Innovation hinges on the power to take decisions

Why do the best laid strategic plans so often fail to be realised? Not because they lack sense or merit. What they lack is the muscle to implement them. Tales abound about companies which did not capitalise on their own innovations, because political support was not forthcoming. Sad lessons are Xerox's early abortive invention of the computer, or IBM's development of the PC. In both cases, political attention in the company was firmly concentrated on the traditional business.

On the other hand, proposals whose merit is dubious often get implemented because they are backed by powerful people. A glaring example is the disastrous acquisition of Rover cars by BMW, because the then leader of the company, Bernd Pischetsrieder espoused the idea.

Managers spend much time and energy on analysis of information, and their training is based largely on decision tools and procedures. Unfortunately, this training lays less emphasis on implementing those same decisions. Perhaps, this is because the skills of implementation, which involve the exercise of power, are much harder to articulate, much less to train or teach.

According to US Professors Jeffrey Pfeffer and Gerald Salancik, power is a prerequisite for implementation because it provides the energy to initiate action, innovation and change, by influencing the behaviour of others. In today's business world, managers must often depend on internal and external stakeholders outside their own direct control, not accountable to them. Many of these people may not share the vision of a manager who wishes to engage in some form of action. Therefore, to enlist their co-operation, the manager must resort to informal influence.

Yet, people are ambivalent about power because we have all seen abuses applied toward undesirable outcomes. But managers should not confuse means and ends. Power can, and often must, be used to attain positive achievements.

It is not uncommon to find a manager operating his own strategy from his own power base, independently of the rest of the organisation, while paying lip service to his part in the company's authorised strategy. Researchers and consultants have observed that companies may have an "official" strategy, enunciated by the firm and its leadership. However, this explicit strategy frequently omits some important elements of the real strategic intentions of some of the players who may be jockeying for political advantage; these people present only selective information which ultimately finds its way into the official plan. This illustrates that there can be a gap, sometimes a large one, between the declared strategy and the implemented one, because the latter is the one with the power behind it.

If the application of power is such a central feature of effective action, this fact has to be accepted, and its dynamics understood. Professors Pfeffer and Salancik have devised a "strategic contingency model of power" to describe who gets power and how they hold on to it. Simply put, it is those who are seen to solve the critical problems of the company who attain power. Apart from criticality, two other conditions affect power dispositions in organisations - scarcity and uncertainty.

Powerful people resolve key organisational issues through their activities, which are critical and scarce. Political manoeuvring can sometimes consist of manipulating a situation so that one's own or departmental activities are portrayed as uniquely critical. Moreover, the allocation of those activities may be strictly rationed by those who control them to further enhance their power. For example, because they hold the purse-strings, finance departments of companies and governments are often the most powerful. That might explain the success rate of finance directors in eventually obtaining CEO positions - because they have built up a power base and image.

Uncertainty affects the use of power, because when the way ahead is not clear, it is likely that the powerful manager or business unit will fill the vacuum and decide what is to be done. In many instances, people may even turn to such a powerful entity, on the assumption that power and expertise go together.

Those who gain power by solving the firm's problems are in a position to amass more power. Having proven themselves to be key to the organisation, they may then extend their influence beyond their original domain.

Commonly, power initially gained through problem resolution becomes institutionalised. Powerful units or departments use their clout to define what is critical so that their own activities are given prominence. Once in power, the holder is in the best position to devise policies, procedures, structures and rewards that favour themselves and their allies. Eventually, power institutionalised in this way can become monolithic, and out of tune with the challenges of the external environment.

Then, unofficial or informal forms of power must sometimes be used to offset the institutionalised power system. The official hierarchy can have a tendency to buffer itself from external reality, as a method of self justification and protection of vested interests. If necessary change is resisted, a challenge to the establishment may be the only way to prevent the organisation from languishing, or from missing opportunities, such as happened with Xerox and IBM. At least, recourse to power sources other than the official hierarchy will ensure that a diversity of views is heard, to question the prevailing mindset. The end of a failed strategy usually sees its promoter go with it - for example, Bernd Pischetsrieder of BMW, Doug Ivester of Coca-Cola and Sir Richard Greenbury of Marks & Spencer.

Ultimately, it is those with political skill who get things done. Political skill includes insight or cognitive abilities, as well as interpersonal elements. An appreciation of where power lies in the firm and how to secure that power to implement decisions is a necessity for effective strategic management at all organisational levels. For the individual manager, this involves a clarity of understanding of the following - What is s/he trying to achieve? On what/whom does this achievement depend? What are the relative power positions of the individual and others with power? Do the others share his/her goals?

Since the execution of decisions is dependent on co-operation from other people, political skill as an interpersonal feature is essential. A team of Florida State University researchers state that politically skilled people know exactly what to do and how to do it in given situations. Even if their intentions are manipulative, they do not come across as such.

Is the ability to manage effectively with power intuitive, or is it trainable? This is debatable, and of course, there are always consultants ready to provide training. But, at a minimum, everyone who works in an organisation should understand that the work environment is a political arena, where the exercise of power, through political means, is an important way to get things done. Politics is, indeed, the art of the possible.

Dr Eleanor O'Higgins is a lecturer in strategic management and business ethics at the Smurfit Business School, UCD.