A Blog by Jonathan Low


Mar 29, 2015

The End of Power?

Power has become more diffuse and therefore more subtle. The old 'my way or the highway' approach is probably still the reality in many organizations, but it has to be effected with less obvious brutality.

Nowhere is this more evident than in the ways by which leaders seek to influence those around them: customers, employees, investors and public officials.

Mark Zuckerberg, CEO of Facebook, is generally seen as someone whose attitude towards the rights of his company's followers is, shall we say, casual, when he thinks about it all. The effects of  bad press on competition have forced him to pay more attention to the impact of his actions and statements, though the sincerity of these efforts has been questioned.

He has even started a book club - Oprah, we friend you! - and, as the following article explains, his first selection was a book about the end of power. The implication being that companies like Facebook are bringing that change about. That may or may not be true, but the fact that Zuck felt compelled to start a book club at all may be far stronger evidence of that trend than anyone else's writing. JL

Greg Satell comments in Digital Tonto:

The path to power no longer lies in commanding resources, but inspiring others to join your cause.  Power no longer resides at the top of hierarchies, but at the center of networks.
That makes power is easier to get, but harder to use or keep.  Leaders, take note
Mark Zuckerberg’s first selection for his book club, Moises Naím’s The End of Power, was an apt one.  The book, as the Facebook CEO put it, “explores how the world is shifting to give individual people more power that was traditionally only held by large governments, militaries and other organizations.”
That would also be a pretty good description of Facebook. We’ve seen social media tip the scales in everything from US political campaigns to revolutions that upended powerful dictatorships, like the Arab Spring and Euromaidan.  So, in that sense, the choice might seem self serving.
But, the title is a misnomer.  Naím does not argue that power has ceased to exist or even that individuals necessarily have more of it.  His central point, which he repeats several times throughout the book, is that “power is easier to gain, but harder to use or keep.”  That’s a different matter altogether and it points not to the end of power, but a change in its nature.

The Seeds Of The Shift

Naím’s argument is both comprehensive and complex.  He points out that the industrial revolution brought about massive increases in scale that resulted in organizational challenges.  Powerful bureaucracies arose to meet those new challenges and leaders at the top of institutional hierarchies gained unprecedented reach and influence.
Now, however, Naím sees three trends that are uprooting the influence that institutions wield:
The More Revolution:  Today, we are in the midst of a historic reduction of poverty and, as Naím points out, “When people are more numerous and living fuller lives, they become more difficult to control.”
The Mobility Revolution: People are not only richer, they are also moving around more. We are seeing unprecedented migration both between and within countries, exposing people to new ideas and new relationships, further diminishing the power of institutions.
The Mentality Revolution:  The rise of living standards and expanded mobility results in an increasing propensity to question the status quo.
While I don’t question Naîm’s facts (and he meticulously documents each point), I do question his interpretation of them.  A scholar writing a century ago would also have noted increases in living standards and mobility, with a corresponding shift in zeitgeist contributing to the rise in institutions, rather than in their diminishment.
What’s really changed is not power itself, but access to it.

From The Resource Economy To The Access Economy

The industrial revolution did indeed result in massive power shifts.  Yet in the past, changes in technology enabled institutions to project power.  Innovations like steam engines and the telegraph made it possible for governments and enterprises to coordinate resources on a massive scale.
Yet now the difference is that the most important resources are not made up of atoms, but bits.  A person of moderate means can have an idea in the morning, create a website for it, set up financing through crowdfunding and promote it on social media by lunchtime.  To do so requires no permission or approval from a gatekeeper, only an Internet connection.
So what’s really changed is that you don’t need to control a resource to make use of it. Further, while the roots of this shift are digital, we’re now seeing similar trends in other resources as well.  You can gain access to manufacturing, talent or even an ivy league education without ever going through a loan officer or an admissions department.
It is this shift from a resource economy to an access economy that has resulted in the rise of what Naím calls “micropowers,” which can exert influence not because of who they are or what they own, but what they represent and are able to connect to.

From Nodes To Networks

So here we see the fundamental shift.  In earlier times, leaders exerted influence through centralized control of resources.  Today, however, power lies in networks, not nodes.  A small group of passionate enthusiasts can connect to others that are like minded, who in turn can recruit still others to the cause.
It is this combination of small groups, loose connections and shared context that gives rise to the micropowers effect that Naím speaks of.  When relatively small actors synchronize their actions through networks, they can muster resources far greater than any organization, enterprise or government.  That’s how disruption happens.
At the same time, leaders and hierarchical bureaucracies are often hampered by the inertia that comes with owning and controlling resources.  Consider the case of Blockbuster.  Its leadership recognized the threat coming from Netflix, but the company was hampered by networks of physical stores, internal systems and franchisees that made change difficult.

The New Face of Power

Clearly, power has not ended.  If that was true, inclusion in Mark Zuckerberg’s book list wouldn’t result in a flurry of sales, nor would his company have access to over a billion people. However, what has changed is the role of leaders, how they attain power and how they wield it.
Take the case of the recent conflict in Ukraine.  While the Cold War lasted nearly half a century, Barack Obama was able destroy the Russian economy in a matter of months, not by invading it, but by isolating it.  Starved of access to global networks of finance, manufacturing and technology, Russia’s power was greatly diminished (although its aggressiveness has increased).
However, leaders must be careful not to overstep or they risk marginalizing themselves.  Mark Zuckerberg, for his part, must cater the privacy concerns of Facebook users or risk losing his influence over them.  At the same time, Barack Obama been reticent to take actions, such as a SWIFT ban, that might weaken his networks of influence.
So while we can take issue with various aspects of Naím’s narrative, his basic message rings true.  The path to power no longer lies in commanding resources, but inspiring others to join your cause.  Power no longer resides at the top of hierarchies, but at the center of networks.
That makes power is easier to get, but harder to use or keep.  Leaders, take note


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