How Leaders Lose Power: Protecting Your Position in Organizations

Uncover how leaders lose power in organizations from Jeffrey Pfeffer’s ‘Power’: Common mistakes like arrogance, complacency, and neglected networks, plus strategies for relentless networking, humility, visibility, and navigating economic pressures to safeguard your influence.

Building power takes years of strategic effort. Losing it can happen in weeks. Jeffrey Pfeffer’s research at Stanford Graduate School of Business, detailed in “Power: Why Some People Have It—and Others Don’t,” reveals that even people who seem firmly entrenched in powerful positions face constant threats to their authority. Understanding how people lose power is as important as understanding how to acquire it—because the same behaviors that get you to the top can become liabilities once you’re there.

The Inevitability of Power Struggles

Organizations are arenas of competition for scarce positions and resources. This isn’t cynicism—it’s reality. Management researchers Jeffrey Gandz and Victor Murray surveyed 428 managers working in a variety of companies about their opinions of organizational power dynamics. Some 93 percent expressed strong or moderate agreement with the statement that workplace politics is common to most organizations, and 89 percent agreed that successful executives must be good politicians. More than three-quarters agreed that the higher you go in organizations, the more political the climate becomes, and about 85 percent thought that powerful executives acted politically.

Hierarchy is ubiquitous in animal societies—even among fish. As soon as hierarchy exists, it is natural to want to move up and avoid being at the bottom. Consequently, there are contests for dominance among all animals that travel or congregate in groups. This includes people. In human interaction, even in the absence of formal organizational arrangements, job titles, and differences in resource endowments, differentiation arises among individuals as they interact. Informal leaders with more influence emerge even if groups are just engaged in pleasurable social interaction.

The point is simple: power struggles are inevitable. You can’t avoid them by wishing they didn’t exist or by believing that your excellent work will somehow exempt you from political dynamics. The question isn’t whether you’ll face challenges to your power, but how you’ll navigate them when they come.

When Economic Stress Triggers Political Warfare

Political struggles are more likely to occur and to be more fierce, and power is used more often, when resources are scarcer and therefore there is more struggle over their allocation. Studies of budget allocations in universities found that when money was tighter, the relationship between departmental power and the amount of budget obtained was stronger.

As one venture capital partner told Pfeffer, “When the money was rolling in and times were great, I could more readily tolerate some of the partners behaving like jerks. If they weren’t making me a lot of money and we had to shrink the firm, my tolerance for their behavior went way down.” An article on the venture capital industry in summer 2009 listed numerous partners leaving as the number of principals shrank from 8,892 to 7,497 in one year.

The lesson is clear: you should always watch your back, but be particularly wary and sensitive to what is occurring during times of economic stress. That is when political turmoil and the use of power are likely to be at their peak. When there’s plenty to go around, people can coexist. When resources contract, competition intensifies, and those without strong power bases find themselves vulnerable.

This dynamic played out at Venrock, the venture capital firm. When times were good, various partners could pursue their interests without much interference. But when the financial crisis hit and the firm faced pressure, long-simmering tensions erupted into open conflict. Partners who seemed secure suddenly found their positions threatened. The turmoil at Venrock was occurring elsewhere in the industry as capital flows decreased, limited partners complained about poor returns, and the number and size of firms declined.

Power Struggles Aren’t Just at the Top

You may be thinking, “What does this have to do with me? Senior-level people who get thrown out leave with more money than most of us ever dreamed of.” But these events aren’t confined to the senior executive ranks. People can find themselves caught off guard and out of a job, even if they have done what was expected of them.

Ray was brought into Unisys, the computer company, to build a leadership development effort. He did so with great success, putting a large number of senior executives through a very highly rated program and earning the approval of the CEO at the time. But when that CEO retired, Ray faced a layoff or reduction in force—of precisely one person, himself. He did not have the support of the staff in the human resources department, which actually resented his independent success and executive access, and they eliminated him as soon as they could.

Nor is it the case that this sort of infighting and political behavior is confined just to men or to male-dominated organizations. In a nonprofit organization in the San Francisco area, when the leader stepped down and some other senior people left their positions for other opportunities, a senior woman moved quickly to try to take over control of additional functions and positions and to eliminate people she perceived as being in the way of increasing her power.

The patterns are consistent across industries, levels, and types of organizations. When leadership changes, when resources contract, when power vacuums emerge—these create opportunities for some and threats for others. If you’re not actively managing your power base during these transitions, you’re likely to be on the wrong end of the resulting realignment.

The Employer-Employee Contract Has Changed

The employer-employee relationship has profoundly changed over the past several decades, not just in the United States but in many countries. In ways big and small, both implicitly and explicitly, employers and their leaders have told their employees that they themselves are responsible for their own careers and, in many instances, their own health care and retirement.

Defined-benefit pension plans have been terminated or changed, with retirement risks shifted to employees and benefits cut. Health insurance has been abandoned or premiums and copayments have been dramatically increased. Meanwhile, people who may have retired thinking they were going to get health insurance find that companies are going through bankruptcy to shed these obligations or simply changing the deal.

Not only have layoffs, the offshoring of work, outsourcing, and other forms of “restructuring” increased over past decades; they are sometimes instigated not in response to financial stress but simply to increase profits or copy what other companies are doing. If people have to fend for themselves on the job, never knowing when or, in the United States with its doctrine of at-will employment, even why they might be let go, then they should use every means at their disposal to ensure their organizational survival—and that includes mastering the concepts and skills of power and influence.

More than 20 years ago, Paul Hirsch, now a business school professor at Northwestern, wrote a book titled “Pack Your Own Parachute,” suggesting that managers be less loyal to their companies and adopt free-agent thinking. To survive in the new world of work, managers needed to be visible, marketable, and, above all, mobile.

So don’t worry about how your efforts to build your path to power are affecting your employer, because your employer is probably not worrying about you. Neither are your coworkers or partners—they are undoubtedly thinking about your usefulness to them, and you will be gone, if they can manage it, when you are no longer of use. You need to take care of yourself and use whatever means you have to do so—after all, that has been the message of companies and business pundits for years.

Common Mistakes That Cost People Power

Beyond the structural realities of organizational life, people lose power through specific mistakes. Understanding these patterns can help you avoid them.

First, people lose power when they stop attending to relationships. Once you’ve achieved a position of authority, it’s tempting to think the relationships that got you there are less important. But as soon as you stop investing in your network, it begins to decay. The people who helped you advance will move on to helping others. New rivals will build the relationships you’re neglecting.

Second, people lose power when they become arrogant or insensitive. The research on power’s effects is clear: holding power changes how you see others and how you behave toward them. Power makes people less attentive to those with less authority, more likely to stereotype, and more willing to prioritize their own needs over others’. These behavioral changes alienate the people whose support you need to maintain your position.

Third, people lose power when they trust the wrong people or trust too much. The higher you rise, the more people want your job. Some will seek to create opportunities for themselves through your downfall. If you’re not constantly assessing who is loyal and who is positioning themselves to take over, you’ll be blindsided when the coup comes.

Fourth, people lose power when they become complacent. The behaviors that built your power base—networking, visibility, delivering results, managing up—must continue. Many people reach a certain level and then coast, assuming their position is secure. It never is. The moment you stop actively managing your power, you begin losing it.

Protecting Your Position

Given these realities, how do you protect the power you’ve worked so hard to build? First, never stop networking. Continue investing in relationships at all levels, but particularly with those who have power over you and those who are rising stars likely to have power in the future. Your network needs constant maintenance.

Second, stay humble despite your success. Actively work against the natural tendencies that come with power. Seek out honest feedback. Expose yourself to environments where your position doesn’t matter. The former chairman of Swiss Re would go back to his primary school in a village in the Alps—to people to whom he was just the same person he was when he was seven years old. This helped him maintain perspective.

Third, be acutely aware of organizational dynamics, especially during transitions and resource constraints. When leadership changes, when budgets tighten, when restructuring looms—these are moments of maximum vulnerability. During these periods, you need to be even more politically astute than usual.

Fourth, cultivate allies but verify loyalty. You need people who will support you, but you also need to be realistic about their motivations. In the typical senior management team, all the people reporting to the CEO believe they could hold the CEO position, many think they could do better than the incumbent, and most aspire to their boss’s job. Understanding this reality helps you navigate it.

Fifth, remain visible and valuable. Continue delivering results that matter to the organization. Keep building your reputation. Maintain your profile both inside and outside your organization. The moment you become invisible or dispensable is the moment you become vulnerable.

The Reality Check

If organizations aren’t worrying about you and you can lose your job in a political struggle or on a whim, why should you worry about them? Reciprocity works both ways. The message from organizations for decades has been clear: you’re responsible for your own career. So take that message seriously. Use every tool at your disposal to build and maintain your power. Pay attention to political dynamics. Invest in relationships strategically. Never assume your position is secure.

This isn’t about being ruthless or unethical. It’s about being realistic. Organizations are political systems where power matters. Ignoring that reality doesn’t make you noble—it makes you vulnerable. The people who survive and thrive are those who understand the rules of the game and play it effectively while maintaining their integrity and values.

As Pfeffer’s research makes clear, building power is hard work. Maintaining it requires even more vigilance and effort. But in organizations where power determines outcomes, understanding how people lose power is essential for ensuring you don’t become the next cautionary tale.