Is Long Range Planning Still Relevant?

In today’s rapidly changing business environment, some argue conventional long range planning may no longer be relevant.

As background, here are the elements of a traditional strategic plan1:

  1. Mission – why you do what you do
  2. Vision – where do you want to be
  3. Core values – what guides you
  4. Driving Force – What is the nature of the products, services, customers, market segments and geographic areas that a company chooses to pursue?  What is it now?  Should it change?
  5. Strategic analysis
  6. The Five Forces2 – suppliers, customers, threat of substitutes (technology), ease of entry (potential entrants)
  7. SWOT – Strengths, Weaknesses, Opportunities and Threats
  8. Analysis of competitors SWOT
  9. Competitive advantage
  10. What should we continue, what should we change?
  11. Operating Plans & KPI’s (Key Performance Indicators)
  12. Budget, both capital and operating
  13. Balanced Scorecard – Finance, Internal Processes, Learning & Growth, Customer Satisfaction

Among those challenging traditional strategic planning is Clayton Christensen.  In his book, The Innovator’s Dilemma3, he questions traditional concepts of strategic planning in an environment populated by increasingly innovative and agile competitors.  His focus is on large companies who historically are not good at being agile and innovative and therefore lack the ability to respond to small, entrepreneurial, innovative competitors.

Rita Gunther McGrath, in her new book, The End of Competitive Advantage4, makes a frontal attack on accepted strategic planning methods designed, in her opinion, for another time. These are methods based on the presumption that competitive advantage is sustainable.

McGrath believes that the best one can hope for is “transient competitive advantage.”  Her prescription for achieving transient competitive advantage includes smaller, faster, more agile organizations where “management-by-consensus” is a thing of the past. Her emphasis is on marshalling rather than owning assets, including talent. To ensure the appropriate deployment of these assets from one opportunity to the next, it is necessary to recentralize control over the resource allocation process, moving it out of strategic business units (SBUs). This raises the question as to the relevancy of SBUs and suggests that they be replaced by transient teams as a primary form of organization.  They engage in a continuous process of creating and testing options, doing things fast and “roughly right” rather than relying on traditional strategic planning methods.

Like Christensen, McGrath’s message is aimed at large, historically slow moving companies.  So as a TEC member, is strategic planning still relevant to you?  What do you think?

Some closing thoughts:

  • “Strategic Planning is the single most important function of the CEO”, Patrick Below
  • “I have always found that plans are useless, but planning is indispensable.”, Dwight D. Eisenhower
  • “If you don’t know where you are going, any road will take you there”, Lewis Carroll

Click here to read more on this subject.  ( http://hbswk.hbs.edu/item/7341.html )

1”The Executive Guide to Strategic Planning”, by Patrick J. Below

2”Competitive Strategy”, by Michael E. Porter

3Clayton M. Christensen, The Innovator’s Dilemma (Boston: Harvard Business School Press, 1997)

4Rita Gunther McGrath, The End of Competitive Strategy: How to Keep Your Strategy Moving as Fast as Your Business, (Boston: Harvard Business Review Press, 2013)

Listen Up, CEO’s! It’s That Time of Year . . .

It’s That Time of Year…

It’s coming to that time of year when things begin to slow down. Current prospects become unavailable.  More time is spent finding Christmas presents and decorations. Generally, many people begin slipping out of high gear. By the time we reach the week between Christmas and New Year’s we are almost in “PARK”.

So, wrap up whatever year-end business you can, make some plans and set your goals for next year. AND do what so many of us fail to do the remainder of the year. This is a great time to PROSPECT and CULTIVATE. You’ve been running at full speed most of the year (except, maybe, for that one week vacation you squeeeezed in).

Go back and review those prospects that fell off the radar in the first three quarters of the year. Look at those names. They seemed promising at one time. What happened? Why didn’t you sell them? Should some of them be renewed? Maybe it’s time to go back to your referral source and see what they know. If you lost an order, check back and see if the prospect is happy with their purchase of a competitor’s product or service. Last year you promised yourself you would be more active in your prospecting. Reach out to referral sources, set up a few coffee meetings, reconnect with past customers, maybe attend a networking event, or two.  Drop off some Christmas cookies.

Look at your current customer list; those people that you’ve done business with since the first of the year. Is it time to for a follow up phone call, or personal call. CULTIVATE that relationship. Ask for a referral or reference. Are they happy customers? Is there something a simple phone call will do to further enhance your relationship? Is there another problem you can solve?  Don’t just be another Christmas card hanging in their lobby.

Prospecting and Cultivating are very important aspects of selling. If you don’t PROSPECT you will have trouble finding customers. If you don’t CULTIVATE your competition may sneak into the account while you are not paying attention.  It’s that time of year to spread a little cheer. Be merry and cheerful.

We wish you a Merry Christmas and Successful New Year!

Organization and Staffing – Ground Rule #3

This is the tenth in a series of posts that will describe what the CEO of the Reliance Electric Company thought about basic commitments, how the organization was going to operate and ground rules for managers. Once again, all the content of this article is based on the work of B. Charles Ames as outlined in his management manifesto titled Basic Management Concepts dated January 14, 1974.

Organization and Staffing – Ground Rule #3

“Every manager should have a backup person who is potentially better qualified for the manager’s job than the manager is himself.” CEOs of smaller firms balk at this one. They claim they do not have the layers of staffing and over-staffing that would allow this redundancy. Ames would disagree.

As he points out, this potentially better qualified backup ground rule does not necessarily mean that the manager’s staff should be expanded. It does mean that people in the organization who do not have the qualifications or potential should be weeded out and replaced with people that have real ability and potential. Further, if the manager determines that he or she does not have anyone in the organization that had the potential to be such a contributor, that manager was to make it a “top priority” to recruit, select and hire an individual that did.

CEOs like Ames did not use terms like “top priority” without careful consideration. He believed that ensuring this backup capacity was critical to the long term health of the organization.

Reliance Electric was developing leaders who could step up to the next rung on the management ladder. Without a logical successor in place, good managers could not move up and accept greater leadership roles.  They were stuck in their current position by their own failure to have a clearly visible, logical successor in place at all times. Ames cautioned that no manager had the right to feel good about his or her performance until Ground Rule #3 was satisfied.

  1. Chuck Ames and his wife Jay currently manage the Ames Family Foundation.  They divide their time between a home in Vero Beach, Florida and a second home in a suburb of Cleveland.  

Organization and Staffing – Ground Rule #2

This is the ninth in a series of posts that will describe what the CEO of the Reliance Electric Company thought about basic commitments, how the organization was going to operate and ground rules for managers. Once again, all the content of this article is based on the work of B. Charles Ames as outlined in his management manifesto titled Basic Management Concepts dated January 14, 1974.

Organization and Staffing – Ground Rule #2

“No manager can afford to fill first level management positions with people who are not going anywhere.”  Just let that one sink in for a while.  How many times have you seen a reasonably competent contributor promoted to a first line supervisory role, only to become toxic in a management position?  If he were writing today, Ames might have said something like don’t allow the Peter Principle to enter your organization.  That is, a “hierarchy where every employee tends to rise to their level of incompetence.”  It starts with first line supervisors.

Ames cautioned that the management pyramid in any organization narrows quite quickly as you move up the hierarchy.  Allowing marginal performers in first line supervisory positions limits the opportunities available to more talented individuals.  At the shop floor level it is also a leading cause of labor problems and unionization.

Look at first level management positions as a proving ground…a proving ground that tests first time managers. Consider the first management position a proving ground that provides experience for people with high potential.  Make it a proving ground for people who appear to have the capability to grow.  Or, in terms of the Peter Principle, select candidates based on their potential performance for a future role rather than their performance in their current (first line supervisory) position.

Turnover in these first line management positions is only a problem if it too low.  It is weed or feed time, right now.  The entire organization will become bogged down by B Players “clogging the first step of the management ladder.”  If you have experienced B Players in first line management positions, you have experienced mediocrity.  Good people become frustrated.  A Players quit.  A Players go to a competitor or another organization where they are given the opportunity to prove themselves.

First line management positions are the proving ground for developing great people.

Chuck Ames and his wife Jay currently manage the Ames Family Foundation.  They divide their time between a home in Vero Beach, Florida and a second home in a suburb of Cleveland.  

 

Generation X: Another Look

Generation X: Another Look

Much has been written about the characteristics of members of the workplace generations that make up our workforce.

  • The Radio Generation born before 1945 and now mostly retired
  • The Baby Boomers born between 1945 and 1964 numbering some 75 million or 45% of the workforce, many of whom are beginning to retire now at a rate of three million per year
  • Generation X born between 1964 and 1977 with 45 million members or about 22% of the workforce
  • Generation Y (also called Millennials or Echo Boomers) born after 1977 with 76 million of workforce age.

While I do not agree that we can firmly attach characteristics to all the members of one of these generations, I will concede that there are some central tendencies that have statistical significance.  These may have resulted from events that were occurring during the members’ formative years.

For example, Gen-Xers were “latch-key” kids either with both parents working or raised in single-parent homes3.  They grew up in the shadow of the Cold War, experienced the collapse of the Soviet Union, the outbreak of AIDS and the commercialization of subcultures on MTV.  While these events impacted different people in different ways, on average, Gen-Xers became well educated, technology literate and tend to be highly independent, often choosing to work alone rather than in groups.  They have a strong work ethic while seeking balance with family and lifestyle.  This leads to the desire for workplace flexibility1.  Furthermore, “they represent the largest group of entrepreneurs in history.”1

Now in the 30’s and 40’s, Gen-Xers represent the “bench strength” of management.

They are approaching their prime earning years and are in a position to accept leadership roles.

Now the reader will note that with 75 million Boomers heading towards retirement and only 45 million Gen-Xers coming along behind, there is a deficit of 30 million that must be overcome.  As the economy continues to improve, albeit slowly, Gen-Xers will have the opportunity to become increasingly mobile as new employment opportunities become available to them.

This may be good news for Gen-Xers, placing them in high demand.  But this should be of significant concern to business owners and CEOs who need to retain the skills, talents and experience of these employees.

Additionally, surveys support the notion that many Gen-Xers are seeking new challenges.  A 2011 survey from the Center for Talent Innovation showed that 37% of Gen-Xers said they were looking to leave their current employer within three years2.  Another study by the U.S. Department of Labor found the “quit rate” of this group, which measures the number of people that voluntarily leave, is now the highest since the beginning of the 2008 recession2. While still another study suggests the one in five Gen-Xers are preparing to leave their current jobs3.

So what can business owners and CEOs do to counter these trends?  Below are some suggestions gleaned from the three reference articles listed at the end of this blog.

  1. Because Gen-Xers on average tend to be creative, productive and independent, give them a clearly defined task and let them work on it with little oversight1.  Don’t dictate to them, but allow them to brainstorm options with you. Seek their feedback on the right course of action to take3 – take a collaborative approach with them.
  2. When they show they are ready, give Gen-Xers a chance to be in charge by having them head a high visibility project to spot light their abilities2.
  3. Encourage their entrepreneurial instincts when possible by letting them “test their wings” in a company-sponsored new venture2.
  4. Offer the flexibility that Gen-Xers desire to help them achieve the work-life balance they seek2.  They are highly proficient with e-mail, SMS messaging (texting), Skype calling, blogs, forums and virtual workrooms.  These tools allow them to be productive without always having a physical presence in the office to collaborate, solve problems or create products and services1.
  5. Offer variety through opportunities to learn new skills, cross train, work on projects in other departments and continuing education3.
  6. Take the initiative as well as encourage your senior managers to mentor the best and brightest of your Gen-Xers. Show them a route for them to reach a top job when it’s time2.
  7. When teams are necessary to perform a project, encourage the members to self-manage3.  You want your Gen-Xers to stay with you because of their expertise, so let them put that expertise to work in an environment of open communication and trust, where open debate is encouraged and opposing opinions are discussed in a critical yet caring way.
  8. Both Gen-Xers and Gen-Yers seek frequent feedback3.  So create an environment of rapid feedback, giving praise where deserved and corrective suggestion when warranted.

Gen-Xers, for the reasons discussed here, are and will be leaving big corporations to join smaller companies, even if it means a pay cut. This should be good news for those smaller companies who seek to attract new talent and are Gen-X friendly.

References:

1 “Understanding Generation X and Y Employees” by Tim Shaver, Vistage Chair

2 “4 Ways to Retain Gen Xers”, by Sylvia Ann Hewlett, HBR Blog Network

3 “Create a Gen-X Friendly Workplace to Retain Key Talent” by Deanne DeMarco, www.Reliableplant.com

Are You an Effective Leader? | Traits of a Great Leader

The Harvard Business Review Group on LinkedIn recently polled its members asking “What is the single most important quality for a leader to have?” The respondents to this poll were managers from various organizations at various levels. It is my opinion that the unspoken yet understood part of the question was “What is the most important quality that you would like to see in your leader?”

Here are the top six responses:

  • Integrity. An uncompromising and predictably consistent commitment to honor moral and ethical values through both words and actions.
  • Visionary. Having clear ideas about what the future should look like and what should happen or be done to achieve it.
  • Honesty. The quality of being fair and truthful, closely related to integrity
  • Trust. Confidence from others that your intentions are good and clear.  It centers on behavior that is predictable.  It requires vulnerability with the confidence that this will not be used against you by the persons who have your trust and in turn who you trust.
  • Humility. The skill espoused by maintaining pride about who you are without arrogance while at the same time seeking ideas and advice from others.
  • Communication Skills. The ability to clearly exchange of ideas, feelings, intentions, attitudes, expectations, perceptions and direction through speech, gestures, behavior and writings.   The operative word is “exchange”.  A good communicator has the ability to not only clearly express themselves to others, but be able to listen and absorb ideas from others.

Other contributions to the poll included courage, strength, emotional intelligence, self confidence, character, caring, compassion, intuition, ability to relate, passion, perception, patience, creativity, authenticity, reliability, consistency, credibility, vulnerability, ability to make the right decisions and charisma.  I note that many but not all of these characteristics are embodied in the top six.

Patrick Lencioni is the author of “The Five Dysfunctions of a Team” and “The Advantage” and seven other books.  In “The Advantage”, Lencioni presents the case for Organizational Health, which he believes is the single greatest advantage an organization can achieve.  He characterizes healthy organizations as those that possess:

  • Minimal politics
  • Minimal confusion
  • High morale
  • High productivity
  • Low turnover

To accomplish this, the organization’s leader must:

  1. Build a Cohesive Team
  2. Create, Over Communicate and Reinforce Clarity

And to build a cohesive team, the leader must:

  1. Develop trust by first risk demonstrating vulnerability so the team members will feel comfortable taking the same risk themselves.
  2. Overcome fear of conflict by encouraging passionate debate of the issues while avoiding hurting the feelings of the team members.
  3. Gain commitment without yielding to “analysis paralysis”.  This requires risk taking and making decisions without perfect information plus recognition and understanding that sometimes a decision will ultimately turn out to be wrong.  When this happens in a healthy organization, the team eagerly readdresses the issue to make a correction.  It should be a rare occurrence that the team reaches an impasse requiring the leader to be the ultimate arbitrator.
  4. Team accountability, that is, team members holding one another accountable.  The leader must encourage and allow the team to serve as the first and primary mechanism for accountability and not fall into the trap of taking on this function themselves. Focus on collective results of the group rather than personal goals of the members.  The leader must set the example here for if the team sees the leader pursuing personal goals at the expense of those of the group, the team members will take this as permission to do the same.

Jim Collins in his seminal work “Good to Great” draws basically the same conclusion using different words and methodology.  He describes leadership as a hierarchy consisting of five levels.  First, the leader must be a highly capable individual, a contributing team member and a competent manager able to “organize people and resources toward the effective and efficient pursuit of predetermined objectives.”  To reach the Level Four, who Collins describes as “Effective Leaders”, managers must have a clear and compelling vision and be able to “catalyze commitment” to that vision. Top or Level 5 Leaders are further characterized as individuals “who blend extreme personal humility with intense professional will”. Building a successful company overshadows their personal egos.  They are incredibly ambitious “but their ambition is first and foremost for the institution, not themselves”.

These three views of leaders and leadership suggest a remarkable consistency in thinking among those who have attempted to describe what makes a great leader.

Ground Rules for Managers

This is the seventh in a series of posts that will describe what the CEO of Reliance Electric thought about basic commitments, how the organization was going to operate and ground rules for managers. Once again, all the content of this article is based on the work of B. Charles Ames as outlined in his management manifesto titled Basic Management Concepts dated January 14, 1974.

Ground Rules for Managers

Ames believed there were a few ground rules that managers needed to follow. The ground rules were not controversial. The difficulty came when following them because, occasionally, they required managers to make difficult decisions and take unpleasant actions. Ames felt strongly that successful managers needed to follow the ground rules. The alternative would be failure, regardless of how smart or well-trained the manager might be.

  1. Organization and staffing. Managers determine how many people are required to accomplish the objectives of the organization. They decide on the kinds of people needed.  They divide tasks among them.
  2. Planning and execution. Managers determine specifically what needs to be done.  They decide how it will be accomplished. They follow up to make sure that each individual understands his or her role. They insure that people do what is expected of them.
  3. People development. Managers determine and carry out actions necessary to insure the continuous upgrading of people skills in the organization. They bring in new people to perpetuate and upgrade the strengths of the organization.

Ames understood that a variety of activities would fall under these core responsibilities. He also knew they would vary in importance for individual situations. He stated, however, that these three responsibilities were always the core of the manager’s job. The ground rules were inviolate for managing people and tasks to accomplish the objectives of the organization.

Ames went on the detail “ground rules” for each of the three core responsibilities. These detailed ground rules will be covered in the next installment of the recap of Basic Management Concepts.

B. Chuck Ames and his wife Jay currently manage the Ames Family Foundation. They divide their time between a home in Vero Beach, Florida and a second home in a suburb of Cleveland.  

The Role of Emotions in Effective Negotiations

The books that I have read on the subject of negotiation generally present the simple view that a negotiation is a cold, rational transaction usually between two parties. If the “price”, (which almost always involves more than just dollars) is right as viewed by both parties, the deal gets done.

Similarly, when I was in business school, negotiation was presented as a straightforward economic analysis. If we assumed the other side was acting rationally in trying to maximize its position, the goal was to figure out how to respond in various scenarios to maximize one’s own value. Subtleties may involve finding those elements that are of more value to the other side than to you, thus breaking somewhat the idea that negotiation is strictly a zero sum game.

Anyone who has bought a car or sold a house knows that negotiations are rarely so dispassionate. “As soon as the checkbook comes out, a flood of emotions comes out too – fear, anxiety, competitiveness, anger, annoyance – all of which can influence what each side is willing to accept.”

Michael Blanding writes for “Working Knowledge” published by the Harvard Business School. In his article in the June 30, 2014 edition titled “The Role of Emotions in Effective Negotiations”, Mr. Blanding reports on research done by Andy Wasynczuk, Senior Lecturer of Business Administration at Harvard Business School, that began in the ’90s. What Wasynczuk found was that negotiators rarely act rationally. Instead, negotiators often take into account what they felt they deserved from the other side, and what they can do to save face when they didn’t get it.

In his new teaching note, Emotions in Negotiations: An Introduction, Wasynczuk and his coauthor Colleen Kaftan, trace the history, theory, and research on how emotions can affect transactions between parties.

Wasynczuk found that even newly minted Harvard MBAs feel like they are ill-equipped even for their own personal negotiations like dealing with a landlord or buying a car—let alone the business situations they will be getting into in the workplace.  So rather that deal with abstract business negotiations, Wasynczuk uses everyday examples to illustrate how negotiation skills can be improved.

Wasynczuk teaches both about what we need to do to manage our own emotions based on the other side’s behavior, and what emotions we elicit in others based on our own behavior. The key he says is that a good negotiator needs to have an explicit understanding about the emotions that each side are experiencing and to be intuitive about the process.

Wasynczuk learned these techniques while he served for 15 years as chief operating officer for the New England Patriots, where he was in charge of negotiating high-stakes player contracts involving millions of dollars.

He intuitively understood that emotions were an important factor in dealing with athletes who are generally passionate people. “The last thing I wanted to do was create an excuse for a player or agent to get angry. That would create a power struggle, which was a recipe for disaster.”

Wasynczuk learned to enter into contract talks with a smile—and to rationalize away his own anger when a deal couldn’t be struck. “If an agent was being greedy with me, they were probably being greedy with other teams as well,” he told himself. “If the other team ended up paying that money they were making a mistake.”

Take this simple exercise: Player A is given $20 and has to decide how much to share with Player B. Player B’s only decision is to decide whether or not to accept what is offered. If accepted, Player B receives the offered amount and Player A gets to keep the balance. But if declined, both players end up with nothing. Rationally, B should take any offer—even as little as $1—that’s more than nothing. And yet, whenever this experiment is performed, B consistently rejects the money unless it is at least a quarter of the total—$5.

“There is a very strong emotional response to the lack of fairness, irrespective of the right rational decision,” says Wasynczuk. “The more we understand how people behave based on emotions, the more thoughtful and appropriate we can be in how we respond to them.”

As an example, anger can be the most destructive emotion during negotiation—often causing deal making to break down as each side sacrifices its needs in order to save face. “It tends to start rising on both sides, and inevitably there is a point where it erupts,” says Wasynczuk. People will walk away knowing that they left value on the table, but they don’t care.

On the other hand, anger isn’t always a bad variable in negotiation. Deployed the right way, it can demonstrate passion and conviction that can help sway the other side to accept less. The trick is to direct the anger at the situation or problem—not the person on the other side of the table.

Research has found that entering negotiations with a positive attitude tends to lead to better outcomes—when both sides are agreeable and conciliatory, it builds a level of trust that can lead to information sharing that allows both sides to get a better deal. Yet happiness can be dangerous as well, since happy negotiators tend to accept less than they might otherwise be able to get.

No matter what emotions are present at the bargaining table, a smart negotiator first becomes aware of what they are—and then works to emphasize the positive emotions that can help the deal while downplaying the negative emotions that might scuttle a deal. This “emotional intelligence” may take the form of altering body language or tone of voice to influence the way the other person responds—or taking a break during a difficult point in negotiations in order to regain composure when anger starts flaring.

In summary, “Emotions are an expression of how people are processing information, and can give a strong signal of how the mind is internalizing the discussion.”

Emotions are powerful; not only in derailing a negotiation, but also in helping both sides come to better agreement.

Managed well, emotions “can turn a frustrating negotiation into one that is pleasant, productive, and even enjoyable.”

Click here to view the full article

 

 

 

 

 

How to Relieve the CEO of Their “Sales Manager” Role

Sales Manager as Player/Coach

We often encounter small to medium sized companies that have grown to the point that they need a sales manager. The President has filled the role and now finds himself unable to effectively run his company AND manage the sales force. He’s frustrated and is looking for a quick solution.

So, the search begins to find his perfect replacement, or as my recruiter friends refer to it; “the purple squirrel”.  The job description includes a laundry list of management responsibilities like recruiting and hiring salespeople, creating sales plans, training and coaching and even P&L responsibility.  After all, the President is trying to shed the time and energy spent managing the sales team.  Then, almost as an afterthought is the final item on the job description.  It reads something along the lines of “maintain an active book of business” or “meet or exceed annual personal sales goals”.

More often than not, the hiring requirements for the job are built around industry experience, product knowledge, proven success hitting performance goals, etc.  All of these are sales related without a mention of management skills. This is catastrophe waiting to happen.

The combination of a successful manager and high performing salesperson is almost impossible to find.  Hence the name “purple squirrel” More often than not, the hire ends up being a disappointment.

Problems on the management side of the equation include frustration with the lack of coordination with other departments, rising sales department costs, lack of sales training and poor hiring decisions.  If a strong manager is put in place, we hear complaints about customers being ignored, disappointing sales growth, and losing market share to competition.

Our world is more competitive and more fragmented.  It’s time to reconsider the idea of a producer sales manager. Up and coming companies have changed their thinking and now look for successful managers to lead sales teams.  Conversely, selling is a full time job.  Meeting sales objectives should not be relegated to part time status.  Attempting to combine selling and management in one role ultimately results in both functions performing at sub-par levels.

There’s a reason championship teams no longer have player/coaches.

How to Be an Effective Group Leader

Why Dominating Leaders Kill Teams

Dominating leaders tend to stifle creative ideas that might otherwise emerge from group discussions thus making the teams less productive.

Francesca Gino is an Associate Professor in the Negotiations, Organizations, and Markets Unit at Harvard Business School.  In the November 13, 2013 edition for “Working Knowledge” published by the Harvard Business School, Michael Blanding discusses Professor Gino’s series of studies in which she and her colleagues, Leigh Plunkett Tost of the University of Michigan and Richard P. Larrick of Duke University found that when leaders are focused on their own sense of power, they can hurt the performance of their teams—but with an important catch. The effects only occur when leaders are actually in a position of power.

Usually when we think about groups, we think that a strong leader naturally improves the functioning of the team. Professors Gino, Tost and Larrick explore this in depth in their article “When Power Makes Others Speechless: The Negative Impact of Leader Power on Team Performance”. In their work they differentiate between a “subjective sense of power,” that is, when someone thinks they have control over others, and actual power, when someone has formal authority over compensation, promotions, how resources are allocated or how decisions are made. Actual power and as sense of power often go hand in hand, but not always.

Sometimes in a group situation without a formal leader, a leadership role can be assumed by a person who believes he or she has superior knowledge or skills. The researchers found that in cases when someone felt powerful but was not recognized as being in a position of authority, team members were able to override that person’s domination of the conversation and add their own input.

As I would expect, they found that in the best performing groups, the leader orchestrates the conversation, and gets everyone talking. In other words, strong leaders can and do improve team performance when they go into a situation with a sense of humility about their own relative power.

On the other end of the spectrum, poor performing teams were dominated by a leader who made his power known, controlling the conversation and stifling input from the non-leader members of the group.

In conclusion, Professors Gino, Tost and Larrick suggest there is a powerful opportunity to improve performance just by making leaders aware of the dangers of hogging airtime in a discussion.

“I want to believe that oftentimes we behave the way we do because we are not aware of the effects of our actions,” says Gino. “Bringing this type of awareness to leaders walking into group decision-making situations could set up a different process whereby they benefit from what others have to offer.”

They further conclude that being aware of the negative effects generated by an overpowering leader can make non-leaders feel more empowered to assert their own point of view—whether or not the person dominating the conversation is a formal leader.  I believe that this requires the non-leaders to trust that the leader with power will not exercise that power against them.

It is no surprise to me that getting leaders to listen to others and to facilitate a productive group discussion is powerful indeed.

Read the complete article, here.