(FORTUNE Magazine) – LISTEN TO the new gospel of executive power: ''The more you have, the less you should use,'' says Reuben Mark, CEO of Colgate-Palmolive. ''You consolidate and build power by empowering others.'' Mark expresses an increasingly common view. Virtually all the chief executives polled by FORTUNE (see following story) say they share power more than they did five years ago, and more than the CEO before them. ''My predecessor was more imperial, and I tend to be more collegial,'' says USX's Charles Corry. Down the street at PPG Industries, ''We are now more team-oriented,'' says Vincent A. Sarni. The word ''participatory'' crops up again and again as the leaders of corporate America discuss power. Not that they relish the discussion. ''I don't like to talk about power,'' says Mark. ''I prefer to think about it as responsibility and authority.'' Chief executives observe that major changes are under way in how power is deployed in U.S. corporations. Management experts -- business school professors, consultants -- agree. You can't manage today's work force like yesterday's, they say. The military command-and-control model went out with red meat. Your job is to set a strategic direction, get your people to agree, give them money and authority, and leave them alone. This sounds good but raises a few large questions. Most people agree on what power is: the ability to get things done, to get people to do what you want, to make the final decision. If the boss exercises power less directly these days, how does he make sure that things get done, and done right? Where does power accumulate when hierarchies are flattened or when an organization is decentralized? The tyrannical CEO may be on the way out; the new boss is a nicer guy. But is he any less powerful? Professor John Kotter, who devised the Harvard business school course Power and Influence, says that power comes in several forms ''lined up on a shelf'' for a leader to choose from. The experts list five basic kinds. The first is the power to reward -- to give someone a promotion, a raise, or a pat on the back. Its twin is the power to punish: to fire someone, to send him to Fargo, North Dakota, or to put her in charge of ''special projects.'' Third is the power that experts call authority. Authority can be specific, and specifically granted -- the right to sign $100,000 contracts or to approve a package design. Or it can be the office equivalent of ''because-I'm-the-Mommy '' power: ''Package color may be my job, but the boss wants blue.'' The fourth kind of power derives from expertise: ''I know the market research better than anyone, and the research says red will sell better than blue.'' Finally, psychologists speak of ''referent power,'' which attaches to a leader because people admire him, want to be like him, or are wowed by his integrity, charisma, or charm. Jane Halpert, a professor of industrial and organizational psychology at Chicago's DePaul University, points out that the first three -- reward, punishment, and authority -- come with the office. The higher your rank, the more you usually have. But expertise and referent power inhere in the person. They can exist anywhere in an organization -- in a crackerjack CAD/CAM engineer or a secretary who's the only one who really understands the files. The better the leader, argues Halpert, the more likely he is to rely on the personal sources of power. In particular, the power to punish ''would be the last one I'd use. You get back a lot of anger. Really effective leaders almost never have to put the screws on someone.'' This -- away from power based on position, toward the personal kinds -- seems to be the direction corporate America is heading. The power to reward appears increasingly circumscribed by obligations like affirmative action, by formalized compensation systems, and by the fact that you have fewer promotions to hand out after you eliminate two layers of superfluous vice presidents. Punishment can't be used promiscuously on a mobile work force. Says Raymond E. Miles, dean of the University of California business school: ''The raw use of power doesn't have the acceptance it did 25 years ago. People aren't willing to put up with it.'' Power is also changing within companies because the nature of their organization is changing. New Age gurus hawk ''pyramid power,'' but management gurus see the death of the pyramidal organization. In The New Realities, Peter Drucker predicts that in so-called knowledge-based companies, hierarchies will give way to something resembling a symphony orchestra, with dozens or even hundreds of specialists reporting directly to the conductor/CEO. Corning Chairman James R. Houghton says flatly, ''The age of the hierarchy is over.''

ONE COMPANY that has taken the new view of power to heart is Johnsonville Foods, a relatively small (1988 sales: $100 million) but rapidly growing specialty foods and sausage maker in Sheboygan, Wisconsin. Says Ralph Stayer, 46, CEO of the family-owned business since 1978: ''Flattening pyramids doesn't work if you don't transfer the power too. Before, I didn't have power because I had people wandering around not giving a damn. Real power is getting people committed. Real power comes from giving it up to others who are in a better position to do things than you are. Control is an illusion. The only control you can possibly have comes when people are controlling themselves.'' Stayer discovered, as Mikhail Gorbachev has, that perestroika isn't easy. ''I had to work my fanny off to get people to want to take power,'' he says. ''You've got to take your goal and break it down so that each person is accountable for his part of it.'' Stayer stopped rewarding people for length of service. Now, ''No one gets a raise unless he takes on more responsibility.'' Gone, too, is Johnsonville's personnel department. As part of the effort to empower employees, it has become the Personal Development Lifelong Learning Department. Workers meet with a counselor who helps them articulate their goals and dreams -- be they becoming a senior vice president, putting kids through college, or learning to grow roses. Each receives a small allowance -- $100 a year -- to spend on a personal-growth project. Some apply to college or graduate school, others join a cooking class -- Stayer doesn't care. For big expenses like education, employees also may get scholarships. What does Johnsonville get? A lot, insists Stayer. ''Our people are an appreciating asset, not a depreciating one. They're more willing to change, to question. When they see that they can change something in their personal lives, they bring that attitude to work.'' Since 1985 volunteers from the shop floor have written the manufacturing budget. At first a financial man walked them through the process, but now he just kibitzes. Last year, when the sales department aimed at upping volume 40%, the manufacturing group set -- and achieved -- a goal of providing the additional output while holding cost increases to 20%. Another group of workers designs the manufacturing line. If the workers want new equipment, they themselves do the discounted cash flow analysis to back up the request for it. Stayer wants goals to be set as far down in the company as possible, saving top managers' time for choosing which goals should have first claim on the company's capital. If all this makes you think he has spent too much time in a hot tub, note that in the last six years Johnsonville has doubled its return on assets, and that sales, rising more than 15% a year, have grown twice as fast as the payroll. Why give up on centralized control now, after hundreds, maybe thousands of years? In a sense, the cause of the change is change itself. In an environment rapidly altering due to intensified global competition and new technology, CEOs need to promote speed, flexibility, and decisiveness. When every customer demands special service, every sales rep has to have the power to offer it. He can't do that in what Miles calls ''the multi-multi-level organizations, which like great big thunderstorms suck everything up to the top.'' In a rapid-change world, leaders have to be free to think strategically, which often entails delegating operating authority. John Nevin, who retired this year as CEO of Firestone Tire & Rubber, which is being combined with the other North American operations of its parent, Japan's Bridgestone, has twice confronted massive change. He was president and then chairman of Zenith from 1971 to 1979, when the Japanese moved into consumer electronics, and then head of Firestone when the tire industry continued to struggle through the blowout caused by the advent of radial tires. In a stable world, says Nevin, ''the CEO was really the chief operating officer. Ford made cars, U.S. Steel made steel, Motorola made car radios, and the role of the CEO was to improve their design, manufacturing, and marketing.'' Set the world spinning faster, however, and Ford's Donald Petersen began to get a third of his profits from the finance business; USX's David Roderick became an oilman; and Motorola's Robert Galvin Jr. learned to slice silicon wafers every which way. The result: ''You change what you're managing.'' While the CEO and his new best friends -- the strategic planners, consultants, and outside directors -- explore new possibilities, ''somebody's got to keep the business running during alterations.'' BUT HOW is the CEO to confer the necessary power on subordinates without abdicating his responsibility for the organization's performance? Here three things help the most, say the experts and the CEOs: unambiguous and loudly public delegation of authority, a rigorous planning process, and strong communication. Clear delegation is crucial because the CEO who vests power in his subordinates for all to see is, in effect, cloning himself. It's not just title inflation that explains why so many second-tier executives are coming to be called presidents or CEOs of their divisions. By involving them as a team in key corporate decisions, the top boss ensures that these surrogates share his goals. Then he can send the mini-CEOs back into the company, making it clear that their use of power is not to be second-guessed. Headquarters staff are typically the first victims of such decentralization. Staff are second-guessers by nature. Says Harvard's Kotter: ''Staff make it very, very difficult to nurture leadership. The emerging leader will run into 16 staff guys, these checkers. They eat leaders.'' More CEOs are coming to understand this. Reginald Jones ran General Electric using a strong staff system that his successor, Jack Welch, has dismantled. Five years ago at Owens-Illinois, says CEO Robert Lanigan, ''There was a lot of time spent in exercising the power of this office through the corporate staff.'' Staff has been dramatically reduced, and line managers' salaries pegged higher than those of staffers. The result, according to Lanigan: ''The staff are there as consultants, as advisers to me and to other line people.'' At Heinz, Chairman Anthony J.F. O'Reilly has cut the staff out of the loop completely. ''There is no interface between staff and the presidents of the affiliates,'' says O'Reilly. ''No ambassadors, no courtiers, no fonctionnaires. It's me and the president of an affiliate, one on one.'' Out of a worldwide work force of 50,000, only 150 are on the corporate staff. The staff-like units that remain are located deeper in the Heinz organization, and their relationship to operating units has changed. Mary Ann McCollough runs one such unit. As general manager of marketing services for Heinz USA, she provides consumer research, promotion and advertising support, and test-kitchen services principally to the four divisions of Heinz USA, including Weight Watchers. She has no direct reporting relationship with her clients. And ''clients'' is the word: McCollough bills the line businesses for her unit's services. Market dynamics, not a hierarchy, determine what her unit does. Its day-to-day work is more likely to be critiqued -- pro or con -- by the units she serves than by the VP to whom she reports. USING MARKET FORCES to contain staff power is a growing trend. At Colgate, advisory groups in marketing and technology bill operating units for their help. Westinghouse's telecommunications staff has taken the process to its logical end: It now sells its information-services expertise outside the company under the name Wescor. Somewhat ironically, decentralization of power has also brought with it a renewed emphasis on formal planning. Says J. Carter Fox, CEO of Chesapeake Corp., a $600 million paper and forest-products manufacturer: ''We control the operating units through a system of profit plans and strategic plans.'' They're rigorously debated and analyzed, and ''once we have an approved < strategy and a profit plan, I want that person to take the initiative and let me know what he's done later.'' Managing the boundaries for such initiative can be tricky. Once, in an emergency, a general manager ordered a $1.5 million piece of machinery to replace one that had suddenly gone kaflooey. He didn't tell Fox beforehand, although the expenditure exceeded the limits even of what the CEO was allowed to spend without prior board approval. ''I wouldn't want that to happen often,'' says Fox, who with his board approved the purchase retroactively. Variations on the old philosophies of management by objectives and management by exception flourish under the new regime. At Heinz, says senior vice president David Sculley, 43, who oversees Weight Watchers, ''We manage by exception generally'' -- using variances from projections to provide clues that something is going awry. ''There's a goal post that is clear for every manager in the company -- yearly and quarterly. Responsible managers won't make decisions inconsistent with those goals. And secrets are not well kept in our company. When we see a problem developing, we jump on it.'' COMMUNICATION is the most important source of personal power. You don't have to make everyone march in lock step if you're sure each is heading in the right direction. Says Heinz's O'Reilly: ''It is the responsibility of the leader to provide inspiration, in any style with which he is comfortable. It can be the low-key dedication to frugality that was the hallmark of my predecessor, or a high-style, exhortative devotion to rhetoric, which is more my own.'' To get the word out to its employees, Colgate sends around videotapes the way the government sends around forms -- ''More than any company in the country,'' Reuben Mark guesses. Employees watch taped quarterly financial and technology reports, along with special videotapes on issues like corporate policy toward South Africa and the rights of women. Says John Bryan of Sara Lee: ''When you get large, you have to go to the pulpit.'' You also have to mingle at the coffee hour. The toughest challenge for an executive who gives up operating authority is to obtain firsthand information on how the business is running. Power in a old-style hierarchy may have ''an abstract quality, with a lot of process and not much content,'' says John Rosenblum, University of Virginia business school dean. But power in a flat company can get remote too, as the span of control broadens. Without a big staff receiving hundreds of reports, how do you keep track of it all? The peripatetic CEO, forever flying off to a distant outpost of his far-flung empire, is compensating for the remoteness he may have created by delegating authority. Smart CEOs of decentralized companies realize that they have to actively encourage communication among the different parts of the organization. Chesapeake's Carter Fox, for example, requires his division heads to take turns making presentations to the board about the entire company. Heinz promotes communication across the company through interdepartmental task forces, some short-lived and some continuing, that share knowledge and make policy on subjects such as purchasing and media buying. The advisory groups at Colgate serve as channels of communication as well as sources of specialized expertise. THE CEO MUST also take pains to see that all those independent operators running the company's different businesses have a care for the welfare of the whole. O'Reilly does this with money and charisma. Heinz executives enjoy lavish stock options and other incentives such as bonuses for short- and long- term performance. In O'Reilly's decade as CEO, employee ownership of Heinz stock has jumped from 4% of the total to 16%. All employees at the same level receive the same incentives based on the company's overall results, so their personal fortunes are tied to the success of the whole, not of their particular operation. Thus, while vesting great autonomy in his managers, ''I have banished the notion of territorial privilege,'' O'Reilly says. He devotes much energy to building up camaraderie with weekend house parties at his Irish estate, Castlemartin, or working retreats -- ''Rolling Rock sessions,'' in company parlance, after the Pittsburgh country club where many take place. These gatherings hammer out policy and hammer in the company culture. One result, according to O'Reilly: When senior executives come in from the volleyball court to divvy up the marketing budget or capital funds, ''our decisions are virtually always unanimous.'' FORTUNE 500 CEOs may delegate and share more than before, but only a few say they have less power. The paradox of the new style in power is that to delegate it, and shake things up, itself requires a forceful use of power. Wrote Machiavelli, still one of the reigning experts on the subject: ''There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.'' If power is to be given to a new breed of mini-CEOs throughout the company, they must be trained and chosen more carefully than ever. They may even have to be men and women new to the organization. Says Reuben Mark of his effort to push power down at Colgate: ''I originally thought I could do it with the same people.'' He discovered instead -- as did almost every other CEO whom FORTUNE talked with -- that he had to clean house, that is, to wield the oldest, crudest form of power. Ralph Stayer had to fire a key sales executive: ''One day I conferred this blessing on him, 'From now on you'll make your own decisions.' The poor guy couldn't deal with it. I'd trained him extremely well in not taking responsibility.'' BUT WHEN the empowering of subordinates works, the total power in the organization available to the CEO may well increase. More people find ways to use the personal kinds of power latent within them. Harvard's John Kotter explains: ''When you decentralize in a management sense, it does take power away from the corner office. But decentralizing leadership is different. The more power in the whole organization, the more you can influence and change.'' Management is an essentially conservative act; it helps you do better with the resources you have. But leadership can help you create new resources -- ''new products, new labor relations, new energy that, in turn, produce more power.'' Take something as seemingly straightforward as spending authority. Surely if the CEO raises the limits on what a manager can sign off on from $50,000 to $100,000, the CEO has lost some of his power to the manager? Not so, argues consultant Allan Kennedy, co-author of Corporate Cultures. The key question about that new sign-off authority, he says, is ''Subject to what? Subject to keeping within the budget, subject to the goals established for the division, subject to your annual review . . .'' The fact is, says Kennedy, ''You don't give away power -- you barter with it.'' The boss who gives away power will extract a price for it. What he should receive, at the very least, is a sharpened sense on the part of his subordinate of just what he or she is responsible for. The idea behind sharing power more broadly is to move decisions and resources as close as possible to where action can be taken -- not to spread power around, but to pinpoint it. The decisions that result are faster and cleaner, so more decisions can be made, more work done. To Heinz's O'Reilly, there's a big difference between power that is decentralized and power that is diffused, as in ''a local planning commission, where many people can say no but it's unclear who can say yes.'' This is why the most radical visions of power sharing won't work. These tell tomorrow's managers to be prepared to shoulder responsibility without authority, to learn to get things done by discussion, encouragement, and faith in everyone's expertise -- the hope that reason will reveal the best course of action, which the organization will automatically adopt as it becomes apparent. Like Communism, it looks better on paper than in practice. As Firestone's John Nevin points out, ''If you want to drive a person crazy, the easiest way to do it is to give him a deep sense of responsibility and no authority. And the definition of terror is to give someone authority and no responsibility.'' WHAT WILL remain true in the best organizations, whatever else changes, is that power ultimately derives from performance. You can almost feel it flow to an executive who consistently performs well. Says Sara Lee's Bryan: ''You see it in his ability to take on and argue with his superiors. He directs his managers with more authority and resists staff people more easily. He becomes a star, and over time comes to seem indispensable.'' What's true for the individual is also true for the organization, or the unit of the organization. The decentralization of Heinz had its origins in this principle: 25 years ago the company's U.K. subsidiary brought in 85% of its worldwide profits. As a result, says O'Reilly, who joined the British team in 1969, ''the authority that flows from performance -- which is real power -- vested itself automatically in the English company.'' Now, with 60% of profits coming from the U.S. and only 13% from Britain, American managers exercise more power than before. Share power, and if profits go up everyone will praise the brilliant way you unleashed the latent energy of your people. But if profits go down, everyone will condemn the sloppy way you lost control of the company. Professor Robert Bies of Northwestern's Kellogg business school observes that the business reality these days is that ''it's a tougher world, a leaner world, a meaner world.'' In this world, all that you can do by way of empowerment, teamwork, and participation can't change one central fact: When it comes to power, the bottom line is the bottom line.