Power and other Needs

As I learned more about business, I came to realize that power did not equate to seniority. Indeed, the most senior people often worked under the most constraints. I found it was helpful to remember that when trying to understand why a leader took a particular action.

Power can be defined as the opportunity to make a difference. Note that it is an asset. It is like money, it is only useful when you spend it. And, just like money, many uses reduce the future potential. But if all we do is hoard power until we die, then, like money, we have really wasted our potential.

We can all make a difference, so we all have power. People in influential positions can make a bigger difference, they can impact more lives or leave a wider legacy. But along with opportunity comes constraints. And those with the greatest influence also need to work with more constraints.

Sometimes the constraints are obvious if we care to look and think. Take Barack Obama. He obviously has a lot of power. He can make a big difference. Reportedly, every Tuesday he uses some of his power to decide which foreigners to kill with drones.

We can use this example to understand more about power. Obviously, he has more power because he can create a bigger difference. But there are two challenges. One challenge is the constraints. He has to operate within US law, there are some concerns over international law, and there are other stakeholders who provide check and balance. These constraints are plainly good things in nearly all situations.

The other challenge is the impact of using the power (or not using it) on his future power. How he spends the power changes his future power. Many of the same actors are involved – congress, the Supreme Court, international partners and enemies. But there are also voters, journalists and lobbyists to consider. And, hopefully, the victims too, their families, and all the people his policy might influence.

This is an extreme example, but it applies to nearly all power. At work, I remember my first jobs. I couldn’t do much damage, and my influence was limited. But I did have some influence, and, usually, few constraints stopping me using it. If I followed some obvious rules, I was allowed to get on with things.

As I became more senior, the constraints mounted up. There were more stakeholders to consider, more trade offs to make, and I also had to think more about how much my political capital (power asset) might grow or diminish if I made particular moves.

One lesson is my favourite management philosophy, that of staying out of the way. Most of us would be far better managers if we learned not to get into the way, micromanage, over-supervise and require reporting of our staff. Delegation is part of this, but it is much more, it is a whole attitude to managing. If we can follow the principle, we can liberate ourselves, but also liberate our organization. Usually, they will surprise us in a positive direction. The same philosophy makes capitalism far more effective than communism, for all its faults. If you are a manger and you agree, print a big sheet of paper saying “Get out of the way” and stick it on your wall.

The other lesson is to remember that others have constraints, even though sometimes we can’t easily see them. If someone we respect does something that appears silly, most likely it is because there is a constraint we cannot see. A CEO has constraints, and only a few are easily seen. Understand this, and it will be easier to retain respect and sometimes to act yourself in such a way that you can achieve more.

There are always constraints. Putin has constraints. Xi has constraints. Even the pope has constraints. It is always good to remember this when trying to understand these people and make progress in relations. As soon as Nigel Farage looks like leading a party of power rather than progress, he will see constraints too.

Thinking of power reminded me of a model about needs that was popular in the last quarter of the last century, developed by David McClelland. Moving beyond the needs of Maslow, we develop more sophisticated needs. There is achievement, affiliation, and power, and most of us have one need much higher than the other two. People with high achievement need work well alone, and need goals and calculated risks and feedback. Those with need for affiliation like to belong in a group and be popular, like to collaborate and avoid risks. Those with power need like control, competition, recognition and status.

It is a nice model with clear implications. Achievement motivation is ideal in a subordinate but can be insufficient in a leader, while affiliation motivation can work in teams but rarely in leaders.

Unlike things like Myers Briggs, McClelland claimed that our needs came mainly from culture and environment. That implies that they can change over a lifetime. I wonder what my profile would be now. I remember doing an extensive test that included generating stories from pictures. One picture was of a business meeting, and I focused on a character to the side whom I read as bitter. Perhaps as a result, I was concluded to have high affiliation need, but something they called negative affiliation, for which a wise and rather creepy man offered me some counseling that I never took up. I recall that picture clearly, and I am sure I would write the same type of story again, so perhaps I still need counseling. Who knows?

I found it interesting to recall this model, and it has helped me re-evaluate some public and private characters. It might have helped me as a leader too, in being able to hit the right buttons in colleagues.

I wondered about retirement, and what that did to people of various needs. You could make an argument that retirement threatened all three of the types of need. Perhaps people with one high need are those most at risk from retirement, unless they can find an alternative way to meet that need, and maybe that would be a good way to counsel people about to retire.

Perhaps I’ll try to retake the test, because I really can’t guess which need type is strongest in me nowadays. I know I have some power need. It is why I like to conduct as well as to sing, and why I like to sing solos. Perhaps it is also a subconscious reason why I still blog, even though I claim not to care who reads it. When I was blogging at Shell, perhaps that was when I had greatest power – lots of opportunity, large scope, few constraints. No wonder I derived so much joy from it. It is similar to journalism, or perhaps being a theatre critic – they achieve little, often spurn affiliation, but enjoy power.

Nowadays we all have more opportunity than before, so everyone has more power. Tweets go viral and anyone can influence the whole world. We are also told repeatedly that we are only constrained by our own imaginations, that the American dream is available to all, and that we should aim high.

It is true that power is more widely dispersed. Perhaps total global achievement has increased too in our turbo-charged world, but surely not by as much as the expectations generated by our ambition. A consequence must be a growth in disappointment, as more of us fail to achieve our expectations. After all, what is an expectation but a pre-ordained disappointment?

I read recently that happiness is driven less by things like wealth and more by our sense of relative achievement against others and our own expectations. Whether our primary need is achievement, affiliation or power, it might be argued that humanity overall is doing more to destroy happiness than to create it. Perhaps digging up this old model is one way to turn that around. Though I would need to be power crazy to think that I could influence that!  

Thoughts from Sports

I love watching sports, and in most sports I follow a particular team and find that makes it more fun. I suppose it is a pretty inane thing, and people who don’t follow sports struggle to understand those of us that do. All I can say is it gives a rush of adrenaline and interest, and that the partisan side of it seems to be a net gain – when my teams win I feel great for days, while when they lose I convince myself it is just a game.

Living in the US is a great bonus for me. Sadly I get to see no cricket and little rugby, but that is more than compensated by the diet of soccer, all readily available at very convenient times for me. And I love most of the major US sports as well, so overall I can catch as much great sport as I like.

My favourite sport to watch is the Ryder Cup every two years. Watching regular golf is really dull, but the Ryder cup has great spice and tension. Like all great sport it always builds to an agonizingly slow climax and has many twists and turns. And my team nearly always wins!

So, looking for lessons for business and personal life, why is it that Europe wins despite having theoretically weaker golfers? This year’s captain, modest Paul McGinley, offers a few clues, gleaned from various interviews of team members. Europe’s captains have always been recent vice captains. There is great attention to detail and building spirit and partnerships. McGinley gave nearly everyone a well-timed rest during the event to have energy for the crucial singles. Most of all the team seems to want to win the cup just that little bit more than the US. In the past Europe has been able to motivate from its underdog status, but no more, and McGinley brought in Sir Alex Ferguson specifically to handle maintaining motivation when favourite to win.

I noticed one other factor. Everyone from Europe said they had come to do a job, to win the cup. Apart from playing with the rules and spirit of the game, nothing else mattered. Size of victory, personal legacy or contribution, recognition, or demonstrating things to the media had no role whatsoever. This single-minded pursuit of a goal can create a powerful internal team momentum, immune to outside distraction.

Team bonding, so a team can perform at a level greater than the sum of its parts, is a very delicate matter. Everyone must be fired up, aggressive but not so wild as to break the rules, with team accountability but without bullying. Personal determination must be huge, but ego subsumed to the team result. This is all very difficult, as demonstrated this week by the book of ex-England cricketer Kevin Pietersen.

Kevin must be a nightmare to work with. He has such huge talent that every team will want to accommodate him – just look at England’s test victories over the last ten years and note KP’s scores in those games – but he comes with an ego that is massive but frail. The bitterness in the book is tragic really for one with such gifts. Considering also Oscar Pistorius, one can only despair at what apartheid did to generations of young minds, as well as its more obvious tragic legacies.

Yet there is clearly a grain of truth in KP’s allegations. England seems to have a constructed a winning formula around a coach of military methods, a somewhat aloof captain, KP, and an inner gang of close buddies – Prior, Swann, Broad and Bresnan (with Anderson invited but neutral). All these elements contributed to team success, but all created baggage too, and it is no surprise that it all collapsed at once last winter. The bowler cabal is interesting as it reminds me a bit of the ethos of British public (private) schools. These all-male institutions are riddled with gossip, ritual humiliation and minor bullying. I was there myself, and I retain the capacity to inflict all of these things in certain circumstances to my great shame.

McGinley’s pursuit of a goal, including everyone on the inside and excluding everyone on the outside, seems a more sustainable model. Ferguson used this – though he himself was clearly an indispensible part, judging by what happened after he left. Mourinho has it sometimes, but cannot resist playing the media and thus separates himself from his team – note that his teams tend to perform even better for a time after he leaves them. Manchester City do not, and Yaya Toure seems to be heading into a KP situation quickly.

My favourite regular sport to watch is American Football (NFL), and Bill Bellichick and the New England Patriots have the internal winning drive there, leading to unprecedented sustained success. Bellichick treats the media with disdain while building unity within the club. Two weeks ago they lost a game very heavily. The media reaction was outrageous – we had a week of the team being written off as a spent force. Not surprisingly, last week they came out and won handsomely. A new player, Derelle Regis, who has succeeded at many teams, highlighted how the team had focused inwards and ignored such distractions.

Another way to succeed is to find an edge that no one else has discovered and build your system around it. It can take many years for others to catch up. Bellichick did this a couple of times, most recently with his use of two tight ends. The Seattle Seahawks may have this edge at the moment, as by far the youngest and lightest team in the league. In soccer, Barcelona and tiki-taka had such an edge for many years. Of course, eventually others learn to counter and copy, and then it may be hard for teams with an edge to move on – look at Spain in the recent world cup.

Major sports, especially NFL, have a massive influence on US society. There has been a spate of incidents of players abusing their partners or kids. This happens all the time, especially among the sort of communities that NFL players tend to come from, and is dealt with by the law of the land. But the NFL profile is such that it can change society. Once a video was released on one major player actually knocking out his then girlfriend in an elevator, all hell broke loose. The NFL, ever conscious of public opinion, starting banning these players for long periods. More startling, society suddenly woke up to domestic abuse as an issue and started campaigning for tougher laws. The NFL duly obliged and is supporting such campaigns. Change will result, if not in law then at least in awareness and acceptability. This is good change achieved via a dubious route. If you think about it, it does not reflect well on American society.

Statistics are big in all American sports, and generally I find them beneficial and adding to the entertainment on offer. There is the famous example of the Oakland baseball team creating an edge by using statistics. European sports are way behind – only recently does OPTA start to be used by coaches and journalists in soccer, far too late. On the BBC web page, some articles are well constructed using statistics (Robbie Savage for example) while others remain in the dark ages (Phil McNulty).

A bad example was the recent Ryder Cup. The BBC offered player ratings based on their results and some gut feel. Even the result analysis always contains a major flaw, in that singles points should count double (since a point in earlier rounds is essentially shared with a partner). I also spent hour an hour looking at scores by hole for the players. Whereas the BBC lauded Spieth and damned Mahan and Kuchar, I could work out quickly that the latter two had played as well as anyone on the US side while Spieth’s relative hole scores were the worst of anyone. True, that is only one factor in match play, but it is not irrelevant either.

Baseball especially is obsessed with statistics. I love baseball, it has the same slow build up of tension as test cricket and the same depth as well. But, just as cricket was blindsided by Kerry Packer and is still in a mess over the IPL, baseball runs the risk of losing its public from being too slow. People want faster action nowadays, and a playoff game last weekend than ran to six hours while yielding only three runs was hardly an advert for the game except to purists. Yet baseball refuses to change, and one reason is statistics. They have unbroken statistical records in countless categories, that would become invalidated by major changes such as shorter games. Statistics can be a curse as well as a blessing.

Playing and watching sports can offer lots of excitement as well as some lessons. Finding a winning team ethos and an edge matters as much in business as in sports, as does learning how to handle mavericks and smart use of data. There are other lessons too, for example about diversity, and I’ll return to the subject soon to explore those.

Muddling through

Last week I suggested that there are times when it is better not to address issues but to let sleeping dogs lie. My favourite example is a situation where you don’t get on well with your boss. The delicate balance of power and risk means that an intervention will often make things worse rather than better.

One reason why I recommend patience in that situation is that time often heals the issue on its own. One of you will move job, or there may be a general reorganization. The problem will eventually go away in most cases.

I also suggested caution when dealing with an issue with your life partner. Here, the problem won’t go away on its own, unless one of you decides to give up on the relationship. But it is still risky to act, because you can’t put the genie back in the bottle, and any intervention is sure to have consequences. The choice is whether to accept those consequences or whether muddling through is good enough for you. Think before you act in those situations.

Muddling through is what most of us choose to do, most of the time. Where we delude ourselves is that things will improve without intervention. We might think we can change our partner subtly, or that some other change such as a job move, house move or new child might somehow work to our mutual benefit. In all probability it won’t. Sores do not often heal on their own, they take careful intervention followed by compromise and hard work.

So what it takes is a careful calculation. Can the intervention make things better? Might it make things worse? Without intervention, are things likely to improve or get worse? Might the problem solve itself? Is the status quo more agreeable than dealing with a failed intervention?

Companies face the same dilemma and leaders have to weigh the consequences carefully. There is a strong school nowadays that argues that constant change is the new normal and an imperative for success. I disagree. Some of us like change and some of us don’t, but all change has consequences, and many of these carry severe risks.

A key risk is distraction. During reorganisation and change processes, staff are focused inwards. They are thinking about their own jobs and trying to work with new colleagues and processes. The customer can get forgotten, and the competition can take advantage. Add in the fact that inevitably targets are ill-defined during change, and underperformance is likely to follow. This is even worse during acquisitions.

But stability brings its own risks. In my experience, costs tend to creep up when there are periods without reorganization. Few companies seem to be able to keep a constant gentle pressure on costs. People have ideas that require investment, and everyone tries to build their empire and career. Departments get slightly larger each year.

The result is often a cycle of reorganisation every five years or so. Perhaps it is no coincidence that CEO tenures tend to last about five years. Perhaps it is also the time that excessive promises to market investors can no longer appear sustainable.

Then there are changes of strategy. Key here is to understand key trends. If a company is in a fast moving market like mobile devices, it cannot afford to stand still for long. Look at Blackberry. Both Samsung and Apple look vulnerable now. Google seems to go the other way, lurching after every opportunity – I am not optimistic for them, even though their core business looks strong for many more years. Amazon has followed a consistent strategy from the start, and, because it is still supported by key trends, maybe the strongest of the lot going forwards.

In other industries, stability can bring rewards for an extended period. Look at Exxon. I made a mistake with Tesco, missing that their star would fall. The problem is the positioning of their asset base, in over-sized out of town locations which no longer meet the market trend. I should have seen that coming.

With politics, change often costs votes, so smart leaders undertake the tough reforms early in their tenure. On balance, David Cameron did this well. Narendra Modi seems to be missing a generational opportunity in India.

It is no surprise that many leaders follow a muddling through strategy. When asked what his biggest problem was, Harold MacMillan answered “Events” – in other words dealing with stuff from left field, and implying that the regular business should be as minimal as he could get away with.

But muddling through carries long-term costs. Over time, institutions and policies drift out of line from where they need to be. As people live longer, health care becomes unaffordable unless constantly subject to tough reform.

But look at the crippling political capital a modest health care reform cost President Obama, and you can see why most just muddle through. In his new book, Francis Fukuyama describes a new political reality he calls a vetocracy. He believes that change has become all but impossible in the US now. Meanwhile, not just healthcare, but also welfare, the tax landscape, inequality, environmental policy and many other areas become ever more unfit for purpose. In the end, muddling through can lead to crisis.

There are two other excellent examples in Europe. One is the democratic deficit in the EU. First, elites implement policies without consulting people following their interpretation of what is best for Europe. The policies are generally sound. But slowly it becomes impossible to make a positive case for the policies, and opportunists build opposition. It becomes impossible to reform and the bunker gets deeper and deeper. In the end the institution itself is threatened.

The institutional framework of the UK is another example, made current by the fallout from the Scottish referendum, and elegantly described in the Economist this week. The four constituent parts have led to a series of ugly fudges that now look hopelessly unjust and untenable. As an example, Scottish MP’s can vote on purely English matters while English MP’s cannot vote on Scottish ones, yet there are more Scottish MP’s per head of population than English ones.

But a discussion of the options to unpick the mess shows how this will be next to impossible, since some interest group or another will not accept each possible change and an overall settlement is politically out of reach. Here, Cameron has done less well, for he torpedoed some sensible changes proposed by Nick Clegg early in his term on cynical political grounds. That decision has come home to roost, and will stymie governments for at least another generation.

So what are the lessons from all this? Intervening will often make matters worse, yet muddling through can be unsustainable.

As an individual, we need to choose our battles carefully, judging the potential risks of intervention with the likelihood that a situation will improve of its own volition. As an investor or company leader, it is really the same thing, with the key market trends being the determining factor – in a fast moving environment and one where our legacy is moving against trends, we need to change more quickly than is comfortable or risk irrelevance.

As a national leader it is much the same. Chances to reform are few and far between, so need to be grabbed boldly when they arise. Well done John Key in New Zealand, who has just won a third term and has seen a unique moment to define part of his legacy by changing the national flag, and wasting no time in getting on with it.

Fukuyama despairs of US politics and US prospects as a consequence, and joins the growing ranks of commentators openly questioning the superiority of democracy over a system like China’s. I retain a bit more faith in democracy, especially as our young become better educated and informed, and as technology can speed decision-making. But it would be a brave man who would bet that in thirty years time we will still have a UK, an EU and a world-leading US. By then, muddling through might have reached its limits in all those cases.