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January 2, 2008
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The Robert E. Nolan Company is an operations and technology consulting firm specializing in the insurance industry. For over 30 years we have helped insurance companies redesign processes and apply technology to improve service, quality,
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Our staff members are all senior industry experts with 15+ years in the industry. Visit www.renolan.com to download our insurance industry studies, white papers, and client success stories.



Transformations and Perceptions of Power
By Steve Callahan, ChFC, CLU, FFSI, FLHC, FLMI/M
Senior Consultant
steve_callahan@renolan.com

Working with organizations undergoing transformation provides an excellent canvas upon which to watch the landscape of power being painted. Outside the formal authority of hierarchical power invested in managers lies the real world, where politics, ambition, initiative, and perhaps even manipulation come into play. It is interesting to note that while managers have authority, and certainly some power over individuals, their power has become rather limited in today's culture of predetermined salary ranges, preset average annual merits, "positive discipline" processes, inflexible budgets, and "feedback assessment" forms. What authority does a manager really have?

When you introduce the opportunity for change in a facilitated workshop with staff from all levels, it is interesting to watch the dynamics play out. Managers are typically quick to explain and defend: this is how we've always done it; here are all the reasons why trying to change this won't work; here are all the people who've tried to change it in the past millennium who have failed; and on and on. The managers are the ones who paint the worst-case scenario.

In managers' minds, they have no real power to change, only the responsibility to maintain the status quo. When a new process is proposed, they tend to voice opposition, naming all the people who would have to be involved and persuaded before the change could be made. And I have heard this position taken on items as mundane as the use of staples over paper clips and the color of a particular worksheet used in a workflow process. The manager actually did not feel he or she had the "power" to make these changes.

Now let's introduce the workers, who range from company veterans to new hires. In the workshop environment, when the personalities play out, workers fall into some interesting categories; however, focusing on the power dimension, what we typically have are risk-takers and victims. The victims' stories are very much like the managers': can't do it, here's why, here's who tried and failed, and besides, my manager (the one who feels powerless) will never agree to this change. And then, thank goodness, there are the risk-takers. Whether from some inner sense of confidence, a stronger self-esteem, being the first born in a large family, or some other reason, these folks are always willing to take a chance. Their perspective is more "let's just change it and see what happens." Although they do not have any formal authority or power to really be making changes, they have invested themselves with an informal sense of power based on their desire to make a change and a willingness to take a risk.

Working with these entrepreneurial spirits, we've been able to make changes in longstanding processes without so much as a committee review, often under the auspices of a "test." Frequently, the changes are made before any formal approval, and the results are used to validate the approval. Remember the colored worksheets? While the debate of using green versus pink raged on, one evening in a "midnight raid," every pink form disappeared. In their place the next morning was an equal number of green forms. Grumble, mumble, complain, and then move on—and the issue has been resolved. That kind of change, while mundane in nature, is an example of risk-taking that reveals the power assumed by the change agent. What gives them this sense of power while others wade in inhibitions?

What differentiates the long-tenured manager who is playing the victim role from the long-tenured junior employee willing to take the risk? The study of risk propensity and the underlying perceptions of power, and the ability to make a difference, get into the psychology of the individual. The important walk-away is that perception really does construct our reality, particularly in the realm of power. Being able to empower employees (manager or otherwise)—convincing them that they are capable of making a difference—is one leadership trait found outside the boundaries of formal authority, related more directly to charisma and influence. That is where the real transformations can be made.