Managers and power

Nov 27 2006 by Robert Heller Print This Article

Every now and then journalists and writers get obsessed with identifying the most powerful woman or women managers. But what does 'power' actually mean? It can apply to force of personality, which is expected of chief executives of both genders. But forceful personalities might not have significant power in the normal sense of the word.

Powerful people get their own way more often than those without power. The true meaning of corporate power is in the importance of the company, rather than individual managers.

Fortune magazine labelled Carly Fiorina as "the most powerful woman in business" because she was the first female to be appointed CEO of one of the 20 largest companies in the US.

However, when you analyse Fiorina's actual performance at Hewlett-Packard, the most interesting aspect of her power is its limitations. Her main initiative was to secure the acquisition of a rival PC maker Compaq (which had quite recently taken over Digital Equipment).

The founding families were bitterly opposed to the deal, and a ferocious battle ensued in and out of the boardroom. Fiorina won the support of a narrow majority of the shareholders, but it turned out to be a Pyrrhic victory.

Walter Hewlett, the leader of the family opposition, could be proved absolutely right Compaq was a dubious purchase, and maybe should not have been contemplated. But the whole saga shows that ultimate power is that of ownership - hired hands, even if honoured with the title of chief executive, do not possess it.

In fact, the power of the CEO has always been conditional, the largest element by far in the complex network of influence and authority in which all managers participate and which gives each of them a measure of individual power.

Among these conditions is that all these holders of power have to justify their position by their performance, both in results and relationships in the eyes of their superiors and subordinates. The CEO is no exception, and rightly so.

One of the dissenters among the HP directors, Tom Perkins, said: "I probably am too easily bored with board process, and too preoccupied with customers, growth, market share and the bottom line."

Those words formed part of his response to a fierce attack on him by Fiorina. However, Perkins, a veteran and very successful Silicon Valley venture capitalist, hits the nail on the head.

Power rises towards the top, and as it does it becomes greater. So the way in which power is exercised has to be changed to match. The ultimate power of the CEO is making others take responsibility for every aspect of the organisation, while establishing a modus operandi that makes the boss completely confident that those responsibilities are being handled as effectively and timely as possible.

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About The Author

Robert Heller
Robert Heller

Robert Heller, who died aged 80 in August 2012, was Britain's most renowned and best-selling author on business management. Author of more than 50 books, he was the founding editor of Management Today and the Global Future Forum. About his latest title, The Fusion Manager, Sir John Harvey-Jones wrote: "The future lies with the thinking manager, and the thinking manager must read this book".

Older Comments

I was there at HP=Corvallis as we all saw this Caompaq acquistion take place and the uncomfortable feeling throughout the plant that we all felt about Fiorina and her Compaq venture into oblivion for HP.

It was apprent to me as a rank and file person there that we were sheep ready to be scattered by the coming whirwind Fiorina was going to allay on all of us.

She shed thousands of jobs to just make her point of getting Compaq in HP's stable of thoroughbreds, only to later realize this old horse (deal) was ready to be last out of the gate and late to finish. Fiorina was a spokesperson for the Republican Party for John McCain (imagine that) Then she blew it by saying something negative about Palin and her little house of cards tumbled just as her exit from HP. Power like this is displayed in all work places, psychologists have long well known that powerful people are hard to dissuade because of their positon and inability to listen to sound reason unless stroked just right to their own itching ears.