We often note the power and influence that tends to exude from high quality leaders. However, the concept of power still remains incredibly vague. What do we mean by power? How does one achieve it? These are important questions that we must ask ourselves when examining the similarities and differences between leadership styles. Hughes, et al. (1993) describe power as the ability to produce an effect on others. Leadership power is directly related to the influential ability of an individual. It is worth noting that power can be achieved through several different ways. Hughes, et al. (1993) note that power is not only a result of the skills, traits and capabilities of a leader; followers and situational influences also play a significant role in the perceived power of a leader. I felt that it would be interesting to examine a current business executive to display a few of the endless variables that highlight leadership power. As a former employee of the financial industry, Kenneth Griffin, founder and chief executive of Citadel – a global investment corporation – distinctly embodies the power and influence required to succeed in finance.
Ken Griffin is easily among the most recognizable figures in the financial industry. Having built one of the most successful hedge funds to date, Griffin commands respect among his peers. Citadel, the firm that Griffin founded from his dorm room at Harvard University, manages well over $24 billion (Business Insider, 2017). Having received a degree in economics from perhaps the most famous American University, Ken Griffin conveys a high degree of expert power. Nowadays, the financial industry is filled with individuals with varying levels of expert power. Given the growing size of Citadel – in terms of AUM and global reach – many experts gravitate to Griffin due to his perceived knowledge of the investment industry. When exploring the expert power of many corporate leaders, the results appear to be mixed; some have it, while many have lost it. Perhaps this is why many individuals falter in the financial industry. Hughes, et al. (1993) describe the importance of a leader’s persistence and ability to ask questions. Leaders should continue to expand their understanding of the organization that they oversee, including the underlying day to day processes (Hughes et al., 1993).
But what happens when an organization becomes too large for the leader? Unfortunately, this is a common occurrence and complaint on behalf of followers at corporate establishments. When an organization becomes too large for a single leader’s oversight, the responsibility shifts down towards lower-level executives. Corporate growth has the capability to shift power from chief executives to the directors that serve below them. First, it should be noted that as companies grow in size, leaders may find it no longer necessary to understand the menial tasks of the organization. As citadel quickly transitioned into an incredibly high-tech, financial organization, the need for Ken Griffin to understand every aspect of his business disappeared. Today, Citadel relies on the expertise of the best and brightest. The firm notes their desire to hire the smartest individuals, from elite world university (Business Insider, 2015). Competitive applicants often have advanced degrees in mathematics, physics and engineering. Does this change in employee intellect allow Griffin the opportunity to pass the leadership baton? Most corporate leaders would unarguably agree.
The concept of referent power is extremely relevant in this situation. Just as many leaders appear to lose their expert power as the company grows, they also may see their employee relationships slip away. Hughes et al. (1993) state that leaders who remain visible and accessible may develop more power in the eyes of their followers. In the case of Citadel – or any large financial institution – corporate leaders are often rarely seen. The companies that were founded with a visible leadership presence are artifacts of the past. Hughes, et al. (1993) reference an example regarding the hiring process; they remind readers of the historic saying “it’s not what you know, it’s who you know.” Leaders who can make things happen for their employees can achieve a significant level of referent power (Hughes, et al., 1993). In the modern corporate structure that involves managers, managing directors and several c-level executives, does Griffin still have the ability to maintain relationships with his employees? Corporate growth may change the structure of an organization leaving leaders with a difficult set of decisions. They now must weigh the benefits of giving up their power and managing with a big picture perspective, or dedicating their career to constant reeducation and relationship building.
References
Business Insider. (2015). It’s easier to get into Harvard than it is to get a job at this hedge fund. Retrieved from http://www.businessinsider.com/ken-griffin-on-hiring-at-citadel-2015-11
Business Insider. (2017). Meet the world’s 7 most successful hedge fund managers. Retrieved from http://www.businessinsider.com/best-hedge-fund-managers-2017-2/#7-och-ziff-daniel-och-1
Hughes, R., et al. (1993). Power and Influence. Leadership. Enhancing the Lessons of Experience. Homewood, IL. Irwin. 0256103783. Ch. 5. pp. 107-131.