Real leadership isn’t measured by what you accomplish during good times—it’s revealed by how you act when everything starts to fall apart. Business philosopher Dov Seidman claims that how we behave in business can become a source of competitive advantage. A recent example of this was the Covid-19 pandemic, which separated the leaders who adopted convenient rules and technically-allowed actions from those who were guided by deeply held core values and focused on long-term relationships and success.

When the pandemic hit, corporate America faced its biggest test in decades. Overnight, revenue for many companies slowed to a trickle, operations paused, and uncertainty dominated management meetings. Given this uncertainty, some of our partners (tenants, lenders, vendors) seemed to adopt “situational values”, as they adjusted their behavior due to pandemic circumstances, rather than any core values they might have previously held. 

In our case, we received dozens of communications from our partners, including major retail tenants and lenders, during those early months. Knowing that our mom-and-pop tenants were truly struggling, our approach was to proactively pre-negotiate rent terms with them.

However, retailers  with billions in cash reserves and access to emergency funding sent us demands for rent deferrals, abatements, and concessions. Many major retailers, but not all,  essentially freaked out and stopped paying rent, treating us and other retail center owners as adversaries. In fact, we are decades-long partners with many of our tenants, and we  work diligently to keep the physical centers and buildings that our tenants occupy clean, well-maintained , safe, secure and well-trafficked. We continued to do so during this time period.

In contrast to these major retailers, most, but not all, of our lenders asked how they could help and what we needed to survive the shutdowns. There was a real dichotomy between groups – tenants and lenders. I believe treating landlord partners as adversaries was a poor way to respond in a crisis. 

And it was a fundamental failure of values-based leadership. Many retailers operated from what they could do (exercise contractual, and other, leverage) rather than what they should do (pick up the phone and have a conversation with us, their longtime business partners). The result was often a strained relationship. One lender squeezed us so needlessly that we made the business decision not to ever work with them again.

However, one partner, a tenant, stood apart. 

They were the only retailer who committed to pay all rents and charges regardless of circumstances. Their message to us was simple: 

“There has been a lot of discussion in the press about companies unwilling or unable to pay rent and making broad demands for concessions from landlords like you. Challenging times certainly call for unprecedented measures. I am writing to assure you that this is not [us]. We have a long standing tradition of honoring our obligations to landlords and that will not change even in the wake of the current pandemic. [We] understand that many of you are individuals or families whose relationship with us goes back decades to our earliest days. We recognize the hard-earned trust you have in us as your tenant”

They put their core values in action. They made this commitment not knowing how long the pandemic would last, or how deep the economic damage would be. They chose to govern themselves by what they ought to do, not by what they could do.

You might argue that they could afford this approach, because they’re a massive global corporation with deep pockets. That misses the point. Besides, numerous other tenants were successful retailers with billions in cash and easy access to Covid loans. These other retailers clearly had the means to honor their commitments.

The difference was in leadership, not the simple ability to pay rent. It was the difference between rule-based behavior and values-based behavior. This one tenant understood that how you behave during a crisis defines your reputation for years to come.

Instead of asking, “How much can we extract from this situation?” leaders should ask, “How can we create sustainable relationships while navigating this situation?”

At our company, we leaned into our core values throughout the pandemic. While our industry peers cut salaries due to lost management fees, we didn’t reduce anyone’s pay. We paid vendors in full, regardless of whether they could service our properties. 

These decisions cost us and our investors money in the short term, but they strengthened every relationship that matters to our long-term success. We were led by our core values, and the benefits of those actions are being felt today. (See my earlier blog post: The Power you Keep – https://bigv.com/insight/ownership-in-action/)

A crisis reveals one’s character, and there can be many such crises that have to be dealt with in business.The leaders who emerge stronger from difficult times are those who understand that sustainable competitive advantage comes not from exploiting temporary power, but from consistently acting on their core values. Our values are the principles we live by, particularly in moments of adversity and crisis.

I grew up in the family business, one of four children with a father running a successful supermarket company, which was started by my grandfather. We practically lived at the stores, sometimes running around and playing, and other times working. When my brother was 10, he was already slicing cold cuts in the deli! One day while I was in high school, I sat in my Dad’s office, and noticed two empty offices of senior level executives who had just been removed from the company. My father used that moment to teach me one of my most important business lessons, which I summarize in the phrase, the power you keep.

The lesson.

Executives lose their positions and discover a brutal truth: for some, the phone stops ringing, and a new position is hard to discover. Yet, there are others who thrive and grow after experiencing a similar loss of position. There can be many reasons for the two paths, but there is one very controllable reason: Understanding the difference between influence  derived from the position you hold within the organization, and influence derived from one’s personal network and reputation. As my father explained that day, one executive had confused organizational influence with personal influence, while the other had a balanced understanding. He called it recognizing personal power as compared to organizational power.

Though management scholars have distinguished between personal and organizational power since the 1950s, many leaders still confuse borrowed authority bestowed through an organization with influence they’ve earned themselves. The kind of power that matters most isn’t printed on your business card—it’s built through relationships that transcend one’s title.

Walk into any corporate Monday morning meeting, whether in person or virtual, and you’ll see executives’ organizational authority on display—pressing for growth, awarding contracts, pushing projects through the investment committee, controlling budgets and directing teams. What some of those executives might mistakenly believe is that their power is derived solely from their personal influence. They believe their ability to command attention and get results comes from personal respect or from earned professional capital.

Here’s what these leaders miss: organizational power is borrowed, not owned. It belongs to the position, not the person. If you’re not balancing organizational power with high quality relationships of trust and understanding throughout your career, you will be in for a hard landing.

As I mentioned above, the first executive who left the company learned this lesson painfully. During his tenure, he had his hand in large development projects for our company, decided where to buy land, and determined which developers and landlords would win lucrative deals. He had a lot of organizational authority and often wielded it carelessly. He was known to not return calls, to treat vendors poorly, and to dismiss those he deemed unimportant.

When he eventually left, his phone instantly stopped ringing. Those he’d ignored now ignored him. The man who once commanded boardrooms struggled to find new employment. He never was  able to attain a position anywhere close to the one he had with us and eventually finished his career as a solo residential real estate agent, struggling for listings. He discovered late in his career that he’d possessed only organizational power—and when the organization moved on, so did everyone else.

At our company, we strive to hire a team distinguished by extensive industry expertise and who are deeply committed to ethics and integrity, upholding a culture where our word is our bond, forward thinking and proactive decision-making are essential, and family matters. Taken together, we believe our values foster vocational relationship building and go a long way to balancing personal and organizational power for our team members.

We don’t always get it right.

In the past, we have made senior hires and promotion decisions with the assumption that the individuals had developed personal influence, and had personal integrity, believing in our core values. When those assumptions proved wrong, and when those individuals left the organization, they experienced an outcome similar to my father’s example above; they struggled and generally failed to attain a similar position of leadership within the industry. To improve our own hiring, we began to vet much more deeply our candidates’ reputations and ask more probing questions about the depths of their networks, the strength of their professional relationships and their view of our core values. These tests help ensure our future team members have the right balance.

True personal power comes from authentic relationships built over time. My grandfather, who started our company, understood this intuitively. When a young bond broker cold-called him decades ago, launching immediately into a sales pitch, my grandfather stopped him. “Tell me about yourself first,” he said. “What’s happening in your life? How’s your family?”

That broker was forced off script, and as a result of establishing a personal relationship with my grandfather, he maintained a relationship with our family for over fifty years. This broker shared with me recently that he viewed this as a life lesson, and applied it to all of his relationships going forward. He learned that business isn’t just about transactions—it’s about people choosing to work together because they value each other beyond any one deal.

The solution isn’t complicated, but it requires intention. Before discussing the next deal, ask about someone’s recent vacation. Remember their children’s names. Follow up on personal challenges they’ve mentioned. Build relationships that transcend your current title.

This is what the second executive did. Returning to my father’s story…the other executive, after being removed from the company, experienced a different outcome. Because he had cultivated and grew his personal influence, when he left the company he quickly secured a better position than he had at my father’s supermarket company. It was a great outcome for him, and to this day we still do business with him and his team.

The vocabulary has changed since the 1950s when this concept first surfaced, but the principle endures. Whether you’re a C-suite executive, entrepreneur, or aspiring leader, ask yourself: if I lost my role or title tomorrow, who would still take my call? The answer reveals whether you’ve built personal power or merely borrowed organizational authority.  Don’t be the individual who discovers too late that you only have organization power.

The relationships you cultivate matter more than the positions you hold.