Exit Strategy

In business, as in politics, transfers of power aren’t always seamless — and when threatened, the powerful sometimes dig in their heels. After the nation’s top elected official struggled to accept his ouster in the 2020 election, management scholars reflected on similarly fraught leadership successions at organizations both large and small. For insight into this dynamic, we spoke to psychologist Marlon Mooijman, an assistant professor of organizational behavior at Rice’s Jones Graduate School of Business. With a focus on the interrelation of power, trust and status, Mooijman’s research offers a unique perspective on the current political moment — and its connection to organizations well beyond the arena of government.

How does your work dovetail with the post-election period?
What’s most relevant is the question of someone’s willingness to give up power, to relinquish control. We define power as controlling something others desire: a business budget, government funds. That control gives people power because it makes others want to do things for them, to gain access to that desirable good. As a consequence, gaining and having power is nice, and losing it is not. And that’s as relevant an issue for CEOs as for politicians.

What are the conditions under which leaders find it particularly hard to give up power?
My research suggests that on the way to the top of the corporate ladder, leaders lose trust in those around them. They start to think of the managers below them as doing their bidding only because those direct reports want something the leader has to dole out: more budget, bigger bonuses, promotions. As a result, leaders don’t trust that others are working for them because of their own good will.

In a Machiavellian way, leaders come to see interactions with those below them as all about political maneuvering, and they start to feel like they have to always be on their guard, so they don’t get taken advantage of.

And that makes it hard to cede control?
The more power you gain or exert, the less you trust. And the less you trust, the more you feel like you have to rely solely on your power to get things done.
 

The longer people stay in power, meanwhile, the more cynical they get about trust. Leaders find they have to use more and more power to hold on to power.

So they crowd out trust, they crowd out the possibility that people are willing to follow them voluntarily, and their leadership starts to rely on force and domination. People then exhaust every option to keep power.

How do organizations resolve this problem? How do they get rid of a power-mad leader who’s really dug in?
It often requires creating a cushy way out. If a board wants the CEO out, its members need to think about what’s important to him or her, what’s the underlying concern. Everyone is different. Is it really just about holding on to power?

My takeaway is, organizations have to focus more on making outgoing CEOs feel like they’re still esteemed, admired, and that they will be moving forward. Maybe that’s about some sort of honorary title, emeritus status, maybe it’s about still having a parking spot.

It’s about money, too, of course. You have to buy people out, that’s standard. But what often goes unrecognized is that departing CEOs want a good way out in terms of how esteemed they seem. Ultimately, it’s about respect.

If you’re a CEO who’s maybe failing a bit and then asked to leave, it’s embarrassing. Leaders get trapped in a phenomenon that’s called escalation of commitment: When doing poorly, they want to invest more time, more energy and money into saving their reputation. A way out of that cycle is to provide an exit that saves face.

What’s the relationship between the power-trust dynamic and this desire for respect?
In my field, we make a distinction between power, which is controlling resources, and status, which is about respect and admiration. If I have power, that tends to undermine trust. Because I have something desirable, I become more cynical about others’ motives. But if I think others admire me, I tend to trust them more.

If an organization can make people feel respected and admired, it becomes an environment where inclusion is prevalent, and trust goes up. If a workplace has more power hierarchies, it creates more distance and less trust. 

Does that mean there should be no hierarchies? 
Every organization needs to have some sort of power hierarchy. But there are other ways to boost inclusion and trust: Minimizing a focus on different titles; deemphasizing the degree to which people have access to different levels of resources and the degree to which people occupy clearly different spaces and types of offices based on their titles and level of power. If an organization can do that, it feeds into an idea of employees being close to each other instead of far away.

What steps can organizations take to make that happen?
I've been in corporate board meetings, where people smack the table and say basically, “I'm the boss, so I decide.” Sure, that’s true. But you destroyed all your authority in that moment.

Instead, you have to focus on culture, and culture starts at the top. Studies show that when CEOs place high levels of trust in managers right below them, that trickles down. That’s not a surprising outcome maybe, but it’s nice to know that research bears it out: You can change the trust dynamic in a company when you make changes at the top.

What does that mean for the country moving forward?
The tone at the top matters. The president sets the tone, the norm, the implicit understanding of what's acceptable. So it’s important to have those in charge foster trust and respect throughout an entire organization — or, in this case, the whole nation.

Andrew Sessa is a Boston-based writer and editor.