You will probably have noticed that much of the phrasing above suggests personal ownership of assets or skills. This is true; however, the same also applies to groups of individuals or even entire organisations. The combined effect of their individual assets and skills can become far more than the sum of their parts. This is what we usually refer to as group or organisational power.
Common statements we hear about power include:
- “Marketing has the power to push that one through.”
- “How come Sales always seem to get what they want?”
Although much of this is related to the combined individual assets and skills, that is not the whole story. To a large extent, the sort of assets and skills which are valued within an organisation are determined by the strategy the board or executives set in response to the external environment and shareholder expectations.
Put simply, if the directors recognise that market share is going to be squeezed, they’ll turn the pressure up on the marketers to grab as much share as possible. Therefore, all eyes turn to those who are capable of growing the business’ top-line — and budgets are usually available for this. Alternatively, they may take the approach that they have to batten down the hatches and cut costs to retain the profit margins — in which case, those who are in command of the numbers, financial experts, MIS analysts and budget setters grow in power. This illustrates the concept of supply and demand.
The subject of group power will be picked up elsewhere when we consider informal groups and how they work.
Formal and Informal Power
Another distinction that needs to be drawn is the difference between the power that is formally distributed around the organisation and that which is acquired by individuals (very similar to personal power).
With a business, shareholders provide the executive team with a big bag of money and some ideas about the sort of business they want to create and an idea of what returns they expect. The team then decide on their strategy to deliver the expected return on investment and set about organising and managing the business. They create the departments they need, allocate money to them and recruit people to head them up. They give these heads the authority to make things happen within their departments. Each budget is then subdivided again to create teams and they then get on with the business. Of course this is oversimplified, but it’s a quick illustration of how the business formally starts to spread the power around the people and functions to get things moving.
As the business matures, it will realise it needs to put in place some checks and balances so it recruits a compliance manager and bestows on him/her a remit to make sure that everyone is compliant and, if not, the power to force compliance. Again, this is a simple example of how power is formally created for the good of the business. Of course, this is not always as controlled by the executive as they may like to think, and I’m sure most people have witnessed ‘empire builders’ collecting more and more departmental responsibilities. This is still an example of formal power.
However, this is very different from the informal power which usually takes the form of skills, capabilities and personalities. Qualifications and experience also fall into this category. The reason for drawing your attention to this is that if you want to become powerful, remember that formal assets are generally given to people and can be taken away again; whereas informal assets are built and owned by the individuals and placed at the disposal of the organisation. The point to note is that if you want to build a solid power base, make sure that you build informal as well as formal assets as a sound investment in your future success.