So this month, join me on a journey into how power changes people, why and how power corrupts, why powerful countries may feel more threatened by their neighbors, and what it all means for the US, Europe, Russia and China.
Lord Acton already knew that “Power tends to corrupt and absolute power corrupts absolutely”. But there is a whole literature that ironically comes from studying CEOs and other powerful executives that shows how power changes people’s behavior.
These behavioral changes can be useful, such as taking initiative. In conversations, More powerful people tend to make the opening statement or make the first argument. In a commercial environment, more powerful people also tend to initiate negotiations. Of course, this can also turn into a harmful pattern of behavior, as more powerful people tend to interrupt less powerful people in a team setting or in a discussion, or talk over less powerful people in the room.
More importantly, powerful people tend to process information and think differently. CEOs and other powerful people in business tend to make greater use of what Daniel Kahneman called System 1 thinking. Intuitive and fast instead of deliberate and slow.
Erik Dane and Michael Pratt argued that an important requirement for managers in companies is that they have to make decisions quickly and under a lot of uncertainty. Therefore, it can be advantageous for powerful people in organizations to trust their intuition.
Indeed, this study by Ana Guinote A series of experiments found that powerful people in organizations tend to focus more on the core information and input to solve a specific problem, and mix in peripheral information as noise. This increased focus, in turn, led to faster action and greater flexibility in dealing with many challenges simultaneously.
This is the positive change people experience when they become powerful. It is not an effect where people who are naturally more dominant or can concentrate better rise to the top. Instead, you can take any person in a laboratory setting and “give her power,” and the person will feel and act more confident and proactive by focusing on the core information needed to solve a challenge.
Experiments show that it is not necessarily the most competent people who become more powerful in an organization. Yes, more competent people tend to become more powerful in organizations. Yet this study showed that people who appear intelligent have an even easier time amassing power in an organization. The one quote that has stuck with me the most (and that has depressed me the most) comes from this study from 2004:
“[I]It may be that the social self – how leaders are perceived by others – is more important than scores on objective instruments in achieving leadership roles. […] It is possible that the validity observed for perceptual measures of intelligence reflects the fact that leadership status is awarded to those who effectively manage a reputation for intelligence.”
Translation: People who are malleable and appear intelligent will amass more power in organizations than people who are competent. And in turn, as people become more powerful in organizations, other people in the organization will view them as more intelligent and competent.
As people become more powerful in organizations, their psychology changes. We’ve already seen that they tend to rely more on the core information at hand and use faster, intuitive thought processes rather than slow, deliberate processes.
Indeed, this study shows that this entails high costs for the organization. Because powerful people in organizations tend to rely more on their gut feelings, they also place too much emphasis on their personal experiences. Therefore, they tend to act in accordance with their previously held beliefs, rather than fully examining a situation and trying to come up with the best solution.
This can go so far as to ‘dehumanize’ subordinates. Powerful people in organizations often know less about their subordinates than their subordinates know about them. On the one hand, this reflects the fact that subordinates need to orient themselves around their bosses so that they know better what they like and don’t like and how best to present an argument. But there is also an active component of dehumanization and stereotyping of subordinates by the bosses at play this research revealed two rather depressing experiments.
Finally, power corrupts. This studyfor example, shows that CEOs’ political preferences influence a company’s corporate social responsibility actions. CEOs spend company resources on their pet projects and decide which corporate social responsibility actions are worthwhile. Blake Ashforth and Vikas Anand discuss all the pathways and mechanisms through which corrupt behavior can be normalized in an organization and how an organization should take active steps to curb these trends.
That is why good governance is so important. If you give a CEO too much power, he or she will eventually abuse the power to enrich themselves or take too much risk, which can be costly to the company and its shareholders.
Power changes people. It changes their self-esteem and subsequently their behavior and their perception of others. This is true in a business environment, where these effects have been documented through laboratory experiments. Yet this also applies in the corridors of political power, from Washington to Westminster, and from Beijing to Berlin.
Next Wednesday I will discuss not only how absolute power in politics absolutely corrupts, but also why unchecked power almost inevitably leads to a corrupt bureaucracy. This is where we leave the realm of business and organizations in general and enter the realm of geopolitics.
#Behavioral #geopolitics #power #people