CREATING RESOURCES

Over the years, I have come to marvel at the skill of those who can create resources virtually out of thin air. The key to this skill seems to be the ability to recognize the fundamental things that people in a given situation want and need, and then to create a resource that will give one access to and control over them. There are many examples of this ability, but perhaps none so strikingly illustrates the capacity to make something out of nothing as Lyndon Johnson’s development and use of the Little Congress.

When Johnson arrived in Washington in 1931 as Congressman Richard Kleberg’s secretary, the Little Congress was almost worthless:

But Lyndon Johnson saw in it an opportunity. The press corps was eager to get advance information on how the major issues of the day were to be decided. This was, after all, the depths of the Great Depression, and much important legislation was being considered. Politicians, of course, coveted press coverage and exposure. Congressional secretaries, although not all as ambitious and aggressive as Johnson, did frequently seek advancement and prestige.

First, Johnson got himself elected Speaker of the Little Congress. It was an organization in which few were interested anyway, and he packed the election meeting with his allies and won the vote. Once elected, he transformed the Little Congress, and his position as Speaker, into a much more important resource. He changed the monthly meetings to a schedule of once a week, and altered the format to include not only debates on the issues, but also speeches by “prominent figures.”³ In extending invitations to speak, Johnson could offer access to prominent politicians, and more important, he had an excuse to talk to them himself. He organized formal debates on bills, lined up speakers on both sides, ran the debates according to the rules of the House, took straw votes on the bills at the end, and invited the press to cover the debates. The press soon figured out that the debates offered previews of congressional positions on the issues. Once the press came, it was easy to get congressmen to come, and to have more and more people interested in participating in the organization.

The Little Congress became, under Johnson, an important resource and the beginning of his substantial power base. Yet it was a highly unlikely position from which to obtain this leverage. Johnson recognized that the press wanted information and access, the politicians wanted coverage, and the aides wanted publicity and a sense of being part of the action. He figured out a way to use the vehicle of the Little Congress so that he could reap the publicity and the benefits, and still provide each group what it wanted.

And how could Robert Moses, beginning as a parks commissioner, amass such influence? First, he accumulated positions that often initially appeared to be of little importance. In the years after World War II, Moses held the following posts, often simultaneously: 1) chairman of the New York State Council of Parks; 2) president of the Long Island State Park Commission; 3) chairman of the Jones Beach Parkway Authority; 4) chairman of the Bethpage Park Authority; 5) commissioner of the New York City Department of Parks; 6) member of the New York City Planning Commission; 7) chairman of the Triborough Bridge and Tunnel Authority; 8) construction coordinator for the City of New York; 9) chairman of the New York State Power Authority; 10) president of the 1964—1965 World’s Fair; 11) director of the Lincoln Center Area Development Project; and 12) chairman of the Federal Title I Housing Program. Each job entailed building, and building involved getting contracts for the actual construction, the purchase of insurance policies and performance bonds, and the use of legal services and banking services—in short, the expenditure of a vast amount of public money. Moreover, Moses’s inside knowledge of where roads were to be located, and where slum clearance was to take place, could make entrepreneurs rich if he passed it along to them. During his career, Moses traded both information and contracts not for money for himself—he died with a very small estate—but rather, for power. The thousands of union members, construction firms, legal firms, and bankers dependent on his largesse constituted an army of people more than willing to do his bidding. And at least some of his positions, such as the Triborough Bridge job, brought him direct control over resources—the tolls from the bridges and tunnels, and also the bonding authority that he used to obtain large amounts of debt. Because Moses held so many different positions, with so many different sources of power, people were reluctant to fight him in any one place, knowing he could exact retribution in some other arena. Moses’s genius was in seeing the opportunity to control the expenditure of enormous sums of money through parks, roads, and bridges, and in using these development resources to obtain a degree of power almost unparalleled in public life.

The parks department and the Little Congress shared some things in common. At the time they were used to build power, they were political backwaters, which attracted almost no interest from powerful individuals. In product markets, an effective strategy is often to go where the competition isn’t. In political markets, the same principle holds: begin by building a power base in a niche that is largely uncontested. Then, having obtained a position of influence in an organization, figure out how to use that organization to obtain resources that are more consequential and substantial. This requires determining how to create resources and to make others dependent on you for things that they need.

Similar processes occur in business firms. To an uninformed observer, it is not obvious that finance should be the most important function in a company that makes automobiles. After all, finance does not design or engineer the cars, solve problems in their manufacture, or distribute and sell them. And, indeed, the dominance of finance has scarcely been healthy for either Ford or General Motors.⁵ Finance came to power in both companies because that function was able to first gain control over the planning, capital budgeting, and operations research processes, and then convince others that these were the critical functions in the operation of the company. After Ford went public in the 1950s, and after antitrust action, also in the 1950s, forced Du Pont to sell off its substantial equity stake in General Motors, finance argued that the companies needed to cultivate the investment community in order to attract outside capital and maintain the stock price of the firms.

Resources can be almost anything that is perceived as valuable—from building contracts to press exposure to control over systems and analysis. When Xerox faced product introduction delays, quality problems, and substantial budget overruns, the response was to institute more planning, more budgets, more reviews, and more schedules. Each of these processes was controlled by finance or by those with financial backgrounds.⁶ At Burgmaster Machine Tools, difficulty in building machine tools that sold well at a good price and problems in meeting delivery dates were attacked with elaborate material planning systems and cost control systems. ⁷ These systems were designed and implemented by people who, for the most part, had never built a machine tool or run a factory, and the systems, at least in this instance, seemed to do more harm than good. However, the ability to find an external constituency interested in the particular resource helped transform something comparatively unimportant—budgets, systems, and planning reviews, not the product being manufactured and sold—into a critical resource. And this transformation gave enormous leverage to those who controlled the resource.

CONTROL OF RESOURCE ALLOCATION AND USE

Jurisdiction over resources is an important source of power, but only to the extent that one actually controls the resource and its use. For instance, one seldom sees the commissioner of Social Security listed as one of the most powerful government officials in the United States. Yet the Social Security tax is a major source of federal revenue, the Social Security trust fund and the question of financing future benefits is a major item on the public agenda, and perhaps most significant, expenditures on Social Security constitute one of the largest items in the federal budget. To offer another example, in 1984 and even in 1985, most of Apple Computer’s sales and profits came from the division that made the Apple II. Nevertheless, the Macintosh division was far more powerful than the Apple II unit, which experienced substantial turnover because of its lack of power and respect in the organization. And in many organizations, personnel costs constitute a major portion of the expenses, but it is rare that either payroll or human resources is the most powerful unit.

In each instance, what makes the unit relatively powerless is its lack of control over the resources that it oversees. Social Security pays benefits according to formulas set by law, and although the commissioner operates a large bureaucracy, it is an organization with little discretion over the vast sums of money that pass through it. Similarly, payroll and human resources often have little control over the expenditures on salaries, and the Apple II division did not choose to develop and exercise, if it could, control over the sales and profits of that machine. For resources to be a source of power, several conditions must be met, but control over them is one of the most fundamental. There are several bases for controlling a resource:

Because it is so important to control, and not merely to possess, resources in order to obtain power, there is often a great deal of hue and cry in organizations about the right to exercise discretion over resources. In the early days of large-scale U.S. firms, foremen had the power to hire and fire without review, and often to set wages arbitrarily as well. Their control over a very important resource—jobs—was used to favor friends and relatives and to extract, on occasion, bribes and other favors from individuals who sought good jobs or good wages. The workers often felt that the foreman was arbitrary and capricious in the exercise of this power, and their resentment stimulated attempts to organize unions and other forms of countervailing power.⁹ The owners, on the other hand, were concerned that the foremen were not necessarily exercising their discretion in the best interests of the organization. The sale of jobs and high wages profited the foremen but it left the firm with workers who were not necessarily well trained or well motivated. This concern led to the development of personnel policies and personnel professionals to formulate and administer rules and regulations that would delimit the discretion of lower-level supervisors. ¹⁰ Even to the present day, many labor disputes center around discretion over work assignments—such as contracting out—and disciplinary issues. The evolution of this so-called bureaucratic control gave workers more security and stability in their work life and owners more effective control over the enterprise, but it was initially resisted by the foremen, who did not want to lose their special privileges. Today foremen are caught in the middle between owners and workers, and they earn comparatively less money than they did in the late 1800s.

Civil service regulations make it more difficult for politicians to obtain jobs for their friends or to dispense patronage as a way of building a network of obligations. It is not surprising, therefore, that the imposition of formalized hiring procedures is often resisted mightily, both in government and in private organizations, by those who will, under these systems, lose discretion over the important resource of jobs. For many years, the postmaster general of the United States was one of the most powerful officials in government. The Post Office was (and is) one of the largest government employers, today employing more than 750,000 workers. When postal jobs were controlled by patronage, the resources of the person who controlled that agency were enormous, and the position possessed tremendous power.

The control of physical space is another resource that can confer great power. Facilities people in corporations often are not powerful in a formal, organization chart sense, but they frequently exercise enormous influence because of their control over large building budgets and the allocation and use of facilities. I know of one organization that decided to lower costs by moving many of its administrative activities out of San Francisco to the suburbs. Of course, it wanted to retain its corporate headquarters, its signature, in downtown San Francisco. When the time came for the move, it turned out that not all of the departments slated to remain in San Francisco would actually fit in the headquarters building. The facilities people played a major role in deciding which functions would be located in that building, and which would be consigned to leased space elsewhere in the city.

The use of control over physical space to develop power is nicely illustrated by the actions Jim Wright took when he became Speaker of the House of Representatives in 1986.¹¹ “Wright’s first step was to take physical possession of his surroundings.”¹² The Speaker of the House directly or indirectly controlled the House side of the Capitol, having discretion over every room, hallway, and closet contained in it, along with five office buildings on Capitol Hill.

Previous Speakers had not exercised control over all of this space, but determined to increase his power, Wright decided that he would. He took space formerly occupied by the whip’s office and “moved into it the staff of the Democratic Steering and Policy Committee, staff who answered to him and who . . . had occupied space a quarter of a mile away.”¹⁴ Wright also took space from the Rules Committee—in short, he made sure that his subordinates and the functions he controlled occupied the space nearest the House chamber. He would use the resource of physical space to build his power:

As Long Island State Park Commissioner during Al Smith’s governorship of New York state, Moses controlled many resources other than those that were officially within his jurisdiction. For instance, he was able to exercise some control over employees of other agencies, because of Smith’s support of his park projects. As a state official, he had access to the power and resources of the state, particularly legal resources. One of the reasons he was often able to prevail in his legal battles with those who challenged his plans was that he could delay and fight interminably, since the funds to pay legal fees were state funds, not his own. On the other side, fighting him required the expenditure of personal resources, and eventually his opponents tired of the battle and gave up. What is critical about resources, then, is to have effective control over them, and this control is not always perfectly correlated either with ownership or with official responsibilities. Moreover, those who are most effective in developing and exercising power are sensitive to what resources they do control, and use them vigorously in their efforts to get things done.

Power is vested in us by the dependence of others, and that dependence is a function of how much others need what we control, as well as how many alternative sources for that resource there are. ¹⁶ Thus, another strategy for developing power is to ensure that there are no alternative ways of obtaining access to valuable resources we control. For instance, in the past, the data processing department in many corporations had tremendous power because of its influence over computing and information systems. When accounting and data bases were lodged on mainframe computers, and when operations and access to those computing resources were centrally controlled, the data processing department was critical, particularly in firms in which data processing and data base management were important to success. With the advent of distributed computing power, through personal computers and networks, the power of the central data processing department decreased. This is why central data processing units initially did not welcome personal computers and why, when PCs were forced on them, they tried to maintain control over the acquisition of both hardware and software. A similar phenomenon occurred in reprographic departments, when smaller, less expensive copiers diminished the importance and the power of central copying units. Note that computing or copying is not less critical than before, but rather, changes in technology now provide alternative ways of accomplishing the task without relying on the central unit that formerly controlled the function.

HOW RESOURCES BECOME IMPORTANT

We have already noted that the way to gain power is not only to obtain control of a resource, but also to make the resources that one controls more important. In understanding the importance of resources to organizations, the politics of budgeting and the social psychology of commitment are fundamental ideas. For instance, they help us explain how a small amount of money, strategically applied, can be used to generate effective control over much larger resource pools.

Budgets are incremental. The best predictor of this year’s budget is last year’s, a finding replicated in arenas ranging from the national budget to university budgets ¹⁷Indeed, the power of precedent is so great that it leads to some strange organizational anomalies. For instance, in most organizations, departments are allocated a budget for salary increases, usually a percentage of their current salary base. Within that budget constraint, raises are then allocated to the various department members. What if the organization’s allowance for raises is not sufficient to reward all of the outstanding performers in a given department? In many instances, the salary raise constraint is a binding one. However, when you recruit someone from outside the organization, you are normally given permission to meet competing offers, particularly the salary paid by the individual’s last employer. Although the department may have some total budget constraint, this is less frequently the case, and is often less binding. Thus, a department that could not pay its members a given level of salary if they had to be granted raises, could pay replacements an even higher salary, as long as they were hired from outside and paid competitively with market rates. On the one hand, this looks as though organizations are somehow perversely more concerned with attracting people than retaining them. And this conclusion is probably true in part. But it is also the case that budgets are viewed incrementally, and somehow a raise of 10% seems worse than the same amount of money when it is spent to recruit new people from outside the organization. Because of the power of precedent, it becomes quite important to argue about what is and what is not in the budget base (as opposed to a temporary bonus, one-time allocation, and so forth), and because of the power of compound interest, getting one’s base augmented on a consistent basis is critical.

For our purposes, what is important is that each unit in an organization considers its current base to be the minimum that it would find acceptable. Kahneman and Tversky’s work on risk and decision making shows that a decrease from the current base would be viewed as a loss, and an increase would be viewed as a gain.¹⁸ Moreover, their work shows that a loss of a given amount is viewed as twice as painful as a gain of the same amount. Gains and losses are not viewed symmetrically, and consequently, it is very difficult to reallocate resources, since it means taking them away from those that now enjoy them. Therefore, often the only way to provide incremental resources for new activities is to bring new resources, above and beyond what everyone already expects, into the system. Another way of saying this is to note that it is much easier to add than to subtract—and this is true whether we are talking about salary, staffing, or budgets.

What this observation implies is that the most precious resource in any organization is an incremental resource, not already spoken for, that can then be used to solve the organization’s current problems-problems that are more difficult to address using the current resources because of the conflict involved in reallocation. In studying power in universities, I have repeatedly found that governmental grants are one of the best predictors of departmental power, particularly in public universities.¹⁹ This is the case even in organizations in which grants and contracts represent a small proportion of the total budget, compared, for instance, to state appropriations or tuition revenue. The reason that grants and contracts are so crucial is that they carry overhead—a “tax” that the central administration extracts before passing the rest of the funds along to the principal investigator to perform his or her research. These overhead funds are, of course, discretionary. They are available for redistribution to other units and therefore constitute an important source of organizational slack. For much the same reason, universities prize unrestricted donations more highly than funds earmarked for a specific purpose. Unrestricted donations are available for new initiatives at the discretion of those who have control over the funds. Most universities would prefer that such discretion reside in the administration rather than in an outside organization or even in a department within the university. The best source of unrestricted funds is endowment funds, particularly funds provided by a will or trust. Endowment, once given, provides a capital base, which is no longer under the control of the donor; funds from deceased donors are even more desirable, since they are less likely to be monitored.

It is, therefore, quite possible to control, or substantially affect, the operations of a much larger entity, as long as one possesses discretionary control over a source of incremental resources. Before providing some examples of this, we need to understand the second feature of resource expenditures—their committing properties. What was once a luxury soon becomes a necessity, as most of us learned long ago in our personal lives. The same principle applies in organizations. An incremental source of funds will, initially, be perceived as a wonderful bonus, permitting, perhaps, the purchase of additional equipment, the hiring of more staff, the undertaking of new activities, the expansion of opportunities that were heretofore only dimly contemplated. But soon—very soon, indeed—these funds and the new equipment, staff, activities, and initiatives become viewed as the bare necessities of life, without which the organization could not possibly survive. The organization becomes, if you will, addicted to them. Thus, the person or organization offering the incremental resources can obtain tremendous power over the organization to which they have been allocated; this power holds as long as the resources remain truly in the discretionary control of the other.

Two examples, one academic and one corporate, provide compelling illustrations of this point. The university example concerns the leverage that the federal government has exercised over the relative size and development of various academic disciplines. At a university such as Stanford, which is heavily research-oriented, tuition accounts for about 50% of the annual operating budget, and income from endowment and annual giving supports another 20%—30%, depending on the year. Only about a quarter of the budget derives from federal grants and contracts, with overhead providing, obviously, an even smaller proportion of the budget. At most other universities, the contribution of federal research to the annual operating budget is substantially lower, and for many universities, there is no significant research component in the budget at all. But, as researchers noted some time ago, there is evidence that internal allocations of discretionary resources exacerbate, rather than diminish, funding inequalities created by the government’s comparatively greater support of certain physical sciences (particularly those in which research may be defense-oriented) over social and other physical sciences.²⁰ Moreover, this effect occurs even in universities that receive almost no federal funds. DiMaggio and Powell use the phrase mimetic isomorphism-a fancy term for imitation or copying—to describe how, in institutionalized environments in which objective criteria are often absent, organizations decide what to do by following each other.²¹ Large, prestigious, research-oriented universities provide visible models for others to follow, and consequently, federal funding—a tiny proportion of total expenditures on higher education—exerts a disproportionate influence both on internal funding priorities and indeed on the very development and research topics chosen in numerous academic specialties.

And the influence does not stop there. Initially, the federal government viewed its support of academic research as a way of developing and building research capabilities at universities and, therefore, the technology base of the society. Over time, the purchase of research has come to be viewed in the same way as the purchase of any other supply from an outside source. It is seen as a procurement problem, with the goal being to purchase a given quality and quantity of scientific research at the least possible cost. As a consequence, the National Science Foundation began to cap the amount of salary their grants would reimburse at the level of about $75,000 per year, and federal agencies negotiated intensely over the indirect cost recovery rate, or the overhead rate, that could be applied to grants and contracts. The first limit provides an extra incentive for the university to restrict professors’ salaries. The second intervention provides strong inducements for universities to cut their administrative overhead dramatically. Thus, Stanford, in the spring of 1990, announced a $22 million budget-cutting program (from a base budget of about $175 million), in response to concerns over its rising indirect cost recovery rate. The faculty had complained that the overhead rate, set by the university and added automatically to all contracts and grants submitted from the university, was hurting the competition for research funds.

I am no fan of administrative overhead, and I have often noted that, while student enrollments have remained constant and faculty size has grown in small amounts, administration has increased dramatically. What is most interesting about this move, however, is not that someone finally became concerned about the size of the administrative component at colleges and universities, but rather, that federal government pressure, exerted through the indirect cost recovery rate negotiations, finally caused Stanford (and numerous other universities) to restructure and reorganize their internal administration, at some points cutting activities such as student services in response. A tremendous amount of leverage, albeit often indirect, is exerted over the operations and budgeting of major institutions through the discretionary control of a comparatively small proportion of the total budget.

For the corporate example, consider the case of OPM Leasing Services. Robert Gandossy wrote a book describing the substantial fraud perpetrated by Myron Goodman and Mordecai Weissman of OPM Leasing.²² OPM (which stands for Other People’s Money) was a computer leasing firm that was, according to records, not profitable virtually from its inception. At the time the frauds were uncovered (they included obtaining financing from multiple banks to cover the purchase of the same computer under the same lease, and representing leases prepared by OPM as being prepared by actual lessors of computer equipment), “OPM was accused of fraud amounting to over $200 million by nineteen financial institutions and several of their customers. Another $100 million was owed to others stemming from the bankruptcy.”²³ One naturally wonders how such a questionable institution was able to exert substantial leverage over its accountants, its investment bankers (which included Lehman Brothers and Goldman, Sachs), and even its customers, such as Rockwell International. These associations were absolutely essential for OPM’s legitimacy, and consequently, for its continued ability both to stay in operation and to continue to engage in fraudulent transactions.

In each instance, the pattern was the same—dependence was created gradually, and it capitalized on some vulnerability in the other organization. For instance, when OPM approached Goldman, Sachs in 1975 to handle the placement of its debt for computer leasing, Goldman and the entire investment banking industry were in the middle of a substantial transformation.²⁴ In 1973, the investment banking industry had lost $50 million, and the traditional emphasis on securities sales and trading was rapidly shifting to mergers and acquisitions, real estate deals, and private placements. Between October 1975 and March 1978, “Goldman, Sachs received nearly $2.4 million in fees from OPM and . . . it became one of the investment banker’s largest private placement customers.”²⁵ What began as a single transaction developed into a relationship that provided OPM’s investment banker with substantial revenues in an important new area where it was trying to grow.

A similar picture emerges when OPM’s accounting relationships are examined. Their initial accountant, Rashba and Pokart, had discovered fraudulent leases and had refused to issue a certified financial report for 1974. OPM then went to Fox and Company, the eleventh-largest accounting firm in the United States. “Myron’s preference at that point was that he wanted to be . . . a big fish in a little pond. . . . So, it had to be a medium-sized firm, a firm a little below the ‘Big 8.’ ”²⁶ In other words, OPM sought a firm that was large enough to provide respectability, but small enough so that the auditing fees would be a substantial portion of its business, creating, over time, dependence and a willingness to not examine transactions too diligently. From 1976 until 1981, Fox collected over $1 million in fees from OPM, “and the leasing company became one of its largest New York clients.”²⁷

Perhaps the most dramatic instance of building dependence occurred with one of OPM’s largest customers, Rockwell International. The company was created through the merger of Rockwell Manufacturing and North American Aviation in the early 1970s, and afterwards it engaged in a typical post-merger program of cutting costs. Computer costs were a substantial item in the budget, because the company’s aerospace business made heavy use of computers, for instance, on the B-₁ bomber. Within Rockwell, Sydney Hasin had been appointed to examine the firm’s computer procurement practices. He had recently been demoted and had his salary cut because of his poor performance in an information systems subsidiary, so he was looking for a way to recover his stature in the company. He recommended computer leasing rather than purchase as a way to save costs, and OPM made him deals that seemed too good to be true. OPM wrote leases that could be cancelled with 30 days’ notice, with the standard seven- to eight-year term specified to keep payments low, on equipment that was going to be obsolete in a year or less as IBM introduced a new line of computers. “In a memo, Hasin wrote that the leases with OPM represented savings to Rockwell of $760,000 over the bid of the nearest competitor . . . and savings of nearly $2.5 million, compared to the equivalent IBM rental over the project period.”²⁸ Hasin was handsomely rewarded for his good work, obtaining more and more responsibility for Rockwell’s computer operations. The problem was that in a lease transaction the lessor provides the ultimate security:

Gandossy argued that one of the reasons OPM succeeded in perpetrating fraud on such a large scale and for so long was because the 1970S were difficult for business. “The firms in OPM’s orbit were greatly affected by the troubled economy, and their growing dependence on the leasing firm caused them to interpret events favorably, neutrally, or even to look the other way.”³⁰ In each instance, the dependence was built incrementally, but once in place, it was, like an addiction, almost impossible to conquer.

Although our previous two examples have focused on dependencies built across organizational boundaries, many of the same principles apply to the building of resource dependence within organizations. Staff groups, such as corporate planning, internal consulting, or, most commonly, accounting and information systems, offer services without internal recharging and help on projects of various types. Over time, dependence on these internal resources grows, and the units involved obtain power over the clients, just as OPM obtained power over the firms that became dependent on it.

Consider how, in a corporation such as Xerox, research obtains power over new product development efforts. Research units often have more discretionary or slack resources than marketing or development groups, which are constrained by continuing projects. Some development groups at Xerox were committed to specific projects as much as two years in advance. This makes it difficult for such groups to take on new projects on short notice, without getting additional resource support. Efforts to persuade research units to invest discretionary funds in co-development projects may thus be less an attempt to collaborate with research than an attempt to obtain funding for tasks that the development groups could not otherwise undertake. By providing the research units with discretionary funds, the corporation forces other units to involve research more closely in the development and marketing activities.

IMPLICATIONS FOR ACQUIRING POWER

The ideas and examples considered thus far have fairly clear implications for obtaining power and influence in organizational settings. First, the control over resources is crucial, and obviously the New Golden Rule gives enormous power to those units and individuals that control budgets and other substantial resources. A study of faculty salaries found that individuals who brought in grants and contracts both earned higher salaries and received more economic returns for their research productivity than those who did not have outside funding.³¹ These effects held even when numerous other determinants of salaries were controlled, which indicates that the ability to bring in resources provides an independent and important source of power.

However, it is often possible to develop and exercise power by finding unexploited resource domains. Rather than contending over budget authority, power might be acquired by developing operative control over facilities, equipment, time and schedules, or other potential resources even less visible. In other words, power can often be increased by finding underutilized resources and exploiting them.

Resources are useful in the development and exercise of influence only to the extent one has discretion over them, and only to the extent that the dependence of others can be developed. The latter step often requires building commitments incrementally, and understanding how the opportunities with which one begins can be developed to provide resources that are crucial to the major actors one is seeking to influence. In this effort, the skills required are the ability to understand what is important to various constituencies, what currently underexploited resources are available to be mustered, and how to build dependencies.

From the other side of the equation, one can use these ideas to avoid becoming dependent on resources in the control of someone who may be untrustworthy and to be aware of the leverage that others may be developing. Dependence is inevitable in social life and certainly in organizations; social interaction always involves looking to others for advice, information, and other resources. But by paying attention to patterns of dependence and to the potential agendas of those who have power, one can at least avoid being surprised by power plays.

ALLIES

One of the most important resources that any member of an organization can have is allies or supporters. Organizations are frequently large, interdependent, and complex systems, in which it is difficult to get things done by yourself. It is essential to have loyal, trusted supporters to help carry out your plans. Although this may appear obvious, I often see managers at all levels who overlook the importance of coalitions of support and who therefore fail to cultivate allies. In thinking about this topic, it is important to consider how coalition partners can be identified, how alliances are built through promotions and hiring decisions, how alliances are built by providing resources and doing favors for others, how and why allies are lost, and the consequences for managers who don’t have as many friends as they would like.