Power has one purpose—to produce desired results.
Power is subtle. Power is not gained through manipulation; it is obtained through the artful application of the elements of organizational power. There are four elements of organizational power-Diplomacy, Information, Manpower, and Economics.
To keep this writing short and to the point, I will briefly address Diplomacy. Look for the other elements of power over the next few months.
Diplomacy is about building and maintaining relationships and establishing a reputation.
Diplomacy is building and maintaining relationships outside of your organization’s sphere of influence. This includes relationships with organizations from other industries, Government entities to include, Federal, State, and Local. I can hear many of you saying ‘of course, we do maintain those types of relationships. It is only smart and good business to do so.’
Yes, it is smart business to build and maintain those types of relationships particularly given the second element of power—information. Each of the entities named earlier can provide valuable intelligence, also known as actionable information, which will assist in keeping your organization profitable.
I recommend building and maintaining relationships with charitable organizations; nonprofits, particularly nonprofits that have causes that impact your industry; and community organizations. I would advise all businesses regardless of the industry connect to education efforts in the communities they are based and have a presence.
The good will of the community is worth 100 fold the investment of time, money and effort to maintain a positive relationship. Things go wrong. When they do, it is invaluable to have a positive relationship with the community.
The community is more than a geographic area. A community is also a type of consistent customer. As an example, in the transportation industry the “community” takes into account not only geography but a community of travelers, some local commuters travel exclusively by rail, others by public surface transportation, still others are national or international travelers and utilize regional rail or aviation. Each community will have an impact on the transportation industry.
Reputation and Relationships go hand-in-glove. Reputations are built by an organization doing what it says it is going to do. It is making a promise and delivering on that promise.
When a customer buys a product or service, a promise is made by that business. The product is free of flaws, and the service will be complete and satisfactory. Note, I did not reference warranties or fine print. A promise, implicit as it may seem, has been given.
Organizations today suffer from not immediately living up to the promise of flawless and satisfactory service. United Airlines is top of mind for damaging its reputation as a result of not living up to the promise of satisfactory service.
The unfortunate display of lack of service surrounding the overselling of seats which led to the forceful removing of a passenger. The incident haunts United Airline and will for some time.
Conversely, General Motors (GM) experienced a recall nightmare. In 2014 GM recalled what seemed like every model of car made—Feb 2014—800,000 Chevrolet Cobalt and Pontiac G5 vehicles; 600,000 Chevrolet HHR, Pontiac Solstice, Saturn Ion, Saturn Sky vehicles; March over 824,000 additional vehicles recalled due to faulty ignition switches. Facing what the casual observer would anticipate as the demise of a brand, the opposite happened. GM sales in 2015 grew totaling 9.8 million vehicles.
In the case of United Airlines, their first effort to mitigate the situation was to reference the small print and cast blame on the customer. United took no ownership of the implicit promise. The United Airlines reputation is damaged and will take time to repair.
GM, under the new leadership of Mary Barra, took responsibility for the problems leading to the recall. Her statement “We will hold ourselves accountable and improve our processes, so our customers do not experience this again.” GM lived up to the implicit promise all companies have with their customers. The GM reputation remains in tact.
Power has one purpose—produce desired results.
Organizations that understand the first element of power—Diplomacy is on the fast track to wheeling power effectively. Producing the desired results start with building and maintaining relationships and a reputation that delivers on promises.