The dangers of formal power

Formal Power

I’ve never been the biggest fan of formal power.

To my mind, there are two types of people that end up telling you what to do at most jobs. One group is managers. That’s organizationally-vetted formal power. Via research, most managers are not actually good at their jobs. Almost every manager I’ve ever had was terrible. For more on this, check out this article.

The other tier is leaders. A leader can be anyone. They don’t necessarily need to be vetted by the organization, but obviously it helps everyone if they are.

The easiest way to think about it is this: leaders are people you want to follow. Managers are people you’re required to follow. It’s the push-pull of leadership at most jobs.

When a manager is not very good at their core functions, it’s essential that they have some degree of formal power. This, of course, makes the situation worse. They cling to that formal power. Oftentimes, they confuse that formal power with “knowing what’s best.” References to their place in the hierarchy abound.

This is where formal power gets dangerous.

The dangers of formal power: Some research

Here’s some work from Stanford on the dangers of power. The researcher/professor opens with this: “Power is like fire. It’s useful, but also dangerous.” Amen.

To Brian Lowery’s (the professor) research, there are six sources of power:

  • Reward
  • Coercion
  • Information
  • Legitimate
  • Expert
  • Referent

Here’s a quick breakdown. At work, you see all six — although coercion (using fear, essentially) is very common, as is legitimate. In fact, in this case, “legitimate” means formal power. Expert is usually someone working in an unique aspect of the business model, i.e. a data scientist. Reward is less common — most employee recognition programs are a joke — and information in companies is usually used as a weapon, sadly.

Referent is most common in a social media context (people want to follow you), but does happen somewhat at work.

Alright. So if these are the six sources, what does that mean for formal power in organizations?

How is formal power used at most companies?

You have to always keep in mind three things about work, IMHO:

The intersection point of those three roads is a complex place. It’s more complex with the advent of digital tools and approaches, which many people don’t inherently understand.

Formal power plays into this big-time. Most people with formal power use it as a weapon. It’s a “Well, actually…” culture. Someone has a good idea and the person with formal power swats it down. Well, actually … they have the formal power, so what they say goes.

Those with formal power often hoard information at their levels, too. This helps with the “relevance” equation above. (It ties into the “information” bullet point above that.) That’s why you typically hear info about your company 2-3 months after your CEO decided it. The silo head was hoarding that info to increase his relevance to the org. Classic formal power move.


I’ve worked at dozens of places. I’ve very infrequently seen formal power used as anything but a justification and rationalization of self for the person who has it. Once in a while, you’ll see someone with formal power shepherd along someone else — “be their rabbi” — into a higher role. But most formal power guys I’ve worked with usually keep their lieutenants at the same pay grade for 8-10 years, making the formal power guy look good in the process.

We all know how it goes.

Formal power and money

This is a complex, controversial, and nuanced topic. I’ll only skirt it here. Basic deal: if you have formal power, you will make more money. That’s how it works.

The problem is: bureaucracy is expanding. Where there were once 3-4 C-Suite roles, there are now 10-12 at some companies. You probably don’t need a Chief Fun Officer, but you might have one.

Here’s the problem with your Chief Fun Officer: his/her existence essentially guarantees that you can’t make any more money. There’s a hard ceiling on the available scratch, and those with the formal power will get the most of it. This might be in salary or bonuses, but it will be there for them. That’s less for you. Sadly, this is simple economics.

This is why a lot of people in advanced capitalist societies think the society ain’t working for them. See: Trump, Brexit, etc.

Earnings are stagnant. It is true. It’s a complicated picture as to why, but here’s a guess. At my last gig, we had a Chief Organizational Officer — I think that’s a necessary role! — who once spent a week hiring a babysitter for the CEO. Do the math on that one. Formal power gets more money, but is formal power necessarily advancing the org — or are they advancing the personal needs of those tied to the org?

Is there a solution to the dangers of formal power?

Absolutely not. Human psychology will always drive certain people to be target-chasers, and as they rise up, you’ll see a reduction in empathy (generally). This is life.

From a work standpoint, though, there are two things we could do better.

  • Different Tracks: Most people become managers — i.e. seek formal power — because it’s the only way in most companies to get a higher salary. Many of the people who seek this route should never be a manager, but they want the extra money. So, we need two tracks. One is for managers, and one is for individual contributors. You can make the same money on each track. This prevents people who would be bad managers from having to become managers to advance their personal bottom line. Most companies would see this idea and shriek and hide under a desk, but it has value.
  • Think about senior management differently: At most places, senior managers muddy up projects more than they help them along. Your senior leadership should not be individual contributors. Formal power should be setting strategy and coaching others along. It should have nothing to do with hitting deliverables. That’s work for down the chain. But because companies often get this wrong, you have CMOs line-editing Facebook posts at 11am on a Wednesday. Is that useful relative to their salary? Probably not.

Any other thoughts on formal power in organizations?

Ted Bauer


  1. Formal power, as you describe it, sounds like authority. Bestowed authority. Designated authority. Is this how you interpret it?

    You write of formal power being “dangerous”. I take that to mean power that reduces trust in the relevant system-of-people.

    Power– authority– that is not synced up with accountability– responsibility and liability– reduces trust by creating a moral hazard if authority outstrips accountability and reduces trust by creating frustration if accountability outstrips authority. Authority that is not synced up with capability of the holder, reduces trust because the authority won’t be wielded as intended because the authority holder can’t. This is the case in the implicit example of people chasing salary increases through managerial roles and, really the root cause here, the company that doesn’t know how to ensure a match between capability and accountability of the role.

    Creating a technical promotional track doesn’t solve the root cause. It creates role alternatives for people’s capabilities to be matched to. Assuming the roles contribute to execution of the business model.

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