Transforming the Nature of Power in Organizations
Whether an organization is effective or not is all about power. Effective organizations are influential players who are able to shape the world when they can and have the wherewithal to quickly adapt when they can’t. Ineffective organizations are those that are powerless in the face of complex or challenging circumstances. If you want to be the leader of an effective organization, you need to be highly skillful in the use of power.
Unfortunately, power generally has a bad reputation, and most of us tend to think of power in a negative light. That’s because our typical experiences with power are inside hierarchical organizations where power is equated with control. However, in actuality, power is neutral; it is neither good nor bad. Whether we experience power as positive or negative often reflects the quality of our relationships. That’s because power is always interpersonal and only exists within the context of relationships. In hierarchical organizations, power is generally ascribed by position, with those few in higher positions having more authority than the many in the lower ranks. Thus, most of us perceive the exercise of authority as about being in charge and having power over people.
However, the technology revolution is radically reshaping how power is exercised, especially in large organizations. The late psychologist Abraham Maslow observed that the most effective leaders invest in power with rather than power over people. Our early experiences with online collaborations demonstrate that Maslow’s observation also holds true for organizations. Open-source platforms, such as Linux, Craigslist, and eBay, are not interested in exerting control or having power over people. These twenty-first-century businesses understand that, in today’s fast-paced world, the best companies are those that build platforms to share power with people. By building networked structures to aggregate and leverage the collective intelligence of the many, these mass collaboration enterprises can redefine whole industries and easily outperform their traditional counterparts.
Leaders of these innovative enterprises understand that power with people is much more effective than power over people, especially when organizations must manage at the speed of change to remain competitive. They also understand that, in a post-digital world, the basis of power for effective leadership rapidly shifts from “being in charge” to “being connected.” Executive power no longer comes from dominating the thinking or directing the work of others; it now comes from integrating the best of everyone’s ideas and leveraging mass collaboration platforms. In contrast to traditional hierarchies, which limit the interpersonal influence of the many through the ascription of authority, the power structures of digital-age companies amplify the opportunities for developing relationships across all people within an organizational network. The more connections there are, the quicker a business can access and leverage its collective intelligence.
In our hyper-connected world, power does not come from amassing control but from co-creating shared understanding. When co-creation rather than control is the fundamental way things get done, being in charge is meaningless because an effective, shared understanding can never be mandated. Shared understanding is something that must be facilitated and created by consensus.
The most significant leadership challenge for today’s corps of business leaders is shifting how they approach power. If they continue to insist that power is a function of being in charge, they are likely to fall victim to the consequences of a world that is changing much faster than their organizations. If they can accept that power in an increasingly networked world is a function of being connected, they and their organizations will become highly skilled in adapting to a rapidly changing world successfully.
To learn more about how innovative business leaders are shifting how they approach power, see my new book Nobody Is Smarter Than Everybody: Why Self-Managed Teams Make Better Decisions and Deliver Extraordinary Results.