By Geoff Colvin and Ryan Derousseau
May 11, 2016

This newsletter is called Power Sheet, and this morning’s news invites us to ponder the sources and uses of power.

-Who’s got more power at this moment, Donald Trump or Paul Ryan? To put it another way, which one needs the other one more? We’re watching a fascinating exercise in the use of power, which will continue tomorrow morning when the two men meet in Washington. It began last week when Ryan said he wasn’t ready to support Trump – a startling event considering that Ryan had previously pledged to support the eventual Republican nominee, whoever he was. He didn’t violate his pledge, since Trump isn’t yet the nominee, but he rocked Trump back on his heels, effectively reminding him that Ryan’s support would be extremely valuable. Trump’s response, that he wasn’t ready to accept Ryan’s views, sounded like a childish playground taunt. When Trump later tried to establish dominance by saying he might replace Ryan as convention chairman, Ryan immediately called his bluff and showed his self-confidence by saying he would certainly step down from the post if Trump asked him to.

The most likely political reality is that Trump badly needs Ryan’s endorsement in order to gain stature with conservatives, whose support he must have and mostly doesn’t have. Ryan, by contrast, doesn’t need and probably doesn’t want Trump’s support in boosting Republican candidates for the House. That is, Trump needs Ryan more than Ryan needs Trump. Just as significant, that’s the way it looks to outsiders, if only because Ryan has played his hand better. And as Henry Kissinger wrote, “In Washington…the appearance of power is therefore almost as important as the reality of it. In fact, the appearance is frequently its essential reality.”

-Following up on Monday’s newsletter: Rodrigo Duterte won the presidency of the Philippines, as expected. True to form, he promised in his first post-victory speech, “I will be a dictator, no doubt about it. But only against forces of evil — criminality, drugs, and corruption in government.” He exercised extreme power as mayor of Davao, much of it entirely outside the law as he allegedly ordered death squads to kill hundreds of suspected criminals – allegations he doesn’t exactly deny. He campaigned on promises to do the same at the national level.

-On a much happier note, I’m delighted to recommend a new book about the effectiveness of power that doesn’t seem to be power at all. David Novak was CEO of Yum! Brands – Pizza Hut, Taco Bell, KFC – from 1999 to 2015, and he was stunningly successful. In a period when the S&P increased 61%, Yum stock delivered 637%. Novak has been emphatic from day one about his secret: It’s the power of recognition. I doubt there has ever been a company that recognizes people for excellent performance as freely and as effectively as Yum under Novak. The first thing you noticed when you walked into his office in Louisville, Kentucky, is that there were no pictures of him with politicians and movie stars. Every square inch of the walls, and the ceiling, was covered with photos of him giving awards to employees around the world.

I’ve seen him do it, walking into a workspace unannounced, calling someone into a common area, and giving him or her an award with a handwritten message on it in front of colleagues. So simple, and the power of it is simply astonishing. Novak learned a lot about how to do it in his career, and that’s what O Great One! A Little Story About the Awesome Power of Recognition, published this week, describes. It’s a treatise on power of the best possible kind.

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