Is Influence An Asset Or Liability?

Is Influence An Asset Or Liability?

Leaders can throw their muscle around for the good . . . or bad.

Instead of spending his last years basking in the glow of a successful career as the prosperous inventor of Select Comfort’s Sleep Number Bed, Robert Walker will likely spend the rest of his life in prison. In late September, the 72-year-old was sentenced to 25 years in prison for defrauding investors of $57 million over a decade while leading his latest venture, Bixby Energy.

After a seven-week trial, a federal jury convicted Walker of fraud, tax evasion, witness tampering and conspiracy for repeatedly misleading investors about the success of his alternative-energy company. The assistant U.S. Attorney in the case said Walker was “a leader among crooks. He was a master manipulator . . . . he has this narcissistic focus on himself.”

Testimony during the trial demonstrated that Walker repeatedly persuaded investors to buy company securities based on false information, fought board members who disagreed with him and gave misleading reports about the progress of the company’s technology. About 1,800 people invested in the company, which folded in 2012.

I don’t know Mr. Walker, but from what I’ve read about him (including stories of an attempt to contact a government witness through a third party) it seems that he was a man who knew how to misuse influence. Founding and funding Select Comfort must have required the art of persuasion, but when he created his alternative-energy company and lied to investors, he used influence dishonestly.

In contrast, look at the use of influence by Minnesota’s Super Bowl Bid Committee, led by three Twin Cities business leaders: Doug Baker, chairman and CEO of Ecolab; Marilyn Carlson Nelson, former chairman and CEO of Carlson; and Richard Davis, chairman, president and CEO of U.S. Bancorp. These three leaders worked with a committee composed of other business, labor and community leaders, as well as representatives from the Vikings, Timberwolves and the Minnesota Sports Facilities Authority, the state Employment and Economic Development Commissioner Katie Clark Sieben and Meet Minneapolis president and CEO Melvin Tennant.

The details are not public, but from what has been reported, the bid committee used its collective influence to persuade the NFL that Minnesota would be the most hospitable location for the 2018 Super Bowl. With an international audience of more than 100 million people and an economic impact of an estimated $300 million, I’d say this group used its influence victoriously.

Influence is so commonplace in our daily interactions that most people probably don’t even think about how powerful it can be. Co-workers use the art of persuasion to get others to do them a favor, pitch in on a project, provide more funding, meet a deadline, stay longer at work to finish a report, etc. (For the purposes of this column I’m focusing on the interactions within organizations, not between companies and their customers.)

Effective business leaders know how to use influence productively to sway their organization for the good. Without influence, leaders could not stimulate change, promote strategy or inspire a future vision. I’ve observed the use and abuse of influence in countless boardrooms and executive offices, and I believe that all executive leaders need the art of productive influence in their toolbox.

If you’d like to add influence to your bag of skills, take the advice of Robert Cialdini, a leading social scientist specializing in influence. He has conducted experiments in the field of influence and authored a book, Influence, in which he identifies six main principles of persuasion:

  • Liking: If you are likable, people are more likely to agree with you.
  • Reciprocity: Helping people means they are likely to return the favor.
  • Social proof: People model to the actions of others if they relate to them.
  • Commitment and consistency: Remind people of their commitment to do what they said they would do.
  • Authority: Influence is stronger by being an authority rather than being in authority.
  • Scarcity: Create a sense of urgency or a feeling of scarcity.

Together, these tools can be used to effectively influence people.

Similarly, the influence model from Influence Without Authority by Allan R. Cohen and David L. Bradford offers tools for the process of reciprocity and exchange, which they define as “trading what you have that the other person desires in exchange for what you need to accomplish workplace and personal goals.”

These researchers think reciprocity is at the core of every form of influence, and once we understand that, we can consciously apply their influence model by assuming others are potential allies with common ground. Next, they recommend clarifying goals and priorities to know what we are willing to trade, understanding the other person’s needs as well as our own, being conscious of building good relationships, and then influencing through give and take.

“Trust plays an important part in achieving influence,” write Cohen and Bradford, who add that people with influence are those who demonstrate their interest in the well-being of others and create authentic relationships based on mutually profitable exchanges. In other words, “It pays to be generous and engage in win-win exchanges,” they write. In this positive way, the use of influence can be a powerful asset for leaders who can inspire, persuade and encourage their organizations to dream bigger and work harder.

On the other hand, the abuse of influence can be a terrible liability and undermine the very fabric of an organization. Unfortunately, some leaders at the top think they are invincible and use their influence dishonestly. To cause harm, the abuse of influence doesn’t have to go as far as the illegal behavior in the Bixby Energy example. I’ve seen abuse of influence in unfair hiring practices, compensation discrepancies or favoring employees who buy into the leader’s bad behavior over those who do not.

Over time, people become so uncomfortable that they vote with their feet and leave. And who is left? Those comfortable with a culture of dishonesty, cheating, stealing, lying and so on. Ultimately the organization is cheated by its own employees, who usually also wind up cheating and lying to customers, or, in Mr. Walker’s case, to investors. The cycle of dysfunction simply keeps going on and on, creating a drain on resources and ruining the company’s reputation.

So be aware of your influence in your organization and be sure to use it as an asset, to create an effective organization. Otherwise, the abuse of influence will become a liability. And that’s not likely to result in positive net worth!

Mark W. Sheffert (mark@manchestercompanies.com) is founder, chairman and CEO of Manchester Companies, Inc., a Minneapolis-based performance improvement, board governance, and litigation advisory firm.

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