Do a Personal Power Audit

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Michigan Ross Professor Maxim Sytch shows how informal power is the new currency in modern organizations.

How indispensable are you at work? How can you tell?

One way you won’t be able to tell is by looking at the organization chart. Companies operate less in vertical silos now and more like a matrix of interconnected groups. The ability to work across those groups defines your value, says Michigan Ross Professor Maxim Sytch.

His research on personal and business networks — and his work with companies across the globe — suggests that informal power is what makes a business leader, or any employee, effective. The way to measure your informal power and influence is to conduct a personal power audit.

Sytch

“One of the most typical traps people fall into is they let their immediate job description define their network,” says Sytch, professor of Management and Organizations. “Their contacts are mostly people they interact with by virtue of their job description. That can be very limiting for most people. Acting so narrowly prevents you from achieving that position of informal power and influence.”

The importance of influence and power in organizations and the power audit are key elements of the revamped Management of Managers Program from Ross Executive Education, next offered Nov. 9-13. Sytch worked with Michigan Ross Professor Lynn Wooten to restructure the program’s curriculum.

Sytch says it’s critical for people to take a step back and realize their place and value in their organization. While companies have changed how they’re structured and how they operate, ideas of strict hierarchy often remain entrenched.

Wooten

For example, Dell used to be internally organized around products, with executives largely responsible for a specific product line. Now the company pays more attention to customers and their needs, which tend to span many products. As a result, people are not developed and trained within a single group; rather, they’re expected to work across these silos. Similar changes are observed in virtually every business sector, including financial services, retail, and healthcare.

A quick power audit can give you a snapshot of your informal power and influence, and how much you’d be missed if you were to leave the company. You’ll also be able to see what can enable or constrain your influence.

To start, write down the names of your top 10 contacts. Think about why you put them on the list. Assign each a number on a 10-point scale based on how much value you receive from them in the broadest sense. This should include everything from help with work projects, finding resources for your team, and more personal things like advice and emotional support.

Now do the same in reverse — assign a number to the same kind of value you provide each of those contacts.

“If there are contacts in your network who provide you with a lot of value but you don’t give much back, chances are you are quite replaceable,” Sytch says. “The most beneficial relationships are ones with high mutual dependence, where you and your contact depend on each other to a significant degree. These relationships are not defined by pure economics and they’re not based on quid pro quo. They develop good vibrations that make them lasting, effective, and vibrant.”

The idea is to give people a sense of their worth in the organization, and where they might need to deliver more help and resources to others. This is an essential skill for business leaders who are judged on how well they mobilize stakeholders across the company, and even beyond the company in the case of joint ventures.

That’s why the Management of Managers Program was refreshed with new research-based learning.

Sytch adds a caveat to the power audit: Don’t exploit a relationship where you hold more influence for personal gain.

“If you find yourself highly influential in a relationship, it can be tempting to leverage that for your own gain to the detriment of your contacts,” Sytch says. “There are both moral and economic reasons not to do that. The moral reason is obvious, the economic one less so. Our research shows that when you abuse your informal power, you get a bigger slice of the pie but the overall size of the pie shrinks. The idea is to collaborate and create value. In contrast, when you abuse power, it diminishes the overall value created. In other words, you get a bigger share of the rapidly shrinking pie. So you often wind up with a net loss.”

But having that sense of where your influence lies is critical to accomplishing your goals, realizing your leadership capacity, and helping your organization perform effectively. Strategy often fails because you don’t have the informal power to execute it in your organization, Sytch says.

“It’s not enough to have a great strategy,” he says. “The strategy is worthless if you can’t execute it, and your ability to use your informal power and influence can be the deciding factor in whether the strategy translates into real organizational actions.”

Learn More about Management of Managers

Media Contact: michiganrosspr@umich.edu

Ross Thought In Action By Maxim Sytch
Maxim Sytch

Maxim Sytch

  • Michael R. and Mary Kay Hallman Fellow
  • Associate Professor of Management and Organizations