Published in the San Diego Union-Tribune, June 8, 2020
I am fascinated by “power.”
Who has it, how do you get it, how do you use it, when do you lose it, is it used for good or evil or personal gain? And, for sure, very few people willingly cede it to someone else. Mostly, it ends up being ripped from your hands.
What I see is that most entrepreneurs start their company with a co-founder. They agree they will work together, brothers in arms, and they will split the company 50-50. That is the first big mistake. Trust me on this one. The consensus of a hundred studies is that you can pick any split you want, among any number of founders, but equal is almost always wrong. That is because inevitably, the real decision power will evolve to one person. And from loss of power comes resentment followed by anger and divorce, either self-imposed or from the board.
As Honest Abe once said, “A house divided against itself cannot stand.” And in any house, after a while, either the person doing the dishes or the person working 80 hours at the law firm, is going to lean into some unhappiness. Just like Zuckerberg, Saverin and Winklevoss, sometimes the only way to cut the Gordian knot is in a courtroom.
I have a client who has a partner. They are equal, one is old, the other is young, they own lots of houses together, the original agreement is two pages. And now the young Turk wants to refinance and expand, the older gentleman likes no mortgages and lots of cash flow. But they have no buy-sell, and they are equal partners. Please meet my favorite attorney, Litigation Louie. I assure you; he will make out better in the end than either partner.
So, let’s look at a new book, “Acting with Power, Why We Are More Powerful Than We Believe,” by Stanford professor Deborah Gruenfeld. She makes the baseline case that power is not how you feel, but rather that “your power depends on other people’s feelings.” She contends those feelings are rooted in part by fear, obligation, respect or trust. In other words, you don’t take power, you are given power by others. She says, “Power is granted.”
Somewhat like Metcalfe’s law, power is relational and increases based on the number of other people in the network. And one of the primary obligations of power is to provide “protection.” A primary role for the CEO is to take care of the team, support group goals, and honor the investors. Just as in the animal world, the leader of the team needs to provide protection. But your power is specific to the members and it often doesn’t travel well. When I was the CEO and went home to my family each night after work, all that power disappeared and I resumed my primary role of chief cook and bottle washer.
Gruenfeld hits on a biggie when she discusses the tension between the “need to look powerful and in control vs. the feelings of powerlessness that arise from our childhood insecurities.” The imposter syndrome can often rear its ugly head here. Gruenfeld says that the idea of “authentic” is often expressed in terms of showing one’s vulnerabilities, but that the more proper use of power should be to “make others feel secure, even if that requires being tougher and less tolerant.”
She supports “role-playing” for the leader, as a way to not show their own fears. I advise some caution here. No one likes to be fooled. A client of mine sits on a board that appointed a new CEO. They assumed they knew how he would act, only to find that the three letters went to his head, and he mighty morphed into a personal command and control power ranger. Titles can be dangerous. They confer power, but they don’t always teach how to use it. It’s like going from a water pistol to an AK-47 without an instruction manual.
Gruenfeld believes that powerful players need to project “I’ve got this.” Think 1.3 seconds on the clock, down by one, no problem — give the ball to Michael Jordan. Actors know their lines, their entrances and their exits, but sometimes the lights go out in the arena because of a power failure.
Rule No. 661: You can’t fake finding an electrician.