A New Leaders Guide to Thriving — Lesson 3: The Most Effective Leadership Tool You Have
By: Leon Purton
Tags: Work, Success, Growth, Leadership, Leadership Development

What is the power of a leader?

You have been put into a position of authority for your team. With that position comes some power to influence the performance and outcomes of the team.

In 1959, two University of Michigan researchers conducted a study to categorise the bases of social power. They identified five different types of power for a leader, and these were grouped into two categories.

Formal Power

The first category of power is formal power, this is the power inherited through position.

It can be broken into 3 different types; coercive, reward and legitimate power.

Coercive power is derived from the ability to penalise the people in your team. You can explicitly or implicitly threaten their job. The threat of poor performance reviews or demotion is an example of coercive power.

It’s opposite is reward power. Where coercive power is the stick, reward power is the carrot. The opportunity for a boss to reward employees for good performance, or with better assignments in an example of reward power.

Coupled to these two is legitimate power. This is the last of the positional, formal powers of leadership, and is defined by the position and the respect for that position or individual.

Formal power is rarely earnt, and often inherited in the position. This type of power in leadership is weak. Formal power does not provide a strong platform for good leadership. It is the type of power held close by the insecure boss. The boss who knows that their value to the team is tenuous and they are relying on these formal powers to get the most from their team.

Most of the time they will fail.

Personal Power

The second category of leadership power is personal power. It is an earned power and cannot be granted or attached to a position, it is attached to the person. There are two different types of personal power.

The first is expert power. This type of power is developed through a person’s knowledge, experience and skills. This often manifests as specialist area thought leadership. These acquired skills and knowledge lend power to assist others through challenging scenarios. These people may not hold formal positions of authority, but everyone on the team knows that they should talk to them when they need help navigating a related situation.

The second type of personal power is referential power. This is the type of power held by a person when they are referred to as trustworthy and respected. It is earnt through personal interactions that follow a consistent path. This is the type of power that takes time to build but can be hastened for new team members.

Which power do you want?

Studies have reported that while a CEO or Managing Director might have formal power, this is weakly coupled with organisational performance. The bosses who also hold personal power have higher-performing organisations.

The problem is you can’t just be given personal power, but you can be given formal power. This is difficult for new leaders, especially those who have moved into their very first leadership position. One that they earnt through hard work and high performance over an extended period of time.

They essentially only have three or four of the powers available to them. All the formal powers, and for some the expert personal power.

With these four, many new leaders think it is enough. But they are missing the most important of these; referent power. The hardest to earn and the easiest to lose.

However, as a new boss, there is one thing you can do from the start to begin developing it.