Chapter 13: Predicting The Capability To Solve Problems

Perceptions of Problems

We have analyzed why and how organizations develop and age; why they have their predictable problems; and how to differentiate nor- mal from abnormal and abnormal from pathological problems. Now let's consider organizations' ability to control and solve their problems.

The more an organization perceives it is empowered to solve its problems, the younger it is.

Once it starts perceiving itself as impotent, it starts to age. It's old when it perceives itself as powerless, as if destiny had taken charge.

First, for therapeutic purposes, we need to define what consti- tutes a problem. A problem need not be a fact: It can be the perception of a fact.

I consider any phenomenon to be a problem-whether it is a fact or a perceived fact-if those subject to it find it undesirable and/or unexpected. Something undesirable is obviously a problem, especially if it is unexpected. Any unexpected event is a problem if, like negative cash flow, it could and should have been predicted. What about an unexpected situation that is desirable? That, too, is a problem even though most people consider it luck. I say it is a problem because such so-called "luck" makes the organization complacent. It has deep-seated problems-inadequate planning, forecasting, and assessment of the environment-that, as yet, the organization has had no reason to recognize. Recognition will be inevitable, however, when that ignorance causes undesirable, unexpected results.

To whom do such problems belong? Occasionally, those who can control a particular problem and, therefore, have the capability to solve it, are the people who have the least interest in its solution. At the same time, those who suffer from the problem can neither control it nor change it. So, whose problem is it? To find the answer, let us reverse the logic.

A problem is an undesirable and/or unexpected result or process you can control or affect. Don't worry about the rain: There's nothing you can do about that. What you should worry about is how to prepare for inclement weather: where to find an umbrella now that it is raining, or how to repair your leaking roof. Whatever is con- trollable and undesirable and/or unexpected is a problem for you because you can and should do something about it.

A bank, for example, should not be troubled by the unpre- dictability of interest rates. Fluctuating interest rates pose problems only for banks with no strategy to deal with that unpredictability. You must focus on what you can and should do and forget academ- ic discussions about the sources and causes of problems. It's nice to understand the origin of a challenging situation, but that knowledge in itself does not lead to change. You have to define the problem in terms you can deal with, i.e., you can do something about it.

Whether a problem is a problem or just an unpleasant fact depends, therefore, on whether you perceive you can control it. Take chronic migraines, for example. In my opinion, migraines are not problems if there is nothing you can do about them: Medical science is at a loss. No matter how unpleasant they are, they are not a problem unless you can do something about them. You have to live with your migraines. Thus the problem, until medical science advances on this score, is not the migraines. Your problem is to figure out how to live with them.

Let's focus on controllability of problems.

To carry out decisions that solve problems, managers need cer- tain energy. Authority, Power, and Influence are the sources of that energy.

Figure 13-1: Sources of Managerial Energy

Authority

I define authority as the right to make a decision, to say yes and no to change. That right is formal and inherent in a person's job, independent of his or her connections or education.

My definition, the right to say yes and no to change, is deliberate. If I had defined authority as the right to say yes or no to change, my meaning might be interpreted as the right to say yes without the right to say no (very rare) or the right to say no without the right to say yes (much more common).

What is the origin of the bifurcation of yes from no?

From Infancy to Adolescence, the founder-the one-and- only-retains all decision-making authority. The founder can say both yes and no. When companies outgrow their founders' capability to manage, founders start to delegate authority. By start, I mean that they don't delegate complete authority-only the authority to say no. Founders prefer to retain the right to say yes. Over time, the numbers and layers of no-sayers grows, while the authority to say yes resides in a distant corner of organizational hierarchy. When people are authorized to say no, and, rarely, yes, their organization grows increasingly bureaucratic, losing its ability to react to changes in the environment. New needs arise in what, how, when, and who. Organizations need to address those needs by changing the way they do things. It's terribly difficult to proceed when the very few who are authorized to say yes are hierarchically remote. Those authorized to say no are many, and they are everywhere. Problems and their solutions are filtered by so many no-sayers that they rarely reach the attention of a yes-sayer. Effective consultants understand this syndrome. They demand access to the top person because that's the only way to get a yes.

Authority to say yes is necessary, but not sufficient. In many countries, authority and a dollar won't buy you a cup of coffee.

Power

Along with authority, power is the second source of managerial energy for implementing decisions.

I define power as the capability to punish or reward. The accomplishment of some organizational tasks requires the coopera- tion of more than one individual: Lifting the rock requires a working interdependency. If the person or people whose cooperation is needed to implement a decision stand in the way of progress by with- holding their cooperation, that person or those people have power. How much power a person has depends on how much we need that person's cooperation, and how much of a monopoly he or she has over what we need.

Influence

Influence is the third source of energy for implementing decisions and carrying out tasks. Influence is a person's capability to cause people to act without having to invoke authority or power. Influence usually derives from information that convinces people to act as desired. When people independently recognize the validity of the decision to be implemented, they have been influenced. The effects of influence are entirely voluntary; neither coercion nor fear forces people to act.

Authorance and CAPI

The circles of authority, power, and influence overlap to form different combinations of the three sources of energy: Authorized power, ap, is the legal right to punish and reward. Indirect power, ip, is what occurs when the directing person believes he is influencing but the focal person perceives power. Perhaps a supervisor tries to convince an employee that a new methodology will work, and the employee, who is not at all convinced that the new approach is correct, acts only because he does not believe that he can exercise his own independent judgment. He acts because he is frightened or worried about the repercussions of refusing to comply. Professional management literature refers to the third combination, influencing authority, ia, as authority by acceptance or professional authority. In such situations people accept and co-opt the decision of those to whom they report.

At the heart of those three circles is CAPI: Coalesced Authority, Power, and Influence. All the possible combinations are called authorance: authority plus power plus authorized power plus indirect power plus influence plus influencing authority plus CAPI (see Figure 13-2).

Figure 13-2: CAPI

Let us see how this model works in reality.

Consider a mother who is trying to persuade her child to eat spinach. She uses several different components of authorance. In the beginning, she might say, "Eat it, it's good for you. Popeye eats spinach, and you can see how strong he is. You will be like Popeye." She is using the influence component of her authorance. If the child still refuses to eat, she might allude to the father who will soon be home. That use of indirect power may cause the child to eat the spinach. If, however, he still refuses to eat, the mother might get angry and punish him. If, according to the value standards of the family, the punishment is acceptable, she is invoking authorized power. If not, she is using power without authority. Perhaps the child still refuses to eat. At that point, the mother might make the classic management mistake. She may resort to pleading. "Why don't you listen to your mother? Why don't you ever do what I tell you to do?" She is using the last resort of her authorance, which is authority. That is tactically wrong. Once she invokes her authority, there is nothing left for an encore. It is even funny when she says, "Why don't you listen to me? Am I not your mother?" Is this news to the child that she is his mother? What is she trying to say? The impact is no better when a superior pulls rank on an employee: "Do it! I am your boss!" Is the employee surprised to find out that you are the boss? Does he need reminding? You know you are in trouble if you find yourself offering reminders you shouldn't have to make: Try, for instance, reminding a friend that he owes you money!

What the mother might use with better effect is influencing authority. She, herself, could eat spinach in front of the child, serving as a behavioral model. There's a chance that the child might emulate her.

The mother has CAPI when she suggests, "How about eating some spinach," and the child immediately eats it because he believes it is good for him, he worries about the repercussions of not eating it, and he respects his mother's suggestions.

While a single individual might not have total CAPI over his task, a group of people might jointly have the required CAPI. In order to assemble CAPI, a manager must create an environment of common interest for the various interest groups that comprise CAPI.

In an organization where CAPI is divided among people, authority usually lies with management. The board of directors has authorized management to make decisions. Most often, power lies with subordinates who may or may not cooperate. And the technocrats-professionals with decision-making know-how-have influence.

The interests of those three groups can conflict. Those in authority might focus on growth, market share, sales, profits, return on investment, or dividends. Those with power-the employees- might want more security at work, better working conditions, or higher salaries. And for their part, the technocrats might focus on larger research budgets, getting the best equipment, and finding the most precise solutions.

In the short run, the interests of those groups are incompatible, and the conflicts they engender could paralyze the efficient implementation of decisions. A win-win climate and commonality of interests are necessary to resolve the conflict, but such utopian visions are not operationally possible at any point in time, continuously, or forever. At any point in time, there is a win-lose climate. Conflict over diverse interests is normal. Consider your personal life. You want to see a stage production, and your partner insists on going to a movie. You want to listen to classical music, and the kids insist on rock 'n roll. Life is a conflict of interests all the time, at any point in time.

So, what to do?

To obtain an operationally win-win climate in the short run, the people who together comprise an organization's CAPI must develop mutual trust and a vision of a win-win future, which is a process of building I. They must believe that they will benefit from the long- term win-win, even if there is a win-lose in the short run. Unless the various constituencies develop mutual trust, the short-run conflict of interest will dominate behavior and impede the efficiency of implementation.

One can predict the effectiveness of a decision's implementation by gauging how much CAPI any individual has over the decision. When one individual does not alone possess all the necessary CAPI, we should analyze how much mutual trust and win-win vision there is among all the people it will take to implement the decision- the people who jointly have CAPI.

Predicting Who Has Control

To recap, authorance comprises all the energy management uses to cause behavior to occur. It is the combination of three basic ele- ments: authority (the legal right to make the decision), power (the capability to withhold desired and expected cooperation), and influence (the capability to cause self-directed behavior through know- how). Combinations of those elements include authorized power, indirect power, influencing authority, and CAPI: coalesced authority, power, and influence, or control.

The following section describes the changing behavior of the different elements of control, over the course of the lifecycle.

Figure 13-3: The Components of Authorance

Authority over the Lifecycle

During Courtship, the question of authority never even arises. It's virtually irrelevant. Before marriage, during the falling-in-love peri- od, no authority issues arise because the couple faces no real tasks. Courtship takes place in a make-believe world: Each person is careful to do nothing that might scare the other one away. It is a period of sharing.

When Courtship is over, and an organization is born, there are tasks to be carried out and there is risk. Time evaporates. We need to act NOW! Decisions must be made NOW!

The "now" imperative means that, due to the pressure of time, only one person can have the authority to make decisions. Naturally, that actual authority is concentrated in the founder-the person who is the most committed. That is the one person who has sacrificed most, measured in time, sweat, and sleepless nights. That is why leadership in Infant organizations is autocratic. In an equal partnership, the partners have to spend a great deal of time together, deciding how to split responsibilities. Usually, one of the partners, the E, emerges more dominant than the other.

In Go-Go, one person completely monopolizes authority. All the titles-chief operating officer, chief financial officer, chief executive officer, founder, president, chairman of the board-belong to one person. The organization-even if it is a partnership or a public company-becomes a one-person show. "I've created a monster here," said a partner in one of my client organizations about the equal partner who emerged as the leader. The founder communicates less and less with his followers, and, because the company is growing rapidly, arrogance accompanies his success.

No one challenges the monopolized authority-yet. Nobody dares. There's no arguing with success. In his arrogance, the founder feels his company's growth is his own doing. He thinks it is his talented leadership, good judgment, precision timing, and well-developed relationships with clients that make the company a success. "He believes his own press releases," one executive remarked. Arrogance makes him use his authority more and more and his influence less and less. The board of directors does not challenge him: A Go-Go's board is often comprised of the founder's cronies or family members. Everyone is making money. Analyzing Organizational Behavior "Leave him alone; if we knew better, we would be in his place" and "We need him more than he needs us" are typical reactions of Go-Go board members and executives. The executive committee does whatever the founder says. There is still no participatory system in effect.

Then things start to go wrong. The company starts coming apart at the seams, and people begin to question the founder's authority. The first to raise the flag of revolution against the founder, president, or chairman is Administration: either the person who has been hired or appointed to organize things, or the person with the finance portfolio.

A struggle for authority erupts between the Entrepreneurial types and the Administrative types, and the board watches from the sidelines. If the Entrepreneur gains final authority, the Administrator is fired, and the arrival of a new A initiates another cycle of authority struggles. If E does not gain final control, the board develops an axis with A, usurps authority, and squeezes the E out. In Prime, when E is institutionalized, the executive committee comes to life, and the board takes full authority; it delegates some authority to the executive committee. The governance function is well-delineated. The limits of authority of the executive committee, the board, and each executive are specified. Authority is delegated and decentralized commensurate with responsibilities.

The difference between the pre- and post-Adolescent stages is that authority is personalized during Infancy and Go-Go, while in Prime and successive lifecycle stages, authority is institutionalized and systematized. After Prime, that institutionalization and deperonalization grow to the point that eventually, no one person feels he has authority in real terms.

That transition requires further explanation.

Authority vs. Responsibility

Management textbooks say that authority must equal responsibility, and vice versa. At first glance, that makes sense: How can anyone be held responsible for things over which he has no authority? Why should anyone have authority without commensurate responsibility? Makes sense, right? Wrong! It took me fifteen years to figure out why the textbooks are wrong.

As I worked with client companies, I kept hearing the same complaints. People objected that they lacked the authority necessary to carry out their responsibilities. After a few years and several dozen companies, I started wondering why I never encountered a manager who told me that his authority equaled his responsibility. Is it possible that the theory cannot exist in reality? I persisted. I looked and looked, but I could find nobody who would say, "Yes, I have all the authority I need for my responsibilities." Now, I am con- vinced that that condition can exist only in an organization that is dead. Why?

Whenever there is change, levels of both responsibility and authority rise and fall. By definition, therefore, at any point in time, in any particular realm, authority may exceed responsibility, while in a different realm, at a different point in time, responsibility may exceed authority. Responsibility will equal authority perfectly and over time, only if nothing changes. And that means the organization is dead. Being alive means having to live with uncertainty, with ambiguity. Do we have the authority or not? Do we have the responsibility or not? The higher the rate of change, the higher the ambiguity. Thus in a young organization, let us say 60 percent of authority and responsibility is given, and 40 percent is taken. In aging companies, 80 percent or 90 percent is given, and only 20 percent or 10 percent is taken. When 100 percent is given, and none is taken, the organization is a Bureaucracy and it will meet its end when outside authorities discover that it's more of a liability than an asset. Let's consider how organizations handle uncertainty.

Is it possible to define responsibility exactly, leaving absolutely no question as to what must or must not be done, how we should or should not proceed, when we ought or ought not take steps, and who should or should not perform? Obviously, because there is always change, it is impossible. One cannot predict everything in advance and decide everything in advance. For each responsibility, an individual can be certain about the extremes: Up to this point is certainly my responsibility and beyond that point is certainly beyond my responsibility. But between those two points is a vast area of uncertainty.

How should people deal with uncertainty? Let's consider a tennis analogy. When people play doubles, the players always aim their balls to land between their two opponents. With a bad team, the area of uncertainty belongs to neither of the two: Each one waits for his partner to make the play. On a good team, the area of uncertainty belongs to both players: They both move toward the ball, and one of them takes the shot.

However, it's not efficient for both players to go for the ball. To improve their efficiency, should they draw a line that indicates exactly who is responsible for particular areas of the court? People can't play that way. They would have to wait for the ball to land before either of them could react. Obviously, once the ball lands, any response would be too late.

How does a Bureaucracy handle change and the ensuing uncertainties?

When the tennis players discover that neither of them has been covering a section of the court and that it would be inefficient for both of them to try simultaneously to respond to that need, they bring in a new person to handle that middle area. Nice idea, but what happens next? With the addition of the third player, now instead of one, there are two areas of uncertainty for which no one claims responsibility. They recruit two more people to handle the new areas of uncer- tainty, and that, of course, creates even more areas of uncertainty.

Eventually, there are so many people on the court that no one is watching the ball. They are watching and stepping on each other's toes. They start to wage war over turf. Everyone expends energy protecting his turf, and nobody is hitting the ball.

The big question becomes: Who is responsible for what? Some players, trying to avoid involvement in the turf wars, retreat to the areas most clearly identified as their own. Others who are conscientious attempt to cover areas that are unattended and end up in someone else's territory. Others accuse them of empire building, forcing them to retreat. Meanwhile, balls are coming over the net, and no one dares to lift a racket for fear of hitting someone else. So the balls fly by, and only the Bureaucrat, who gets hit by a ball right between the eyes, reacts.

As the turf wars rage, perceived authority, followed by perceived responsibilities, decline. Someone who has an overview of the court must take charge, watching for holes, directing the game, and calling the shots. That is how authority becomes centralized. People want to be told what to do. They would rather be precisely wrong, than approximately right. To give Bureaucrats the benefit of the doubt, such behavior might stem from the nature of governmental requirements. Bureaucracies are under constant scrutiny for waste and improper judgment. Naturally, Administrators believe it's more prudent to do the wrong things right than to do the right things wrong.

The alternative-continuously doing the right things right-is reserved for saints; the alternative of doing the wrong things continuously wrong is reserved for schlemiels. Neither population is a resource for managerial talent.

Doing things right attracts Administrative types who are risk-averse and prefer form over substance. A personalities feel at home with Bureaucratic behavior.

Bureaucracies endeavor to minimize uncertainty, but by doing so, they decrease flexibility. Attempting to minimize uncertainty, people try to define responsibility clearly. To make responsibility clearer when there is change, responsibility and authority must decrease to match the decreasing area of certainty. Systems become increasingly centralized as both responsibility and authority rise to the top. Mundanely small problems flow all the way to the chief Administrator. Overwhelmed with mounting decisions and responsibilities, the chief leaves real problems unattended. That is the process of dying.

More and more, people feel they have no authority or responsibility. They feel their authority is commensurate with their responsibility only when they have neither. That is the situation in a full-blown Bureaucracy. The organization no longer responds to environmental change. Responsibility stops changing, and so does authority. The organization is dead. We are fully in control when we are dead. To be alive means to lack control over parts of our lives. Experienced managers understand that some things they can con- trol, some they can't, and, in many areas, they do not know whether or not they have control.

God, give us grace to accept with serenity the things that cannot be changed, courage to change the things which should be changed, and the wisdom to distinguish the one from the other.

Reinhold Niebuhr, "The Serenity Prayer"

DIAGRAMA Figure 13-4: Authority and Responsibility over the Lifecycle

It's normal to have either more responsibility than authority or more authority than responsibility. Because both responsibility and authority change as conditions change, they cannot be equal.

Prior to Adolescence, authority is personalized. During Adolescence, it becomes depersonalized and institutionalized into the system. During Prime, authority is both institutionalized and per- sonalized. After that point, people who have responsibility lose authority, and effectiveness declines. People in Bureaucracies find that their authority to make changes is almost nil. That's why we find very happy people in Bureaucracies. With no authority and uncertainty, there is little risk as long as everyone just goes by the book. Bureaucrats are very different from the unhappy people of advanced Go-Go and Adolescence, during which organizational uncertainty is at its highest.

The Behavior of Power in the Lifecycle

In Courtship, power is meaningful: The founder is trying to build commitment. By definition, people whose cooperation is crucial to the founder have power. By making regrettable promises, the founder tries to enlist the support of such people. That is how people whose value to the enterprise is only marginal end up owning large pieces of the action.

In Infancy, founders maintain a tight grip on their companies. They don't want to risk losing control. And those who do lose control in this early stage are like mother wolves who reject their cubs once humans have touched them. Founders' commitment evaporates, and they allow their organizations to die in Infancy.

Following the birth of a company, power moves from the peo- ple necessary to get things started to the people necessary to keep the company going. This is a very interesting transition. Loyalties change. During Courtship, the people who had power were outside the company. They were spouses, family members, bankers, and friends. Once the company is born, the company builders, who labor day and night, have the power. Founders' secretaries are quite powerful. They provide the A role to the founder's PE role. Good executive secretaries are worth their weight in gold. They are the people who, by delaying the implementation of bad decisions, keep the founders out of trouble. Founders rely on the opinions and the judgment of these so-called secretaries. The secretaries keep their founders informed about what is going on. They are the political gauges, explaining to the founders what is and is not politically acceptable. It's not surprising that many founders divorce their spouses in order to marry their secretaries or, in the case of artists, their business managers.

In start-up companies, titles don't matter; the role a person plays is what counts.

Sales managers and buyers in retail-distribution chains also play powerful roles in the earliest stages. The accountant is weak, and marketing hardly exists. Those roles are weak because Entrepreneurship is centralized in the founder who makes all the marketing and financial decisions. In small companies, there is no human resources or personnel department, either. Even if the company is large, personnel is of far less concern than sales, upon which survival depends.

In Adolescence, power and authority are diffuse and difficult to pinpoint. Authority and power move from the founder to the financial people and from externally-oriented to internally-oriented people. From Infancy to Adolescence, authority and power are coalesced.

Authorized power is centralized in the founder, the one-and- only. During Adolescence, authority and power get bifurcated. The founder has the authority, but the financial person gets the power. Later, power and authority start moving together or they get "divorced," but for the organization to attain Prime, the two must coalesce. In a healthy transition, the founder and the professional manager share such titles as chairman of the board, chief executive offi- cer, president, and chief operating officer. The founder might be the chairman, chief executive officer, and president, while the professional hired gun takes the role of chief operating officer. In other cases, the founder might become the chairman, and the hired gun becomes chief executive officer, president, and chief operating officer. Sometimes a third person takes the operations role. With all those configurations, authority and power coalesce, allowing the organization to develop into Prime.

After Prime, authority and power separate, and as the organization slides into Aristocracy, power moves down the hierarchy and authority moves up. The organization becomes increasingly centralized. The more systemically centralized the organization, the greater the vertical disparity between authority and power. More and more, people claim to have authority without power, and others exercise power while claiming they lack authority.

Authorized power can also split. An antagonistic labor union, authorized to act for employees, could, for example, use its authorized power to fight management.

In Salem City, turf wars rage, and the lines of authorized power grow fuzzy. Responsibilities shrink, and authority adapts in size.

Peace and quiet reign when authority and power are separated for good. There is authority with no power and power with no authority. The peace and quiet is really a reflection of everyone's paralysis. Unions rely on management. Management relies on Washington. In Washington, the White House depends on Congress, and Congress is dependent on internal politics. Authority and power are so diffuse that it's nearly impossible to effect change.

Over the years, I have seen numerous examples of that phenomenon. A post office in Hawaii needed a machine to lift sacks of mail from its outside loading dock. The postmaster submitted the required request for approval. After waiting for months for Washington's reply, the local postmaster was astonished to be told that his requisition had been denied. Why? In their wisdom, the bureaucrats noted that the machine in question wasn't built to survive the snow outside post office buildings.

The Los Angeles Department of Social Services provides another example of dysfunctional, centralized authority. That department has thousands of employees and a $1.5 billion budget to spend on welfare. The director, however, has only $5,000 of discretionary funds at his disposal. Furthermore, a task as simple as moving a computer from one department to another requires approval from a person so high in the city's hierarchy, that the staff just doesn't bother trying.

In 1973, I was trying to diagnose how to rejuvenate Sweden's governmental machinery. I asked the principals of the various min- istries to describe a problem they were unable to solve because they lacked appropriate authority. They described the difficulties involved in transferring a person from one ministry to another.

Say the ministry of foreign affairs needs a new person, and there are too many people employed in the ministry of agriculture. The principal manager-the chief administrator reporting directly to the minister of the cabinet, a political appointee-cannot make the transfer. Why? To find the answer to that question, we must look back in history. Some 200 years ago, in a move to limit the king's authority and power, each ministry was organized as an almost autonomous organization. The cabinet is the center in common, and the prime minister is only primus inter pares, first among equals. The prime minister has no authority over other members of the cabinet. To further complicate matters, each ministry has its own labor union, and the union has something to say on the subject of transferring people.

I found it would take the CAPI of 120 highly-ranked officials to change that law. That is paralysis. Is it any surprise that governments grow with no apparent growth in effectiveness?

The Behavior of Influence in the Lifecycle

In Courtship, influence is important. There is no real authority, and power derives from withholding cooperation. In Infancy, authority takes over, power switches to the inside people, and influence disappears. There is no time for talk; It is time to act! Influence takes time, and there is a shortage of that precious commodity. In Infant orga-278 Analyzing Organizational Behavior nizations, then, changes are accomplished without influence, using authorized power in a dictatorial way.

During Go-Go, influence returns, but it is integrated with authority and power. CAPI is concentrated in the founder. Success makes people accept anything.

When organizations experience failure and advance to Adolescence, under the best circumstances, influence moves to the technocrats, or worse, it disappears altogether.

In Prime, CAPI resides with the executive committee where management has both authorized power and influence. The company is systematically successful.

From the Fall phase on, the importance of influence grows as authority declines because it is being centralized. The centralization of authority signals its decline among people in the organization's lower echelons, and it doesn't take them long to discover that to accomplish anything, they need to use influence. Because that influence is, however, coupled with power, indirect power is the result. People behave nicely, but the object of such influence responds appropriately not because he is convinced, but because he fears the repercussions. The consequence of such changes is "politics." There are lots of rumors, veiled accusations, and cover-your-ass strategies. Everyone scrambles to secure a high-level guardian, mentor, coach, or-using a strategy that can prove legally treacherous-a lover.

With the next big breakdown-loss of market share and negative cash flow leading to Salem City-authority is empty, influence is gone, and power is the only remaining source of energy. This is war; There is no time for talk. To survive, all tools or weapons are considered legitimate.

CAPI over the lifecycle

CAPI measures controllability, strength, and the predictability of organizational behavior.

The location and behavior of CAPI varies with an organization's position in the lifecycle. In Courtship, it doesn't matter who has CAPI; We are in love. That is why during Courtship, people are relatively promiscuous with control. Founders give stock to people who are excited about their ideas and willing to support the new organization. Founders are buying support for their dreams awaken to a day of reckoning when they discover that their promiscuous giveaway programs have endangered their survival as leaders. That usually happens during Adolescence.

Once organizations are born, CAPI is consolidated and, most often, vested in the founders. If they have influence, which plays only a minor role at this stage of the lifecycle, founders' authorized power is sufficient to achieve implementation of solutions. But with autho- rized power alone, founders may later find that lack in influence is cause for a crisis. When organizations move into Go-Go, the more successful they are, the more arrogant their founders become, and the more power they use. The more power they use, the less they listen to others and the more detached they become. The more they behave that way, the bigger their mistakes that trigger Adolescence. As Lord Acton wrote more than a century ago, "Power tends to corrupt, and absolute power corrupts absolutely." The more power founders have, the more they use. Nobody dares to challenge their decisions. Eventually, they make major mistakes that endanger their organizations and their own power.

In Adolescence, CAPI is erratic. There is a power struggle between professional managers and the founders, between the boards of directors and the families, and between the organizations and their founders. Figure 13-5: CAPI over the Lifecycle

If an organization survives Adolescence, CAPI stabilizes in the governance system and in the executive committee, establishing certain modi operandi among the board, executive committee, founder, stockholder, and professional managers.

CAPI's decline begins after Aristocracy because of conflicts of interest among stockholders, management, labor, and technocrats. Individual CAPI is almost nil in Salem City unless a caretaker is appointed. In Bureaucracy the right hand does not know what the left hand is doing. To accomplish anything, numerous committees form. They subvert each other, and there are intramural wars. When even individual committees cannot achieve CAPI, the organization is brain dead.

In the next chapter, which details the causes of aging, we discuss how and why CAPI and control break down.