The success of Richard Branson and Percy Barnevik in becoming and remaining effective leaders of Virgin Group and ABB is largely due to their willingness and ability to empower individuals within their organizations (Lesko, lecture 2-2-2000). Branson and Barnevik have demonstrated sensitivity to the needs of others in their companies, such as the need for achievement and recognition. Though their attention to and encouragement of ideas and initiatives, Branson and Barnevik have attained exemplary support of their subordinates (Lesko, lecture 2-9-2000). Branson’s authority at Virgin is further extended by his flamboyant and charismatic personality and attention-grabbing behavior, both serving to increase his perceived social status, as described by the leadership model (Lesko, lecture 1-26-2000; Pfeffer 79).

To take you must first give

Empowerment means transferring authority and responsibility from oneself to subordinates, or to other individuals on whose performance we depend. It must not be done solely implicitly, but also structurally and legally. A great part of success of Richard Branson and Percy Barnevik is attributed to their empowering of others, and it is evident from looking at the structure and evolution of their respective companies that they were committed to doing it fully and correctly.

Barnevik is credited with firmly implementing the concept of a multi-domestic enterprise (Course reading). He decentralized ABB, removing multiple layers of management present in traditional hierarchical structures, and placed most of decision-making power into the hands of local managers and those responsible for specific product sectors.

Branson is known for an even more pronounced practice of transforming business units into independent companies once they reach a certain size (50 people), transferring the power of administration to former subordinates.

Since the topic of this paper is to examine the underlying factors of Branson’s and Barnevik’s effective leadership and the sources of their power within the organizations they are heading, we should look at the role and effect of the practices described above. Most observers would agree that Richard Branson and Percy Barnevik command respect and authority in their companies and possess substantial power. They are also seen to be giving power away, sharing responsibility and bestowing authority onto others, without a decrease in theirs. In fact, the influence of Barnevik and Branson only increases. This is consistent with the notion that power is attained by giving it away (Lesko, lecture 2-2-2000). Power placed into the hands of subordinates results in their direct loyalty. It also tends to result in increased performance, for decision-making ability is a motivating factor. And this improvement should be attributed as much to the empowerer as to the empowered and the latter’s efforts and authority, for his or her newly-created authority is a result of power being exercised by the leader. To empower is both a power in itself and an effective use of power (Pfeffer 267), resulting in even more influence and power.

Divide and conquer

Empowering structurally, as practiced by Branson and Barnevik in their organizations can be an example of consolidation of power (Pfeffer 267). Limiting the number of management layers at ABB by Barnevik, and creating a matrix authority structure ensures that no individual commands a large part of the company, save the CEO himself who ultimately directs it all. Branson admits of the same: of having many largely independent companies within his empire. By design, and his authority, nobody manages more than 50 people! If they happen to, this power is actually taken from them.

A component of the leadership model (Lesko, lecture 1-26-2000; Pfeffer "Managing with Power") is sensitivity to group needs, a second reason for success of Barnevik and Branson. Awareness of the needs of a constituency, which in the case of Branson and Barnevik is the employees of their respective companies, and the willingness by a leader to address them results in the indebtedness to him on the part of the constituency and natural gravitation to him, for most people do seek to have their needs understood and fulfilled. The indebtedness mentioned above is repaid by means available to an individual in an organization: support, loyalty, performance.

Taking time to listen

One expression of sensitivity is the willingness and ability to listen to others and seek to learn their opinions and feelings (Lesko, lecture 2-9-2000). Both Richard Branson and Percy Barnevik clearly demonstrate such inclination and behavior. Branson admits, and even boasts of absence of rigid lines of authority and formal decision-making procedures. According to him, any employee may, and is encouraged to, approach him for advice and immediate feedback on a suggestion or idea. Similar attitudes are observed in the actions of Percy Barnevik at ABB. In his own words, he has striven to create a climate of trust and cooperation, where people can freely express their thoughts and ideas, without bias and reservation.

United we stand

Although such listening is solely business-oriented it is still within the bounds of the theory. Being listened too, apart from psychological benefit (Lesko, lecture 2-9-2000, 2-16-2000), creates an appearance that actions of the leader reflect and even stem from the ideas and thoughts of the subordinates (supporters). This alone builds an illusion that the leader is aligned with the constituency and conforms to it and its norms (Lesko, lecture 1-26-2000). Furthermore, responsive listening exhibited by Branson and Barnevik fits with the notion that power and influence is derived from the location in the communication network (Pfeffer 111). By encouraging uninhibited exchange of information, Branson and Barnevik make sure that communication converges on them.

One question that is often argued is whether effective leadership skills and influence resulting thereof come from birth or can be acquired. So far this discussion has focused on practices of Branson and Barnevik than can be imitated with relative ease and acquired by others. However, purely individual characteristics are also present and have an effect on their effectiveness. According to the leadership model (Lesko, lecture 1-26-2000) perceived high external social status is instrumental in determining which individuals will immerge as leaders in given environments and helps to maintain a leadership role if other factors are also present. Personal characteristics and behavior affect the potential amount of influence that one can have on others. The presence or lack of charisma in can play a role in distribution of power in an organization or a politically charged setting (Pfeffer, 79). Little is mentioned about Barnevik’s charisma, but much is known of Branson’s. Although not born with high social status, he created it for himself by many of his daring exploits, such as attempts to circumnavigate the globe on a balloon and many others. Unrelated to business they may seem, these acts provide publicity, even if not for the company but certainly for its leader. But for this leader it makes a big difference, for his status and reputation is elevated on all sides, including the people he leads in his company.