on the threat— which might be extremely counterproductive to your company.

This is the problem of unintended consequences.

Information. Say hello to Washington, D.C. Who is on the inside and who is not is the currency of power in the beltway. I see in my companies a distinct movement toward ultimate transparency in management. Think about the customer service agent at the airport when your flight has been canceled (like my most recent airplane flight) — that is power.

Legitimate. It used to be that parents were “entitled” to tell or guide or discipline their children— because they were the parents. They had legitimate power. Not anymore. This one went out in the 1980s.

Expert. This is a big one.

If you are building a company and only Harriet Smith knows how to load balance the network, she has the power. That is the fantasy of the service provider. They are purported experts— except there are a multitude of them, so their information is widespread and not proprietary. But the power of the rainmaker lawyer— the one who knows the cellphone of Vinod Khosla — OK, that is real power. He may not be an expert in corporate security law, but he holds the potential key to your financing and that phone number is going to cost you.

Referent. This is a fancy word for celebrity, for fame, status, charisma. It is the whole worldwide media of people who are famous for being famous— and thus are often asked to give their opinions on subjects about which they know nothing.

But they have an entourage — and the entourage has power by mere degrees of separation.

The above categories are interesting, but what moves my personal needle is not power but persuasion. I want to lead by giving the compelling argument, by reasoning with enough rigor and skill that the direction I am asking the team to follow becomes “obvious.” And there is nothing unique about my thinking — all CEOs aspire to these themes.

Lowery also worries about “inappropriate behavior” when you have power. For that, just google stupid executives having affairs with their secretaries — no shortage there.

My instinct is that power is constantly in flux and that executives often “overplay” their hand. There is the famous leadership/ negotiation mantra of knowing when to “draw a line in the sand”— OK, hotshot, but when the other guy walks over that line— your only option may be to take your shovel and pail and walk away.


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