First of all, we need to explain what power means. Generally speaking, power means the ability to influence the behavior of employees in order to achieve certain goals. The power of a single person is limited, especially in large logistics companies where power is distributed across many shoulders. The situation is different in smaller and medium-sized logistics companies, where power is limited to a single person, for example in an owner-managed freight forwarding company to the sole managing director of a limited liability company or to a few individuals.

Power is not the same as leadership

Many employees perceive power negatively, as something "bad". Power is neither good nor bad, but it is a mandatory "task" that someone has to take on so that the necessary decisions can be made. Ultimately, it is important for every logistics company that the person or group of people performs the task in such a way that, on the one hand, the company's goals are achieved and, on the other, an abuse of power is prevented. Incidentally, leadership is not the same as power. Power and leadership are neither the same thing nor the same thing. There are employees who have a lot of influence on the climate in the logistics team or on the processes in day-to-day business, but at the same time they do not lead a team, i.e. they are not in a management position.

Many employees wonder how power is created. Ultimately, the company gives power to selected individuals, for example a board member for logistics. Power cannot be taken away unless the manager deliberately abuses their existing scope for decision-making in order to exert influence on areas of the company or projects that exceed their area of responsibility.

The question arises as to what forms are available to regulate the question of power in the company. Two examples: firstly, through hierarchization - that is, certain employees are in turn subordinate to certain employees in order to make decisions that can only be made by the people who have been endowed with power. In addition, power is exercised through standardization - i.e. regulations, agreements, job descriptions and the like.

When opinion leaders and heroes seize power

In addition to hierarchical power, there is an informal power in many logistics companies that has developed specific to the organization. This involves opinion leaders. Opinion leaders are the people who succeed in demonstrating their competence. The person legitimizes themselves in projects with their knowledge, experience, facts and figures, which they bring to meetings with great skill. These are often dominant people who appear self-confident, but who also often tend to abuse their power, which they accept in order to achieve personal goals - such as more power in the course of a promotion. These people often have a network that helps them to achieve their personal goals and only appear to have the interests of the logistics company in mind.

Logistics is also home to "heroism", which is also an informal form of power. This involves individual players or smaller teams in logistics who enthusiastically take on new projects and want to implement them at their own discretion without taking the interests of other functions into consideration. Heroes see themselves as indispensable and are difficult or impossible to lead, which - from a strategic point of view - is detrimental to the organization.

The abuse of power is a problem that can be found in every industry. Managers who abuse their power are acting against the interests of the logistics company - even if the abuse of power does not lead to a direct personal advantage, but to more profit because customers have been deliberately cheated.

The limits of power must be known

Leadership at "eye level" creates trust and reduces the risk of abuse of power. The manager who has been given power must be aware of its limits. The logistics company can only achieve this if it operates transparently, flanked by clear framework conditions that are subject to regular internal audits in order to uncover any compliance violations due to abuse of power. Employees who recognize a manager's abuse of power should act swiftly, because ultimately it is also about securing their own job, which can be in danger quite quickly, as the huge bankruptcy of Wirecard showed, for example. The fact that employees should act swiftly is anything but easy to implement, as many fear, for example, that they will be sanctioned by their line manager if they report a compliance breach to the management that is attributable to an abuse of power.

To allay employees' fears, many logistics companies have set up a hotline where they can report abuse of power. It is also crucial that the logistics company has a policy that clearly regulates the consequences of abuse of power. Abuse of power can be seen in daily practice, for example, when middle-level managers refuse to follow internal guidelines, which top management must stop. In addition, top management is largely responsible for developing a corporate culture so that abuse of power has no place in logistics operations. This is a never-ending Herculean task for the entire logistics company.

Conflicts of interest harm the company's goals

Many managers abuse their power because they cannot understand the perspective of the employee concerned or, in most cases, do not want to understand it because they represent other interests. This conflict of interest is detrimental to the company's overarching goals because, for example, human resources are wasted in daily power struggles instead of being used for projects that add value to the company.

Another example of abuse of power can be seen in the manager presenting himself as an expert by spreading false information and assertions that have only one goal: to expose the actual expert in order to push through his own interests. Such power holders are a danger to the company's success because they ignore or fail to understand that ultimately it is about the overarching overall goals of the logistics company and not about the goals of an individual division.

Many managers abuse their power without really realizing it, because they have an urge to assert themselves, for example due to a lack of attention at home. This makes a feedback culture in logistics all the more important. This tool gives employees the opportunity to evaluate their superiors. Giving feedback must go hand in hand with being able to trust that the feedback will not be to the detriment of the employee. Otherwise, the feedback tool will not work because the team would hold back from giving honest feedback if personal disadvantages were possible.

Those who have power must ensure trust

The above point makes it clear how important trust is. Power must not trigger fear, which it often does in practice and cannot be completely eliminated, as this goal is unattainable due to its complexity. The supervisor, who has been given power, must convey the path to trust to his team. They can achieve this through continuous open communication by creating the confidence to be open to critical questions. However, this communication channel is not a one-way street in favor of the employee. All team members must also be open to factual criticism. This sounds obvious, but in practice it is often the opposite, as many men and women have difficulty distinguishing between factual criticism and personal criticism.

Managers who exercise power should learn to deal with negative feedback professionally. This is fundamentally a challenge, especially for young managers who are often overwhelmed by the power they have been given. Although not all negative employee feedback is always justified, not all negative feedback from employees is unfounded. The above point underlines once again how important transparency, openness, trust and dialog are in order to prevent abuse of power as far as possible.

Teamwork in the matrix

Many logistics companies have also opted for a matrix organization in order to reduce the risk of abuse of power. The matrix is about the interface between the business area on the one hand, for example contract logistics (main function), and the cross-divisional function, such as risk management, on the other. Both functional areas have equal responsibility for solving the tasks. This means that power lies not only with the main function, but also with the cross-divisional function. The matrix forces teamwork, which is an advantage because it relativizes the power in the network of relationships. However, the matrix can trigger additional power struggles due to conflicts of responsibility. This is a clear disadvantage of the matrix organization.

Conclusion: Decisions cannot be implemented without power

Entrepreneurial power is a task to be fulfilled, without which no logistics entrepreneur would be successful. Without power, necessary decisions cannot be implemented. However, power can also be detrimental or even mean the end of the logistics company if the power holders abuse their power. For example, in order to illegally increase company profits - at the expense of taxpayers.

The article appeared in materialfluss SPEKTRUM 2022 (7/22).