Power: people crave it. Politicians lie, steal and cheat for it. Nations fight for it. Organizations go out of business from the lack of it, and a precious few are glamorized on the cover of business magazines because they have an abundance of it. Organizations, across all industries, have power. How they use it can result in astonishing success or dismal failure. This article identifies the elements of power and briefly examines an industry where dismal failures in using organizational power continue on a frequent basis. Moreover, the successful use of power is rare but producing dramatic results.
The elements of power are the same for all industries. Those elements are Diplomacy, Information, Manpower, and Economics—DIME.
The Diplomatic element of organizational power is building and maintaining external relationships. How the organization maintains relationships with regulating authorities at each level of government, federal, state, local keeps an organization from legislative disaster. Sustaining a relationship with the community the organization operates in is not just good diplomacy but provides for a ready work force and the all-important consumers for goods and services. Preserving a relationship with competitors keeps an organization in synch with best practices and provides allies in the event of sweeping legislative action that could prove damaging to the industry. Keeping strong relationships with vendors is a hedge against rising costs of doing business and becomes a source of market intelligence.
The Information element of organizational power speaks to an organization’s ability to gather and control information. Information exists in overabundant quantities. Power is generated by being able to take information and turn it into actionable information—intelligence. Strategies and plans are driven by what is known; not assumed. Controlling information is about your organizations message. What is the message to the public, investors, government and employees? The image and health of the organization hangs in the balance based on what the public, read customers and potential customers, investors and regulators, perceive to be true.
Manpower is the element of organizational power that requires the skill of touch from an organization’s leadership. Touch is a soft skill that is hard for most to master. It is recruiting and retaining capable employees. It is training and career development. It is equipping the man; not manning the equipment. It is providing an environment for the employees and subordinate leadership that allows for challenging the process and taking risks. It is not accepting effort in place of results. It is motivating people to go beyond what is possible.
The Economic element of power is all about resource. It is the understanding that Strategy without immediate consideration to resources is a hallucination. The economic element of power used appropriately funds the strategy and prioritizes funding of plans that place the strategy in action. Prioritizing resources are not equal amounts to various entities of the organization or fair amounts. There are always first among equals and fair is not. Establishing priorities ensures critical elements of a strategy are funded sufficiently to maximize chances for successful implementation.
The airline industry is a great example of the lack of understanding of how to wield organizational power. The airline industry is an oligopoly. There are only a few firms that make up the industry. This select group has control over the price and, like a monopoly, has significantly high barriers to entry. The service they provide is identical. The result is the companies that compete for market share are interdependent as a result of market forces. To the casual observer the very nature of the industry would speak to the logic of why the airline industry is a basket case. The same forces affecting one affect all. The spike in oil prices, unrelenting labor issues, and the like, has equal impact. Therefore, it is no surprise that every large carrier has been in bankruptcy. According to the Center for Aviation, more bankruptcies are to be expected to occur within the next five years.
There is one major carrier that has not been in bankruptcy—Southwest Airlines. There have been many an article written, and evening newscast focused on the “why” of Southwest’s success. Reasons have ranged from employee satisfaction to baggage fees to explain the unexplainable, success in an industry where the public has come to accept failure as the way of business. I offer that the reason for Southwest Airlines continued success is their leaderships understanding of and ability to use organizational power.
Diplomacy—maintaining relationships outside of the organization
Southwest’s belief in maintaining relationships is becoming legendary. Cornell University published a study in 2004 citing the unique labor relations at Southwest as being key to their continued success. The relationship southwest maintains with government has resulted in the federal government recommending them as a preferred carrier for government travel. Additionally, they recently received a Single Operating Certificate from the FAA and the Department of Transportation this certification allows Southwest and AirTran to operate as one airline, in what many consider record time, making them the largest domestic carrier in the United States. The good will Southwest has engendered form the community goes beyond their popular no luggage fee. They maintain a unique charitable posture with programs such as their “Adopt a Pilot” program—a program where pilots tutor and mentor young school children.
Information—gathering and disseminating information
Southwest Airlines maintains a Business Intelligence organization as an integral part of Southwest. The actionable intelligence from this organization is used to reset strategic direction, prioritizing processes, and improve partnerships with business customers.
Manpower—recruiting, training, maintaining, talent
One of the most recognized strengths of Southwest is motivated work force. Employees are encouraged to make decisions and challenge the process. Although clear and succinct job descriptions exist at Southwest, a clause is included in each job description encouraging the employee to do whatever it takes to accomplish the mission. Chris Mainz, spokesperson for Southwest Airlines said, “We focus on our employees first, customers second, and shareholders third.”
Economics—resourcing the strategy
The strategy of point-to-point flying that Southwest adheres too is artfully resourced. The airline uses one model airplane, the 737. They have never served meals. There are no assigned seats. This methodology supports maintaining low cost. More importantly, by keeping it basic an aircraft is unloaded, cleaned, restocked, and a full flight boarded in as much as 90 minutes. According to airline experts, this methodology allows Southwest jets to fly an extra flight per day. Extra flights equal extra revenue.
The elements of organizational power exist for every business regardless of size and industry. It is the responsibility of senior leadership to exercise it properly. Similar to a conductor of an orchestra making incredible sounds by the movement of his baton, so does a senior executive meet and exceed goals by their coordinating the use of organizational power.
Colonel John Boggs U.S. Marine Corps (Ret.) works with outstanding leaders to leverage talent in order to dramatically improve performance and rapidly exceed goals.
© 2012 by John Boggs all rights reserved.