The good, the bad and the powerful
"Power corrupts, and absolute power corrupts absolutely." Lord Acton's words have been quoted widely since he wrote them in the 1880s. Niro Sivanathan, Assistant Professor of Organisational Behaviour, was part of a research team that tested whether power, indeed, can go to one's head
The Queen turned crimson with fury, and, after glaring at her for a moment like a wild beast, began screaming "Off with her head! Off with-"
"Nonsense!" said Alice, very loudly and decidedly, and the Queen was silent.
Very few individuals read Lewis Carroll's Alice in Wonderland as a study in organisational power and control. Yet, this excerpt resonates with some recent studies that I conducted along with colleagues from Stanford Graduate School of Business and the Kellogg School of Management.
As a background, in a 2008 article in Organisational Behaviour and Human Decision Processes, Madan Pillutla (London Business School), Keith Murnighan (Kellogg School of Management) and I were intrigued by how individuals psychologically adjust to shifts in power bases that accompany changes in the workplace, an inexorable element of contemporary organisational life. Our findings consistently revealed that individuals over-reacted to gains in power - forcefully exercising greater power than that afforded in their new role.
As a follow up, Nathanael Fast, Deborah Gruenfeld (Stanford Graduate School of Business), Adam Galinsky (Kellogg School of Management) and I tested more explicitly, if individuals can, indeed become drunk on power. The context for these studies is detailed in a 2009 article in Psychological Science (www.psychologicalscience.org); let me highlight few of the studies here:
Experiments were done in the US involving 190 individuals - 68 undergraduate students and 122 adults. The experiments placed participants in a context of either: (a) thinking about a time when he or she had power over others, or (b) having a higher level of power in the context of the experiment. Others found themselves in the opposite position: (a) thinking about times someone had power over them, or (b) actually having less power as a participant in the experiment.
- In one experiment, when offered the chance to earn a bonus for correctly predicting the outcome of a die roll, each and every participant in the high-power condition decided to roll the die themselves. In contrast, approximately two-thirds or fewer of the participants in the low-power and baseline conditions chose to roll the die themselves. By rolling the die themselves, the powerful participants believed they could somehow influence the outcome of this random event.
- In another experiment, individuals from the group that wrote about an event in which they had a sense of power, believed at the time of our experiment that their vote could influence the outcome of a national election; 70 percent felt that way versus only 42 percent from the baseline group.
- Finally, in an experiment involving a simulated negotiation between an employer and a job applicant, participants who were assigned to a high-power position believed that their upcoming negotiations would not only succeed, but would result in favourable terms for themselves relative to baseline participants.
These studies revealed that the experience of power can lead to an illusion of control. When one thinks she has power, it can lead her to think that she can control outcomes that are, in fact, beyond her span of control.
Who's in control?
Thinking back to Alice's travels in Wonderland and the imperious demands for her execution, Lewis Carroll writes about a fictive Queen to whom everyone else who's part of that fictional world defers. The Queen, to them, has absolute power - and she knows it. But Alice, a tourist from the "real world" who just happened to fall into a rabbit hole, tries to be her human self no matter whom she meets in Wonderland, the Queen included. Now, what's all this got to do with the world of business?
The tendency for the powerful to have an illusion of personal control, could explain how CEOs chase mergers that were never destined to materialize and how presidents and prime ministers can pursue wars that were never destined to be won. More importantly, the research can help all of us better understand how power affects risky decisions.
Power really can go to one's head. In our experiments, people were randomly assigned to positions of high or low power. They did not truly have power - they were told or induced to think that they had power. One has to wonder, then, about the CEOs who think that they can effect a successful merger or acquisition simply by virtue of their self-awarded sense of control. Powerful organisational actors should be heedful of the possibility that this illusion of personal control is one way power often leads to its own demise. As with the Queen in Wonderland who went mute when defied by Alice, it is a hard lesson to learn that not everyone will bend to your will.
Power shifts are part of corporate life. These experiments found that the attitudes and behaviours of powerful people can be generated quite quickly, based on situation-based power asymmetries. Put more simply, when someone is promoted from worker to manager, that person can start to behave differently based on a new sense of control. This raises questions about how organisations can best manage the illusion of control that may plague executives as they amass power upon ascending the organisational hierarchy.
Lastly, power impacts decision-making. In our experiments, those who found themselves in situations of illusory control tended to take action, be optimistic and maintain high self-esteem. As stated in the Psychological Science article, our experiments help to shed light on why the powerful often seem to exhibit hubristic overconfidence. By producing an illusion of personal control, power may cause people to lose touch with reality in ways that lead to overconfident decision making.
Good and bad
Without doubt, a hot-shot trader who bets on weather to disrupt natural gas prices - without comprehending the risks involved in leverage - can swiftly cripple a hedge fund. Similarly, powerful politicians who overestimate the might of military muscle can march countries into costly wars. However, it would be wrong to conclude that having a sense of power and control is always dangerous and damaging. Take an entrepreneurial leader who has little more than a vision of a new enterprise and unbounded confidence in her ability to bring it to life. In this case, positive thinking can lead those in power to achieve the unimaginable by launching low-probability ventures that succeed through the sheer strength of persistence. In the end, one is reminded of the philosopher, Laozi, who said "Mastering others is strength; mastering yourself is true power."
Niro Sivanathan (nsivanathan@london.edu) is Assistant Professor of Organisational Behaviour at London Business School.