What new power is… and three things it is not

Across sectors and cultures, our leaders are struggling. In fact, the world may be facing a crisis of leadership, if 86% of the people polled by the World Economic Forum’s 2015 Global Leadership Index are anything to go by.

So why are people so off their game? Our explanations are starting to look well-worn: changes in technology, challenges of interdependence, daily doses of disruption. But there’s something deeper going on. The balance of power is shifting and very few leaders have figured out what it means and what to do about it. We see it expressed as a growing tension between two distinct forces: old and new power.

Old power works like a currency. It is held by few; it is closed, inaccessible and leader-driven. It downloads and it captures. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. New power operates differently, like a current. It is made by many; it is open, participatory and peer-driven. It uploads and it shares. Like water or electricity, it’s most forceful when it surges. The goal with new power is not to hoard it but to channel it.

The most obvious signs of this tension are in those “David and Goliath” moments, such as when Wikipedia vanquishes Britannica, Uber snatches the taxi’s spot, Airbnb swipes guests from Marriott, or Edward Snowdon bamboozles the NSA. But we see new power forces emerging everywhere: the spread of ISIS, participatory budgeting, lending clubs, micro-finance and Kickstarter; even the ice-bucket challenge.

But to master new power, we don’t just need to work out how to deploy new tools and bottom-up models. It’s also about understanding a new set of values: a commitment to collaboration as an end in itself, a belief in radical transparency, a bias toward more informal, networked governance, a “do it ourselves” ethos. It is telling that the Forum’s Global Leadership Index shows that influencers everywhere are prioritizing qualities such as collaboration, communication and an ability to “relate to everyday people” over more traditional qualities rooted in competition or formal authority. And where organizations can get into trouble is in deploying new power tools, yet defaulting to old power values. Uber is a prime example, using an extraordinary new power model to change the way people use taxis. Its approach challenges old power values in the way it engages directly with customers, leading to a backlash among traditional taxi drivers and, increasingly, its own driver network.

We believe that this battle and the balancing between old and new power (both in the ways new tools are used and how new values are espoused) will be a defining feature of society and business in the coming years. In an article we wrote for the Harvard Business Review, we lay out a simple framework for understanding the dynamics at work and how power is really shifting: who has it, how it is distributed and where it is heading?

But as we begin to think about new power, it is important to emphasize three things new power is not. First, it is not solely about new technology, it is about new ways of thinking and new appetites for engagement. In fact, many very successful technology companies run on classic old-power models. Take Microsoft: it trades on exclusivity, according to its own schedule, from the top down. Similarly, Apple’s past 15 years have been defined by a superbly executed old-power strategy, balanced with a savvy layer of new-power engagement via its grassroots fan base and the “maker culture” of the App Store.

Second, new power is not inherently positive. We see thrilling opportunities in its rise, especially in its capacity to enfranchise and empower, but it has the potential to create a Tea Party just as easily as an Occupy Wall Street. It will certainly engage many more people, but it will not necessarily lead to better outcomes.

Lastly, new power is not the inevitable victor. We need to resist the techno-utopian narrative of the quick and inevitable triumph of new power over old (down with the castles, up with the crowd). As we write this, the hotel industry is engaged in a major lobbying effort to curtail Airbnb. Many governments have responded to the political disruption brought about by new power by limiting internet access altogether. And the scale of the NSA’s surveillance operations – and muted outrage in response – shows how strong the forces of old power remain. Ultimately, this is not a binary choice between old power and new; the best positioned will be those who can deploy both in the service of their goals.

More on this subject

Airbnb and the future of tourism
Why 2015 will bring a crisis of leadership
Two challenges for the digital economy
Four ways to embrace the sharing economy

Authors: Jeremy Heimans is a co-founder and the CEO of Purpose. He is also a co-founder of the online political communities GetUp and Avaaz. Henry Timms is the executive director of 92nd Street Y, a cultural and community centre in New York. He also founded #GivingTuesday, a global philanthropic movement.

Image: A man stands in the middle of Grand Central Terminal as he speaks on a cell phone, as passengers face limited train service on the New Haven Line between Stamford Station and Grand Central Terminal due to a Con Edison power problem in New York, September 25, 2013. REUTERS/Zoran Milich