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influence and came to control the agendas and the flow of information throughout the company. Vice president of finance Ed Lundy and his group even gained control over the performance evaluation process and the ratings that determined salary progress and promotions. Not surprisingly, finance people and those loyal to the finance in-group did better: “The company’s personnel charts were marked with green tape to designate employees who were outstanding. An exceptional number of Lundy’s people, because they were smart but also because they were doing each other’s personnel reports, were graded outstanding.”8 And because finance produced numbers, not cars, it was largely immune to criticism. Finance people didn’t have to make or sell anything—just keep Henry Ford II happy and their opponents on the defensive.

WHAT MAKES SOME DEPARTMENTS MORE POWERFUL THAN OTHERS

The Whiz Kids and the finance function at Ford illustrate one source of departmental power—unit cohesion. At Ford’s finance function, there were socialization rituals—running the overhead projector at meetings, preparing briefing books, gathering articles and information—that served the same function as training in the military for the company’s young, up-and-coming executives: imparting some specific skills and knowledge but more importantly building common bonds of communication and trust that come through shared experiences. Speaking with one voice, being able to act together in a coordinated fashion, is an important source of departmental power and effectiveness.9 That’s why the military evaluates leaders in part on the cohesion of their units and why coaches of team sports work so hard to build unity of action and purpose.

Another source of departmental power is the ability to provide critical resources, such as money or skills, or the ability to solve critical organizational problems, both topics the subject of literally decades of research.10 Naturally, as competitive exigencies change, creating different pressing issues and changing the sources of money, so, too, does the locus of power. Berkeley sociologist Neil Fligstein’s historical study of the backgrounds of large company chief executives nicely illustrates this process at work.11 Around the beginning of the 1900s, entrepreneurs held the CEO positions. Then manufacturing and production became the most common backgrounds for corporate leaders: with the emergence of the large-scale industrial enterprise and national markets, solving production and engineering issues were the most critical tasks companies faced. Starting in the 1920s and into the 1930s, CEOs tended to come from marketing and sales, as selling products and services, rather than producing them, became a more important challenge. And finally, beginning in the 1960s and then increasingly in the 1970s and 1980s, CEOs came out of finance. This change reflected the growing power of the capital markets, the consensus that shareholder value was the most important measure of organizational success, and the need for companies to build strong relationships with the financial community.

Both Zia Yusuf at SAP and the finance function at Ford benefited from being ahead of the changes confronting the two companies. When Yusuf arrived at SAP, the big issue facing the company wasn’t how to design and build software: the company, filled with talented engineers and software designers, had already done that. The problem was that most of the large corporations that were target customers had already purchased enterprise resource planning (ERP) systems either from SAP or from a competitor. Therefore, in order to continue to grow, SAP needed to design products that could be purchased and readily used by small and midsized enterprises—and that required a new strategy and marketing approach. The CCT, the company’s first corporate-wide strategy unit, was able to provide strategic focus and data necessary for the change.

Yet another avenue for growth was to build or sell applications that could turn the enormous amounts of raw data sitting in these ERP systems