Powerful organizations drive sustainable growth—healthy growth that lasts. But how does an organization become powerful, and what does power really mean?
We love to list and rank the powerful. My friend Stefan Swanepoel just released a list of the 200 most powerful people in U.S. real estate. Other lists include the world’s most powerful people, the world’s most powerful brands, and the world’s most powerful countries.
But you won’t find many lists or ranking criteria for powerful companies or organizations. Instead, companies measure other attributes, like the world’s largest companies and the world’s most admired companies.
There are three reasons why rankers have stayed away from attempting to list and rank truly powerful organizations.
First, there is confusion around the definition of power. Too often the word power is used as a synonym for authority or the ability to control a market. In fact, powerful entities are more accurately defined by the exceptional and ever-increasing levels of ability, influence, and energy that enable that authority or (perceived) control.
Second, power is often confused with the prerequisites for power created when management builds effective, integrated strategies in six areas—customer, competition, financial capital, cost, community, and climate. Each strategy must include specific plans and measurable objectives. While critical to establish a powerful organization, successful strategies in each of these areas simply create the conditions for true power.
Finally and most critically, the core of an organization’s power is solely found in its people, and their ability, influence, and energy. As Jim Collins offered in his book Good To Great, “First who, then what.”
The ability to assess or measure the human capital in any organization continues to be the limiting factor in ranking powerful organizations in the world.
So, how do organizations become powerful?
Leaders build strategies and deploy plans in the six areas above AND the following areas below:
Measure and improve employee engagement; ensure diversity and gender-balanced leadership; consistently assess, improve, and expand employee “hard and soft” skillsets; add new skillsets when necessary; align team members around a values-based vision for the future; and build a change-adaptive culture to meet accelerating changes in market needs tied to management’s strategic decisions.
Those organizations that come closest to these targets are the most powerful organizations.
There is no limit on organizational power because there is no limit on the power of human capital.
Building powerful organizations is what I do.