If power in business refers to the potential or capacity to influence others to achieve organizational objectives, then empowering others is the best way for realizing these goals. Leaders who empower others are not new. As Lao Tzu already posited: “A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.” How can organizations transition to making empowerment a lived reality? What steps can they take to get there?
Instead of concentrating power in the hands of one single person or a small (homogenous) group, power should be understood as empowerment distributed among many. While by the very nature of hierarchies not everyone can be at the top, it is still possible to devolve and share power. One of the most common indictments of hierarchical organizations is that they are outdated—too slow, too unbending for the turbulence of the modern world (Leavitt, 2003). The rapidly changing surroundings require organizations to go beyond exerting control over others – the traditional concept of power – and mobilize others’ energy and commitment (Lingo & McGinn, 2020).
Done right, empowerment boosts creative problem-solving, cooperation, decision quality, overall and individual performance, the pursuit of innovative solutions, confidence in achieving positive outcomes, and motivates the entire team (Barsade, 2002). By distributing power across a network of employees, organizations can tap into a wider range of talents and insights, fostering a culture of engagement.
In contrast, the opposite occurs when power is centralized in a small handful of homogenous leadership teams. This can significantly impact individuals’ perceptions, actions, and cognition, potentially resulting in detrimental effects on relationship-building, communication, and overall managerial performance (Ziemianski, 2022). Studies have shown how groupthink can lead to bad decisions due to the absence of dissenting opinions, limited creativity, overconfidence in consensus, overlooked optimal solutions, and insufficient feedback on decisions, all of which negatively impact organizational profitability and performance (Umana & Okafor, 2019). One classical example is financial crisis in 2008 where a dominant fraction of the assets held by major U.S. investment banks were instead valued according to the bank‘s own models and projections, or even according to management’s best estimates. This means that the diversity of thought and perspectives – a key benefit of a diverse team – cannot actually have any positive effect.
Shared power aligns with the principles of equity and social justice by ensuring that marginalized voices are heard and valued in decision-making processes (Nishii & Leroy, 2022). In this way, empowerment helps companies reap the full benefits of their diverse workforces. But how can companies get there?
Traditional structures of power perpetuate the image of the “heroic” leader. But, as Tina Turner famously sang: “We don’t need another hero.”
We need to make a new vision of leadership that offers an alternative to traditional leadership models to disrupt the existing power structures (Fletcher, 2004). So-called post-heroic leadership emphasizes collaboration, collective success, decentralized decision-making, and empowerment. By emphasizing individual personality, motives, and competences, the relevance of gender is de-emphasized. Thus, post-heroic leadership focuses solely on leadership skills rather than gendered attributes, and should not be associated with ideas of masculinity or femininity. Post-heroic leadership prioritizes achieving success and confronting contemporary challenges by questioning and redefining entrenched power hierarchies (Nentwich et al., 2023). Post-heroic leaders foster inclusive environments where diverse perspectives are valued, collective problem-solving is encouraged, and power is distributed more equitably. As such, empowerment and power sharing require post-heroic leaders.
But: How can we get leaders, companies, and employees to empower others? While many acknowledge that the current leadership model is inadequate, they may lack the knowledge or tools to effectively navigate this transition.
People management is still seen as synonymous with having a career. Today’s business leaders are expected to do (and know) it all: People management, project management, P&L responsibility, subject matter expertise. This contributes to homogenous corner offices, since there are more women in expert roles than in leadership positions, which can result in a bias toward valuing leadership roles over expertise, which often favors men over women (Galsanjigmed & Sekiguchi, 2023). Diversifying career paths and de-coupling them from (often unspoken) expectations of people management also opens the door for a wider, more diverse range of talents to advance. For instance, women could assume leadership positions within tech companies, even if they are not the foremost technical experts. Separating people leadership from expertise also acknowledges that individuals have different goals and motivations – one size does not fit all.
Why does this matter? Expecting leaders to do everything can lead to inefficient management. Universities and hospitals are notorious for this: For example, a full professor at a university might lead a staff of dozens, made up of researchers, doctoral students, administrative personnel, etc., and might take on additional management responsibilities, for example as head of department, head of an academic search committee, or similar. At the same time, the professor cannot rely on the positional power or status normally associated with a management role, but what really counts is their very narrow expertise in a subject matter, measured in publication output and funding success (Hengartner, 2012). Everything that is not directly related to the latter is considered secondary or even a hindrance to the central goals of the institution. Who among the experts is interested in internal process definitions or interdisciplinary personnel development when you have to create knowledge and advance science (professor) or train the elite of the future or save lives (doctor)?
Furthermore: In many organizations, power and decision-making authority tend to be concentrated among CFOs and core business leaders, while leaders in legal or HR roles may have less influence (Harrison & Malhotra, 2024; Logue & Casteel, 2024). However, there are compelling reasons to reconsider this imbalance and provide legal and HR leaders with comparable levels of power such as strategic alignment and risk management. In today’s age of skills shortage, HR becomes a strategic topic. Additionally, legal issues, such as lawsuits related to discrimination, can pose significant risks to the survival of a company. In this way, organizations can leverage their expertise more effectively, drive strategic value and enhance overall organizational performance.
Businesses have traditionally taken a rigid approach to career progression – complete your goals and move up to the next rung of the ladder. In this way, development is closely tied to upward mobility (i.e. promotions) and to having a career in the traditional sense.
This isn’t good for business, or for employees. Employees end up tied into one particular progression pathway, unable to acquire new skills outside of their immediate remit or shift into another department where they could add value. If employees are unfulfilled in their role, they often have little choice but to leave, even if they would rather not. Swiss businesses and organizations simply can’t afford this!
Companies and their managers need to shift the focus of career conversations from promotion to developing in different directions. Also: Companies need to shift away from development within business units only, i.e. shift from a focus on business units to focusing on the company overall. Employees need to be empowered to explore opportunities beyond the boundaries of their existing team, to learn a skill not directly related to their current role, to rotate into a different location or department. Call it spiral career, portfolio career, zig zag career, or whatever you will – trying out something new shouldn’t only be encouraged but rewarded (Bilderback & Miller, 2023).
Managers need to shift their focus from the tiny fiefdom of their team to the needs of the organization as a whole, creating a “one for all” mentality. This requires a rethinking of how power is exercised – and how rewards are allocated – in a hierarchical organization. But how? Managers who have individual or team-level goals regarding talent development are incentivized to focus on keeping their “best” people, becoming territorial over their talents. This is often to the detriment of individuals’ career development, leads to a myopic view of who is a talent and hampers the organization’s ability to access its own talent.
Find concrete recommendations to support post-heroic leaders here!
How power is allocated in an organization determines how decisions are made – and whether the best ideas get heard and finally implemented. A hierarchical organization with a top-down leadership approach can display inertia and rigidity, making it difficult to adapt to changes in the external environment (Arnone & Stumpf, 2010). Why? Argues Esmee Arends, head of business transformation services at SAP: “Hierarchies stacked in too many layers are unhelpful, because they slow down decision making” (Arends, The Institute of Leadership). Conversely, embracing shared power enables organizations to unlock the full potential of their teams by hearing the voices of the employees who have their ears to the ground (Hieu, 2020).
Pyramidal and flat structures represent two extremes, one concentrating power at the top and the other evenly dispersing power among members. The trend toward flatter organizational structures emphasizes collaboration and requires understanding and fostering shared power for success. Distributing power on more shoulders instead of centralizing it in a small handful of people diminishes the dependency on a single individual. Decentralization facilitates quicker decision-making processes as there is no bottleneck caused by waiting for approval from a sole authority figure. Organizations have implemented practices that promote shared distribution of power, moving away from a hierarchical structure while showing that this change can still maintain effective decision-making processes (Bolden, 2011). This approach allows for a more democratic distribution of power within the organization while ensuring effective management (Schippers & Rus, 2021).
In case of urgency or emergency, or even in the absence or incapacity of the primary leader, advocating for shared power and decentralized decision-making is crucial to manage risks and safeguard the continuity and efficiency of business operations (Mizrak, 2024). For example, the dynamic environment of disasters makes it imperative to invest in inter-sector and inter-agency cooperation and coordination (Kapucu & Garayev, 2011).
The good news: Alternative decision-making models not only exist but are already in use in many companies!
In the last few years, “agile work” has been at the tip of everyone’s tongues. For roughly a century – since the days of Henry Ford and Frederick Taylor – companies have embraced the so-called “machine model”, built on the principles of scientific management. Effectiveness and efficiency was maximized through specialization and rigid hierarchical structures (Morgan, 1998). And yet, these “machine organizations” do not thrive as they used to; for example, fewer than 10 percent of the non-financial S&P 500 companies in 1983 remained in the S&P 500 in 2013 (Aronowitz et al., 2015). “Agile organizations” are seen as one response to an environment that evolves quickly, where disruptive technology is constantly introduced, where digitization and democratization of information are accelerating, and where there is a new war for talent (Aghina et al., 2018).
McKinsey describes the agile organization as an “organism”, characterized by a strong shared purpose across the organization, clear, flat structures with clear, accountable roles in a network of empowered teams, rapid decision and learning cycles, role mobility and shared and servant leadership, and evolving technology architecture, systems, and tools (McKinsey, 2018). Agile organizations or units also follow a project management approach that involves breaking the project into phases and emphasizes continuous collaboration and improvement. Teams follow a cycle of planning, executing, and evaluating, where responsibility and accountability are divided up and shared. In flatter and agile organizational structures, power is distributed among team members based on expertise and skills. Furthermore, empowering individuals to make decisions and take initiative also enhances job motivation and satisfaction (Modise, 2023; Tessem, 2014). While few organizations have achieved wide agility, many have started pursuing it in performance units. According to a McKinsey Quarterly survey, nearly one quarter of performance unit were agile as early as 2017! (Salo, 2017)
Within agile structures, the implementation of shared power can facilitate democratic decision-making processes. Decisions take into account the input and perspectives of all team members. This approach goes beyond ‘simply’ expanding leadership spans by reducing hierarchies; it fosters a collaborative environment where authority and responsibility are distributed across the team and can change hands over time, resulting in more equitable power dynamics.
This might sound scary – after all, as a manager, you have end responsibility for your team’s output — but empowering your teams isn’t about giving them free rein to do whatever they want. Collaboration is paramount in these environments, encouraging teamwork, idea-sharing and collective goal achievement. This also means continuously measuring whether and how goals are achieved, and how employees felt while doing so. Forming and managing an agile team is just another management challenge. Managers are essential in setting team tone, providing clarity of purpose, and establishing clear expectations.
The term top sharing or shared leadership refers to the sharing of a management function. This doesn’t have to mean two people sharing one role. Rather, shared leadership involves maximizing all of the human resources in an organization by empowering individuals and giving them an opportunity to take leadership positions in their areas of expertise (Goldsmith, 2010). Responsibilities and tasks are shared, and many decisions made jointly or in consultation. While there are some startup costs associated with implementing a top sharing model, there are crucial benefits.
At its best, top-sharing makes use of the combined best of leaders’ abilities (ibid). Top sharing provides a prime opportunity to increase leadership diversity. Different cultural backgrounds, different personalities, genders or generations of the “tandems” create different perspectives on the leadership role. The two managers can learn from each other both professionally and personally during their work, which continuously improves the quality of the work. When making decisions on important issues, they have both professional experience and expertise at their disposal in order to make the best possible decision. At the same time, the planning of substitutions is easily secured. Read more about implementing top sharing in last year’s GIR or learn from Vontobel’s best practice!
This approach not only addresses gender discrepancies in power dynamics but also fosters a more innovative, resilient, and sustainable business environment.
If companies have been championing inclusive leadership, they already have all the tools they need for their managers to successfully share power. After all: Inclusive leadership is about how leaders enable employees to flourish and bring their unique selves to the workplace but also empowers employees to feel a sense of autonomy and competence, and psychological safety (Shore et al., 2011; Hornung, 2023; Nishii, 2013). Refresh yourself on inclusive leadership practices here.
Find concrete recommendations on power-sharing here!
A wise man once said: “With great power comes great responsibility.” This includes the responsibility to reflect on one’s power and how one got it in the first place.
When reflecting on power, it is key to think beyond the “on paper” hierarchical position in the org chart and think more broadly about formal and informal power bases. Almost any manager, colleague, team member, etc. is in a position to hurt or judge others, embolden others, share or withhold key resources or information, etc. None of these require a specific position in a hierarchy; they are examples of referent power that comes from one’s ability to nurture relationships and others viewing you as a go-to source or influencer.
Every member of an organization has the responsibility to exemplify the values of inclusion and equity. But while everyone can have an impact, and thus some responsibility to exemplify the values of inclusion and equity, power and responsibility are still associated with one’s position in the organization. Leaders and managers have a particular and unique opportunity to role model inclusive behaviors in ways that set the tone and establish a clear expectation for performance. Thus, it is a key responsibility for leaders to both acknowledge their power and critically reflect on their own power.
A key part of this is reflecting on privilege (Jourdan, 2021). Why does privilege matter in a discussion on power? Privilege is about the benefits one receives from society’s existing power structures (Johnson, 2000). It means that certain parts of your background and demographic make-up have created advantages for you that others do not have (Jourdan, 2021). Specifically, when looking at gender privilege, we can see certain groups, such as cisgender White men, experience greater privilege in the workplace simply due to their gender (and regardless of power). Privilege eases the way to power – and acknowledging it and talking about it matters. Therefore, when discussing these concepts, it is important to do so from an intersectional lens in order to understand how other dimensions (such as race) may impact the privileges that one has in the workplace (Clark et al., 2017).
For those with privilege, it may be uncomfortable to recognize the truth about the advantages they have had. However, it is a necessary step to confront the systemic issues which afford both power and privilege. Becoming aware of privilege often involves actively listening to the experiences of those who come from marginalized groups and reflecting on one’s own position within existing power structures. Talking honestly and openly about one’s own privilege is a key leadership task. Lee Jourdan maintains that doing so “lowers defenses, demonstrates vulnerability, and sets the tone for inclusive behaviors” (Jourdan, 2021).
It’s crucial to recognize that meaningful change requires internal transformation and a departure from the status quo. This also requires action from those currently in power positions. It’s a paradox and partly explains why change does not occur, as those who conform to and support the existing understanding of power tend to ascend to these positions of power.
Find concrete recommendations on recognizing and leveraging privilege here!