Power-Distance Index Explained

Power-Distance Index is a mental model which helps explains the power dynamics between different cultures, societies and teams.

It’s a tool created by psychologist Geert Hofstede.

It will also give you leverage in a leadership position.

I watched an episode of Air Crash Investigations when I was young.

It was about a Japanese airliner which crashed due to a series of errors made by the pilot.

These errors were observed by the co-pilot.

Despite having the power to intervene, the co-pilot remained silent and allowed the pilot to make catastrophic errors.

The co-pilot had significantly less experience than the pilot and didn’t dare question his authority due to some cultural conditioning.  

Asiana Airlines Flight 214 (a Korean airliner) allegedly crashed due to similar reasons.

The same issue led to what happened at the Chernobyl nuclear powerplant disaster.

The communication between the operators and managers was sub-optimal due to the strong power-distance index of the Soviets.

As a result, errors were made which caused the worst nuclear accident in history.

What do the Koreans, Japanese and Soviets have in common?

These are cultures in which honor, respect and hierarchy are incredibly important.

Countries with relatively high power-distance indexes.

In high power-distance countries, it’s taboo to question the authority of the boss.

You have to tread carefully to keep your position.

Russia comes near the top of the power-distance index with a score of 93.

China has a score of 80.

In low power-distance countries, you have more freedom to question authority.

Sometimes you can get away with telling the boss to kiss your ass.

The United States is at 40, while Austria is at 11.

You can check out the scores here.

Mum Effect

The ‘Mum Effect’ is the tendency for people to avoid sharing bad news over good.

This generally comes from the fear of being punished.

This is why we have sayings like

“Don’t shoot the messenger.”

In the movie 300, King Leonidas kicks a Persian messenger down a deep dark well whilst screaming,

“THIS IS SPARTA!”

It’s an epic scene, but it highlights the tendency for those in power to shoot the messenger.

The mum effect can lead to serious problems as we have seen in various airliner disasters.

The more power you have over employees, teammates or mentees, the more control you have.

When you make a decision, it will be implemented quickly with no resistance.  

This is why so many people prefer having a high power-index.

We saw this during 2020.

When China had Covid lockdowns, the whole country was shut down.

People obeyed their government’s iron-fisted rule.

When the same thing happened in the US,

Certain states were open and had different rules and measures.

Your experience of Covid in New York was very different to your experience in Florida.

The US had governors arguing with the president about how to handle the situation – there were no universal rules.

Australia, a country similar in many ways to the US, had state premiers imposing different rules to the prime minister.

High power dynamics create a more centralized system, while low power dynamics are more de-centralized.

Low power dynamics breed creativity as people feel more liberated to take chances and do what’s best for the overall goal.

This is why the lower power-dynamic countries tend to lead in innovation and scientific advancements.

Big tech companies such as Google are known for having ‘sleep pods’ in their offices for employees to take naps.

They also have side-project time, which allows employees to spend 20% of their work time on tasks they deem important.

These companies help to create a low power-dynamic environment with open plan offices where ideas can be spread easily amongst different divisions.

Gmail and AdSense are two very successful Google products which came as a result of these implementations.

Ray Dalio’s Radical Open-Mindedness

Ray Dalio, the billionaire behind one of the world’s most successful hedge funds, wrote a book called ‘Principles’.

In the book he highlights some of the guiding principles he has used to create immense success.

One of his most important principles is to ‘be radically open-minded’.

This process involves curating intelligent, independent thinkers and engaging in the art of ‘thoughtful disagreement’.

As the leader, you need to learn to disregard the pleasure of being ‘right’ and discover the fulfillment of finding the truth.

Most people fail because of ego.

They can’t think objectively because their ego needs gratification.

As a result, they sink the whole ship just to keep their pride.

Ironically, those who ask the ‘dumb questions’ are usually the smartest people in the room.

Being radically open-minded is about accepting your human nature.

Understanding that your experience of this world is subjective.

You see the world through a lens unique to you.

Because of this unique viewpoint you occasionally see things others don’t.

By the same token you have blind spots others can see.  

To get the most accurate view of the world and make strategic decisions, you need to blend several viewpoints.

Learn to remove the embarrassment you feel when you are ‘wrong’.

The feeling of being ‘wrong’ has deep, subconscious roots (learn more about how Ray Dalio uses the subconscious mind). 

As a child, you were taught that being wrong was bad and being right was good.

The teacher would give you a tick for the correct answer and a cross for the wrong one.

As a result, you associated being wrong with shame; being right with joy.

The ego then created defenses, such as the emotion of ‘pride’, to shield you from the pain of being wrong.  

Power distance index tips for business

As an entrepreneur, I deal with a team of dozens of people.

To get the best results, I aim to create a low power-distance environment.

This means setting the base principles for the team and allowing them to manage certain decisions.

Giving people ‘skin in the game’ gets them more excited to do good work.

This allows for emergent results to occur through the interactions of the various ideas.

Being a micro-manager is easy.

Learning to let go is difficult.

Power distance doesn’t just apply to business or how governments manage their people.

It’s a mental model which can be used to better understand the dynamics of any group situation.

Whether it’s about how a basketball team plays together, or how family members interact with each other,

the power distance sets the tone for success.

Do this and you will be one step closer to living and dying well.