How Does Knowledge Speak to Power? Friendship First

Here are two facts that should open your eyes. First, more than a decade of Iraq and Afghanistan warfare has increased the mental health diagnoses in the U.S. military by 65 percent. Second, a mental health provider will recommend treatment of an unstable soldier, but the military commander can still send the soldier out on a mission – fully equipped with service rifle, grenades, and sidearm. This sounds like an extreme case, but it is actually an example of a common problem. Organizations use experts for many purposes, including those who control risks to human life, equipment, or finances, but the experts are often just advisors. The actual authority rests with the line manager in charge of operations.

The difficult relation between the non-authority expert and the authority non-expert is important to understand because the whole point of experts is to take advantage of their expertise when needed. Now we know more, thanks to an article by Julia DiBenigno in Administrative Science Quarterly. She investigated the example I just gave: U.S. Army mental health providers and their relationship with line managers (commanders) who decide how soldiers are used or treated. This is a follow-up of an earlier article byDiBenigno showing that organizational procedures can be used to help create a more successful relationship. But even in organizations that are set up correctly, individual experts can still fail to reach the powerful line command.

The main difference between success and failure was timing and speed. The mental health providers had a wide range of tactics to gain access to the commanders and subsequently gain their trust. What tactics they used depended on their resources. Because the army values military experience, anyone with military service or endorsement could use that to be recognized as an insider. Because the army values manhood, participating in rigorous training signaled commitment. Because the army values rank and protocol, learning and strictly following these helped communications. Doing each of these things quickly was essential because any specialist will sometimes make recommendations contrary to a commander’s wishes, and it is essential to build rapport before the first conflict happens.

A worrying implication of this research is that so much depends on the personal characteristics and initiative of each expert. Two-thirds of the provider–commander connections were good enough that the commander often followed the provider’s recommendations. What about the soldiers under the command of the other one-third of the commanders?  One-fifth of the providers were currently serving in the military, giving them a great advantage in gaining commander trust. What about the other four-fifths of the providers? Half the providers were female, in a context where gender is very meaningful. They would start out at the bottom rung of the trust hierarchy but could climb by, for example, participating in training. The men started out higher on the trust hierarchy but might fall quickly if they didn’t prove their manhood.

All these findings suggest that the expert’s path to influence is a complicated one in organizations. My intuition is that it is probably worse in many other organizations than the army, for two reasons. First, the army is a pretty nonpolitical organization if we go far enough down the ranks – its culture of valuing “straight shooter” communication rather than intrigue reduces intra-organizational politics. Second, an army at war has an external enemy and an understanding that all insiders – even mental health care providers – are on the same team.

The best advice to line managers from this research is to pay very careful attention to the experts, because many of them will not know how to gain trust and communicate their concerns. They need managerial attention and help, and you need their expertise.

DiBenigno, J. 2019. Rapid Relationality: How Peripheral Experts Build a Foundation for Influence with Line Managers. Administrative Science Quarterly, forthcoming.

Competitive Slander: Using the Media to Wage Market Battles

We often see signs of organizational competition in the market turning into battles fought on multiple fronts. Apple and Samsung have good-looking telephones that compete vigorously in the market, and their lengthy Patent War is famous. Ride-sharing firms Lyft and Uber compete in the market but have also accused each other of covertly placing fake orders and then canceling them. They also fought in the media when Uber used taxi workers’ protest against the U.S. immigration ban as a business opportunity: Lyft struck back with a strong stance against the morality of Uber’s efforts and made a donation to the ACLU, which accelerated the trend of #DeleteUber across social media.

Just how far will organizations go in such battles? A forthcoming article by Benjamin M. Cole and David Chandler in Administrative Science Quarterly looks at the famous War of the Currents between Edison and Westinghouse and finds ample evidence of how such battles can escalate. The War of the Currents started when Westinghouse realized that the Edison direct current (DC) electrical system could not be used for long-range transmission of power. He obtained the necessary patents for alternative current (AC), which transmits much more efficiently, and his company was soon a major competitor of the Edison companies. The market competition expanded into a full-blown rivalry when Edison started using competitive slander to turn media and consumers against AC and Westinghouse.

Edison’s recipe was simple: Make the newspapers publish stories about experiments showing that AC easily killed dogs and other animals, so that people would associate AC with danger—unlike the safer DC. A simple strategy, but also a grotesque one. To make it work, he needed to conceal his association with the experiments, having an electrical engineer act as the front man, and also make them seem legitimate by conducting them in famous institutions’ facilities. As a final step, his company made direct contacts with politicians who could influence the marketplace.

The campaign worked because it was well orchestrated and because Westinghouse initially thought there was no need to strike back. This left Westinghouse exposed, and when his company did respond, it chose an ineffective approach—directly countering the Edison attacks through attempts to discredit the message and expose Edison’s methods as sensationalist and immoral. This was ineffective because Edison had chosen a vulnerable point to attack: although killing dogs is immoral, it correctly illustrated that AC is more dangerous than DC at comparable voltages.

I suppose we could have all ended up with expensive DC as a result of this rivalry. But in the end, Westinghouse won by returning to the foundation of the AC advantage: it is a superior system for distributing electrical power over long distances. He won the bid to illuminate the city of Chicago as part of the World’s Columbian Exposition. He sank considerable resources into the contract, making it a financial loss but a spectacular success as a PR event for AC and for Westinghouse technology. Soon after, AC dominated and even Edison started marketing AC systems.

The War of the Currents has many lessons for current organizations, and I want to highlight one disturbing and one promising lesson. The disturbing lesson is the effectiveness of attacking: when the attacker picks the target well and is willing to go far, the rival is very likely to get hurt. The promising lesson is the effectiveness of sticking to basics: when the rival emphasizes its own strength rather than countering the attack directly, its chances of recovering are best.

Cole, B. M., and D. Chandler. 2019.

"A Model of Competitive Impression Management: Edison versus Westinghouse in the War of theCurrents." Administrative Science Quarterly, forthcoming.

Beer Reincarnated: How a Modern Industry Can Become Reinvigorated by the Past

There is evidence that beer has been around for about 2,500 years, but over time the technology for producing it has changed quite a bit. A modern beer brewery is scalable almost without limit, and there are existing and in-construction plants that can produce more than 20 million hectoliters of pilsner (pale lager) in a year. That production exceeds the weight of 3 million people. Modern plants are very cost efficient, and the beer quality is completely consistent. Yet there is currently a strong movement away from beer produced in these large, modern, and efficient plants toward smaller craft breweries producing a variety of different beers. Why is that?

For consumers, the answer is pretty clear: people generally like variety. Many people like and can pay for premium products, so the main issue is whether they would look to beer for variety instead of products like wine or spirits. But an article by Jochem Kroezen and Pursey Heugens in Administrative Science Quarterly looked at this question from a different viewpoint: that of the beer makers who have decided to form new breweries to compete with the established, efficient, and powerful brewers using modern manufacturing techniques. This is a more interesting perspective because for producers taking this path, it is not enough to believe that consumers might like their products—they also need to believe that enough consumers will pay enough money to make such businesses viable.

It turns out that the viability of smaller craft breweries is rooted in local variations in the products and processes of the beer industry’s past. This research was done in the Netherlands, which had a remarkable variety of beers and brewers in the 19th century, before the turn toward mass production of pilsner, a light and standardized pale beer. In the mid 20th century, when variation in the industry was all but extinct—and the industrial pilsner brewers had a stranglehold even on distribution—the flicker of the craft brewing industry we have today began with a return to the past in search of ways of brewing the distinctive kinds of beers available before industrialization.

Small associations of beer lovers, members of former brewing families, and home-brewing enthusiasts in the Netherlands were inspired by the growth of craft brewing in other countries, such as the United Kingdom and Belgium, and thought that the Dutch brewing industry had a history that could be reincarnated in a modern form. They wanted to restore local traditions through drawing on existing recipes and knowledge passed along in the brewers’ families. To them, craft brewing was a way of returning to the diverse tastes and artisanal production methods of the past, which was filled with community traditions such as local brewing. The breweries that opened because of these enthusiasts’ efforts were often literal copies or reinterpretations of the past.

These “reincarnated” breweries proved that craft breweries could be viable if their beer was sufficiently distinct, and so it opened the door to others who had different ideas. Some brewers thought that although the past might have been good, the world has moved on, and better-tasting beer can be made by using craft techniques as a form of artistic expression. These brewers had their own ideas of what beer should taste like, access to broad knowledge about craft beers in different parts of the world, and the ability to buy ingredients (such as hops and yeast) from anywhere. They appreciated the diversity of beers in the past but did not feel constrained to use only the ingredients, recipes, and processes that had been used in the past. To them, craft brewing was a way to express themselves as artists of taste, just as other artists express themselves visually.

Still other brewers saw technology as a tool that craft brewers could use just as industrial brewers did. After all, the mass production done in a large-scale brewery is a product of the industrial revolution 200 years ago, but current technology can be used very flexibly and precisely to customize products. To them, the history of craft brewing was also one of constraints, because the old breweries did not have access to the means of controlling production and testing the beer that are now possible. A modern craft brewer can, with modest investment, pursue perfection in the brewing without giving up on variety, because a modern craft brewery can easily switch between brews. To them, craft brewing was a way to reach perfection at small volumes.

Reincarnation means rebirth in a different body. This is exactly what happened in the Dutch brewing industry: the past was drawn upon as an inspiration, but the result was different and arguably more diverse than the past that inspired it, as craft brewing became big business and challenged the dominant players, transforming the industry in the process.

Kroezen, J. J., & Heugens, P. P. M. A. R. 2018. What Is Dead May Never Die: Institutional Regeneration through Logic Reemergence in Dutch Beer Brewing. Administrative Science Quarterly, Forthcoming.

What Can the West Learn from Kenya’s Stock Market?

The nations that are Western, Educated, Industrialized, Rich, and Developed (WEIRD) have long experience with markets and democracy and are rightly proud of these. They hold the world’s oldest joint stock company (established in 1288 in Sweden), stock market (1602, in the Netherlands), and democracy (930, in Iceland). But they also started the world’s greatest economic downturn (1929, in the U.S.) and greatest war and genocide (1939, in Germany). Now that we have entered an era with significant threats to markets and democracy, it may be time for the WEIRD nations to learn something from Kenya.

Kenya is a complex nation with markets threatened by distrust and corruption and democracy threatened by ethnic divisions and conflict. This makes it ideal for studying the formation of trust in the form of stock market participation spreading beyond the well-connected elite, creating a market for investment that includes many ethnic groups and income levels. An article by Christopher B. Yenkey in Administrative Science Quarterly looks at how this was done and has many useful lessons for those who want to maintain and grow trust in markets and societies across the world.

Let me take just one example of what we can learn from Kenya. Investments require some level of trust, which is difficult in a society in which some banks are corrupt and people worry about what other ethnic groups might do to them. How is this trust created? As the figure to the right shows, it spreads from many starting points as citizens hear about others nearby making investments and gaining profits from them. The decision to invest is determined by the balance between fear and hope, and both are influenced by what happens to other people. Importantly, people pay attention both to their own ethnic group and other ethnic groups, and they can learn from the experiences of those they do not fully trust.

What if the distrust is so strong that it amounts to rivalry? Some of Kenya’s ethnic groups saw each other not only as different and untrustworthy but also as rivals for economic and political power, so we know the answer to that too. The figure below shows that more-successful rivals pushed people away from the stock market, suggesting that potential investors came to see the profits of the rival ethnic group as a sign that the rival controlled the market, so that they could not profit from it. The figure also shows some easy ways of making this effect go away. Religious integration in the communities also integrated markets. Advertising that emphasized nation over ethnic group (by using the shared language) also integrated markets. Finally, spatial integration – having neighbors who were of the rival group – had the same effect. All of these mechanisms helped spread participation in the stock market for low-income Kenyans, helping their income and the economic growth of the nation.

Democracy means contests for power, and these contests can be done in many ways. Tribalism and distrust may help someone gain loyal followers, but at the cost of tearing up the trust that underlies markets and the democracy. Kenya teaches us how the torn fabric of trust can be mended, as one of the many steps needed for a society in which everyone is welcome to contribute and gain rewards.

Yenkey, C. B.

2015 "Mobilizing a Market: Ethnic Segmentation and Investor Recruitment into the Nairobi Securities Exchange." Administrative Science Quarterly, 60: 561-595.

Using Subordinates to Manage Managers: Influence Tactics that Work

It is well known that organizations work well when subordinates know how to manage managers. Experienced work groups often need to teach their new and inexperienced manager what routines are important because they work much better than the alternatives. Work groups facing new conditions often need to tell their experienced manager that the world has changed and that their work needs to change with it. Managerial effectiveness starts with the ability to listen to subordinates and learn from them.

When organizations need to change, can the subordinates managing their managers be a good tool for making it happen? Research published in the Administrative Science Quarterly by Katherine C. Kellogg answers this question. The managers she studied were actually medical doctors who do a range of managerial tasks and are at least as protective and assertive of their own ideas and ways of working as regular managers. If a hospital wants to change its overall activities, who are best situated to manage the medical doctors: medical directors or medical assistants? Kellogg’s research showed what happened when two hospitals tried to implement patient-centered reforms in their clinical practices.

As you might have guessed from the title, medical directors were not very useful for getting doctors to change their practices. A doctor can easily ignore instructions from higher levels in the organization, or even protest them. A doctor can also ignore suggestions from lower levels in the organization, but one of the hospitals found a set of tactics that made the suggestions coming from subordinates very persuasive. Those subordinates were medical assistants, who help to manage doctors’ patient inflow, time, and information. Each medical assistant works with multiple doctors, so they are central nodes in the doctor network. By having medical assistants meet without the doctors in the room, the hospital let them benefit from the experience of other medical assistants in their networks and become even more central. The hospital could also use the meetings to motivate the medical assistants, teach them how to influence doctors, and have them teach each other how to do so.

The medical assistants ended up with a wide range of influence tools and with a network that gave them exactly the information needed to use those tools well. They put together information for the doctors that helped the doctors follow reforms while still feeling that they were in charge. After all, the doctors felt they were reacting to better information, not to the assistants assembling it. The medical assistants would ask the doctors to change practices to help the assistant work better, and the doctors would grant such favor requests because they knew they were dependent on the assistants and felt that favors were a good reward. The medical assistants would strategically choose which doctors to approach first for changing practices and would let other doctors know when those first doctors had agreed to make changes. That way doctors felt they were not following assistants but other doctors.

Why do we know that these tactics for managing the manager work? As I wrote earlier, two hospitals tried to implement patient-centered reforms, but only one succeeded – the one using these tactics. Maybe not all of these tactics were needed in the hospital, or are needed elsewhere, but Kellogg’s research certainly shows how managers can be managed to make changes in an organization.

Kellogg, K. C. 2018. Subordinate Activation Tactics:Semi-professionals and Micro-level Institutional Change in Professional Organizations. Administrative Science Quarterly, forthcoming.