Power

Jeffrey Pfeffer

• Publisher: HarperCollins e-books
• Year: 2010
• ISBN:
  9780062010612
• Topic: Negocios y empresa
• Subtopic: Comportamiento organizacional

"Pfeffer [blends] academic rigor and practical genius into wonderfully readable text. The leading thinker on the topic of power, Pfeffer here distills his wisdom into an indispensable guide."
—Jim Collins, author of New York Times bestselling author Good to Great and How the Mighty Fall

Some people have it, and others don't—Jeffrey Pfeffer explores why in Power. One of the greatest minds in management theory and author or co-author of thirteen books, including the seminal business school text Managing With Power, Pfeffer shows readers how to succeed and wield power in the real world.

1

It Takes More Than Performance

IN 2004, the Miami-Dade County, Florida, school board hired former New York schools chancellor Rudy Crew as superintendent to help improve a typical urban school district struggling with both budget and failing schools problems. While Crew was in charge, the district was a finalist for the Broad Prize for Urban Education in 2006, 2007, and 2008, improved its bond rating, achieved improvements in student academic performance, and built thousands of classrooms to ease overcrowding.¹ Recognizing this performance, in the spring of 2008, the American Association of School Administrators named Rudy Crew the National Superintendent of the Year, bolstering his reputation as an innovative school administrator. His reward? By September 2008, less than six months after being named the best school leader in the country, Crew was negotiating his severance package with a school board that had voted to get rid of him.

If you think it’s just in the domain of public education where success fails to guarantee job security, think again. At the Veterans Health Administration, Ken Kizer, appointed by Bill Clinton in 1994, inherited an antiquated, inefficient health-care system. The VA faced changes in its client population, the competitive healthcare environment, and modalities for delivering care.² In just five years, Kizer instituted an electronic medical record system, made structural changes to enhance efficiency and quality of care—with 20,000 fewer employees, the VHA went from serving 2.9 to 3.5 million veterans—changed the culture to be more receptive to change, and according to a cover story in BusinessWeek, laid the foundation for making the VHA the purveyor of “the best medical care in the U.S.”³ In 1999, facing stiff Congressional opposition to his reappointment, Kizer relinquished his post. Balancing politics and medical care turned out to be difficult—“in particular, the closure of VHA hospitals in certain key Congressional districts had created acrimony in Congress.”⁴

And it’s not just in the public sector where there is a weak link between job performance and career outcomes. The world of business offers numerous cases, too. Although few may remember, Jamie Dimon, the now-celebrated CEO of financial powerhouse JP Morgan Chase, left Citibank when his onetime mentor and boss, Sandy Weill, turned on him. Arthur Blank and Bernard Marcus founded the large and successful home improvement company Home Depot after they were fired in the late 1970s from Handy Dan Home Improvement Centers by a boss who didn’t like them. John Scully forced Apple cofounder and technology visionary Steve Jobs out of the company in the 1980s. And that’s just a small sample from a very long list.

And it’s not just at the highest levels or just in the United States where performance doesn’t guarantee success. A marketing executive in India asked her CEO to formally recommend her for a list of “high potential leaders” in the organization, which would be accompanied by getting paid more than 30 percent higher than peers at the same level and becoming eligible for assignments more likely to advance her career. This request came just after she had been instrumental in turning around a distressed brand, had been nominated for an internal marketing award, and after she won an external advertising award at the Indian equivalent of the Cannes film festival. Her request was refused, past outstanding performance notwithstanding.

Not only doesn’t good performance guarantee you will maintain a position of power, poor performance doesn’t mean you will necessarily lose your job. Michael Jeffery maintained his position as CEO of LECG Corporation, a global expert services and consulting firm, for three years even though the company was almost never profitable during his tenure and in just the two years prior to the announcement he was voluntarily stepping down, the stock price declined 80 percent, much more than did competitors’. His prior relationship with the non-executive chairman of the company and his ability to “manage” the board and blame the company’s problems on his predecessor (who had actually built the company) ensured his survival—for a while. Or consider the CEO of a medical device company who has presided over nearly a decade of flat stock price, a growth in sales that did not translate into a corresponding growth in profits, and turnover in the senior executive ranks that left the company with no inside successor. Notwithstanding this weak job performance, his salary has increased rapidly and his job is secure—because of his close relationship with the non-executive board chairman and with a majority of the board of directors. The lesson from cases of people both keeping and losing their jobs is that as long as you keep your boss or bosses happy, performance really does not matter that much and, by contrast, if you upset them, performance won’t save you.

One of the biggest mistakes people make is thinking that good performance—job accomplishments—is sufficient to acquire power and avoid organizational difficulties. Consequently, people leave too much to chance and fail to effectively manage their careers. If you are going to create a path to power, you need to lose the idea that performance by itself is enough. And once you understand why this is the case, you can even profit from the insight.

THE WEAK LINK BETWEEN PERFORMANCE AND JOB OUTCOMES

There is a lot of systematic evidence on the connections between job performance and career outcomes. You need to know the facts if you are going to intelligently plot a strategy to acquire power. The data shows that performance doesn’t matter that much for what happens to most people in most organizations. That includes the effect of your accomplishments on those ubiquitous performance evaluations and even on your job tenure and promotion prospects.

More than 20 years ago social psychologist David Schoorman studied the performance appraisal ratings obtained by 354 clerical employees working in a public sector organization.⁵ Employees were categorized by their supervisors’ involvement in their hiring. In some cases, managers “inherited” employees—they were there when the manager took on the supervisory role. In other cases, the boss participated in the hiring decision and favored the job candidate now being evaluated. In still other instances, the supervisor participated in the hiring or promotion decision but he or she was overruled by others involved in the final choice. In this latter case, managers found themselves supervising an employee they had not favored hiring. The simple but important question Schoorman asked was: how does a supervisor’s mere involvement in the hiring process affect the performance evaluations subsequently given to subordinates?

As you might guess, supervisors who were actively involved in hiring people whom they favored rated those subordinates more highly on performance appraisals than they did those employees they inherited or the ones they did not initially support. In fact, whether or not the supervisor had been actively engaged in the selection process had an effect on people’s performance evaluations even when objective measures of job performance were statistically controlled. Supervisors evaluated people hired over their opposition more negatively either than those whom they had favored in the hiring or those they had inherited. David Schoorman’s study shows the effects of behavioral commitment—once someone has made a positive or negative judgment about a potential job candidate, that judgment colors subsequent performance appraisals. What this research means is that job performance matters less for your evaluation than your supervisor’s commitment to and relationship with you.

Extensive research on promotions in organizations, with advancement measured either by changes in position, increases in salary, or both, also reveals the modest contribution of job performance in accounting for the variation in what happens to people. In 1980, economists James Medoff and Katherine Abraham observed that salaries in companies were more strongly related to age and organizational tenure than they were to job performance.⁶ Ensuing research has confirmed and extended their findings, both in the United States and elsewhere. For instance, a study using data from Dutch aircraft manufacturer Fokker reported that white-collar workers who received performance ratings of “very good” were only 12 percent more likely to be promoted than colleagues rated “good.”⁷ Meanwhile, many studies have documented the influence of numerous factors, ranging from educational credentials to race and gender, on careers, with performance often having a statistically significant but substantively small effect on advancement. For instance, a study of more than 200 employees from a variety of companies found that managers considered job tenure, educational credentials, overtime work, and absence as well as job performance in determining internal mobility for employees.⁸ A study of federal civil service employees, an excellent setting because of the extensive measures captured in the database, noted that performance ratings were weakly tied to actual productivity and that people with more educational credentials were more likely to be promoted even if they weren’t the best employees.⁹

Not only may outstanding job performance not guarantee you a promotion, it can even hurt. Consider the case of Phil. A talented young executive working in a large financial institution, Phil had the uncanny ability to bring complex information technology implementation projects in on or ahead of schedule and under budget. His boss, a very senior executive in the bank, profited mightily from Phil’s performance. He was willing to reward Phil financially. But when Phil asked his boss about broadening his experience by moving to other jobs in the bank, the answer was immediate: “I’m not going to let you go because you are too good in the job you are doing for me.” And while Phil’s boss was quite willing to expand Phil’s scope of responsibility for IT implementation in his division, he was completely unwilling to do anything that would bring Phil to the attention of others and thereby risk losing him.

A slightly different variant of this same story comes from “Glenda.” A Scottish manufacturing executive with an extraordinary ability to bond with front-line employees, Glenda had worked for her employer for more than a decade, moving around the world to accomplish almost miraculous turnarounds in troubled plants. Her job evaluations were great and she received performance bonuses and regular raises for her work. But there were no promotions in Glenda’s recent past with her employer nor, she told me, in her future. Glenda figured out the problem: the senior executives in her company saw her as extremely effective in her current position. But they did not want to lose her abilities in that role, and they did not see her as senior executive material—as a great candidate for much more senior jobs in the company. Thus, great performance may leave you trapped because a boss does not want to lose your abilities and also because your competence in your current role does not ensure that others will see you as a candidate for much more senior jobs.

Doing great doesn’t guarantee you a promotion or a raise, and it may not even be that important for keeping your job. Most studies of job tenure examine CEOs, because CEOs are highly visible and that’s the position for which there is the best data. Performance does affect job tenure and its obverse, getting fired, but again the effects are small. According to one study, CEOs who presided over three straight years of poor performance and led their firms into bankruptcy only faced a 50 percent chance of losing their jobs.¹⁰ Whether or not poor performance led to dismissal depended on the CEO’s power. Executives who had power because of their own ownership position, because other ownership interests were dispersed, or because there were more inside board members—executives who reported to the chief executive—were more likely to retain power even in the face of bad business results. A study of the top five executive positions in almost 450 companies found the sensitivity of turnover to company performance was even smaller for those jobs than it was for CEOs. Turnover in senior executive ranks was affected by CEO turnover, particularly when an outsider came in. That’s because CEOs like to put loyalists in senior positions—regardless of what past incumbents have accomplished.¹¹

So great job performance by itself is insufficient and may not even be necessary for getting and holding positions of power. You need to be noticed, influence the dimensions used to measure your accomplishments, and mostly make sure you are effective at managing those in power—which requires the ability to enhance the ego of those above you.

GET NOTICED

People in power are busy with their own agendas and jobs. Such people, including those higher up in your own organization, probably aren’t paying that much attention to you and what you are doing. You should not assume that your boss knows or notices what you are accomplishing and has perfect information about your activities. Therefore, your first responsibility is to ensure that those at higher levels in your company know what you are accomplishing. And the best way to ensure they know what you are achieving is to tell them.

The importance of standing out contradicts much conventional wisdom. There is a common saying that I first heard in Japan but since have heard in Western Europe as well: the nail that sticks up gets hammered down. Many people believe this statement and as a consequence seek to fit in and not do anything to stand out too much. This rule may make sense in some places and at some times, but as general career advice, it stinks.

For you to attain a position of power, those in power have to choose you for a senior role. If you blend into the woodwork, no one will care about you, even if you are doing a great job. As one former student commented:

I am the guy you notice when he is gone, but not necessarily while he is there. I call this phenomenon becoming “the foundation guy.” The foundation is necessary for the house and all goes to hell without it, but it is buried underground and works just fine about 95 percent of the time. It usually goes unnoticed. Quiet work, or heads-down work, which is efficient and effective—but never flashy—usually fails to get noticed. You can make a great career as a middle manager doing quiet work, but can you gain a lot of power? The answer is most definitely, “no.”

In advertising, one of the most prominent measures of effectiveness is ad recall—not taste, logic, or artistry—simply, do you remember the ad and the product? The same holds true for you and your path to power. That’s because of the importance of what is called “the mere exposure effect.” As originally described by the late social psychologist Robert Zajonc, the effect refers to the fact that people, other things being equal, prefer and choose what is familiar ...