Managers Can Boost Performance by Giving Others More Power, Boston Consulting Group Suggests

BOSTON, MA--(Marketwired - Sep 29, 2014) - Many managers dole out power very sparingly, believing the total quantity of power is fixed. They may want to revisit that view, as new bases of power are easily created, and often should be. The reason: if more people have more power, they are better able to solve problems. That can make the whole organization more agile, responsive and competitive.

This approach -- putting power into more hands -- is one of the messages of Six Simple Rules: How to Manage Complexity Without Getting Complicated (Harvard Business Review Press, 2014), a new book by Boston Consulting Group (BCG) senior partners Yves Morieux and Peter Tollman.

It shows how to go beyond the traditional management toolkit and instead embrace "smart simplicity," -- principles designed to make people more autonomous, cooperative and better able to solve problems, so that organizations become more competitive. Morieux and Tollman argue that autonomy and cooperation are essential if organizations are to respond effectively to the demands of an increasingly complex business environment. One way to enhance them is to increase the total quantity of power to then distribute it so that people can promote teamwork and better get their jobs done, the authors say. According to them, traditional empowerment is less effective because it ignores the production of power. Empowerment is just about shifting existing power; it is about allocating not creating power. With traditional empowerment, the power given to some (e.g. at the center) is inherently at the expense of others (e.g. managers in decentralized functions), who then cannot play the role they are supposed to play, thus creating endless pendulum swings instead of fueling new capabilities.

"Power is not a zero-sum game," Morieux explains. "Increasing the total quantity of power available in the organization allows managers to think about and act on more performance requirements. Power is to social systems what energy is to physical systems. Creating power can be a small matter -- it can happen on the front lines. But it can have a real impact on performance."

The authors point to the example of a retailer that tried to reverse a sharp decline in same-store sales by asking store managers to run localized promotions. But the managers had little control over staff, who reported to other departments -- and thus didn't listen to the managers or help with promotional activity. The retailer then gave the managers a new basis of power -- the ability to decide which staff members would work the emergency checkout lanes that opened when too many customers had to wait. Staff suddenly began cooperating with managers -- which meant they paid attention and helped out with promotional events. Same-store sales increased sharply as a result.

"That kind of change doesn't seem strategic at all," Tollman says. "But it was enough to persuade the staff to listen to the store managers -- who were then able to get them involved. And that helped jump-start sales."

The authors define power as "the possibility for one person to make a difference on issues or stakes that matter to someone else." A person in power can make someone else do something he or she wouldn't ordinarily have done. The authors warn that managers go astray when they buy into one or more myths about power:

• Myth: Power is the result of your position in a hierarchy. "No -- reporting lines are just formal conventions," Morieux says. "They don't automatically give you power over anyone else."
  
  
• Myth: Authority is equivalent to power. "Not true," says Tollman. "Authority gives you the legitimacy to exercise power. But that's not the same thing as having power itself. Authority can actually be held by people, like the store managers, who don't have very much power in the organization as a whole."
  
  
• Myth: Power is an attribute of individuals -- it comes from their leadership style. "Again, this is not true," Morieux explains. "Personal attributes and style may be ways to exercise power. But they don't determine whether an individual has power in the first place."
  
  

"Increase the total quantity of power" is one of the book's "six rules for smart simplicity" which aims to promote autonomy and cooperation -- qualities that are essential if organizations are to respond effectively to the demands of an increasingly complex business environment, the authors say.

According to Morieux and Tollman, giving people more power, like the other rules of "smart simplicity" starts with the reality of how people behave. "The basic approach of smart simplicity comes down to this," Tollman says. "Find out what your people are really doing in the organization; remember that whatever they are doing is rational -- for example, they are trying to protect their jobs or avoid punishment -- then give them rational reasons for doing what you need. They will help you identify and solve problems -- if you make it safe and rewarding for them to do so. "

For more information, or to schedule an interview with Yves Morieux or Peter Tollman, contact Frank Lentini, Sommerfield Communications at +1 (212) 255-8386 / Lentini@sommerfield.com.

About the Authors

Yves Morieux is a senior partner in the Washington, DC office of The Boston Consulting Group (BCG). He is a BCG Fellow and director of the BCG Institute for Organization.

Peter Tollman is a senior partner in BCG's Boston office. He leads BCG's People & Organization practice in North America.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.