Welcome to Your Guide on Influencing Others!
In your journey to becoming an actuary, you’ve likely focused a lot on numbers, models, and data. However, the CB3 – Business Management curriculum reminds us that even the best technical solution is useless if you can’t convince anyone to use it! In this chapter, we explore how to assess your ability to influence others. This is a critical skill within the broader context of developing an approach to business decision-making because decisions aren’t made in a vacuum—they are made by people.
By the end of these notes, you will understand what influence is, the different sources of power you can draw from, and how to apply these techniques to make sure your voice is heard in a business environment. Don't worry if this seems a bit "soft" compared to your usual math-heavy studies; we will break it down into logical, easy-to-digest steps!
What is Influence?
Influence is the ability to affect the behavior, emotions, or opinions of others without necessarily having the formal authority to command them. In a business setting, it’s the "invisible force" that helps you get buy-in for your ideas.
Power vs. Influence: What’s the difference?
Many students use these terms interchangeably, but they are different:
Power is the potential or capacity to direct others. It’s like having a full tank of gas in a car.
Influence is the exercise of that power to achieve an outcome. It’s actually driving the car to a destination.
Analogy: Imagine you are trying to get your friends to see a specific movie. If you are the only one with a car, you have power. If you describe the movie so well that everyone gets excited and wants to go, you have used influence.
The Five Sources of Power
To influence others, you first need to understand where your power comes from. Psychologists French and Raven identified five primary sources of power. As an actuary, you will use some of these more than others.
1. Legitimate Power
This comes from your formal position or job title in the organization. For example, a Chief Actuary has the "right" to ask a junior student to complete a task because of their hierarchy.
Common Mistake: Relying only on legitimate power. If you only lead because "the boss said so," people may follow you out of obligation rather than genuine commitment.
2. Reward Power
This is the ability to give others something they value, such as a bonus, a promotion, or even just public praise.
Real-world example: A project manager offering a team lunch if a deadline is met.
3. Coercive Power
This is the opposite of reward power. It is the ability to punish or withhold rewards. While it can get quick results, it often damages relationships and hurts long-term decision-making.
4. Expert Power
This is crucial for actuaries. It comes from having superior knowledge, skills, or experience. People follow your lead because they trust your technical expertise.
Quick Review: As an IFoA student, your "Expert Power" grows with every exam you pass!
5. Referent Power
This is based on your personality and relationships. If people like you, respect you, and identify with you, they are more likely to be influenced by you. It’s often called "charisma."
Memory Aid: L-R-C-E-R (Little Robots Can Eat Rice)
Legitimate, Reward, Coercive, Expert, Referent.
Key Takeaway: Power Sources
Effective decision-makers don't just use one type of power. They balance Expert Power (what they know) with Referent Power (how they treat people) to build lasting influence.
Styles of Influence: Push and Pull
Once you know your power source, you need a style to deliver it. We generally categorize these into Push and Pull styles.
The "Push" Style
This is assertive and direct. You are "pushing" your ideas onto others.
• Logical Persuasion: Using facts, data, and rational arguments (Actuaries love this!).
• Stating Expectations: Clearly telling people what you need and what the consequences are.
Use this when: Time is short, the data is undeniable, or you have high formal authority.
The "Pull" Style
This is collaborative and subtle. You are "pulling" people toward your viewpoint.
• Bridging: Listening to others and finding common ground.
• Attracting: Creating a shared vision that gets people excited about the future.
Use this when: You need long-term commitment or when you don't have formal authority over the other person.
Did you know? Research shows that "Pull" styles are often more effective for complex business decisions because they reduce resistance and make people feel part of the process.
Assessing Your Own Influence: A Step-by-Step Approach
In the context of the CB3 curriculum, you need to be able to evaluate how much influence you actually have in a given situation. You can do this by following these steps:
Step 1: Identify the Stakeholders
Who are the people involved in the decision? Who has the final "say-so"?
Step 2: Analyze Your Power Base
Ask yourself: "Why should they listen to me?" Do I have the data (Expert)? Do I have the title (Legitimate)? Do they like me (Referent)?
Step 3: Evaluate the Relationship
Is there trust? Influence is much easier to exert if you have a history of being reliable and helpful.
Step 4: Choose Your Style
If you are talking to a CFO who only cares about the bottom line, use Logical Persuasion (Push). If you are trying to motivate a team of peers, use Bridging (Pull).
Common Challenges in Influencing Others
Don't worry if this seems tricky at first! Many students struggle with these common hurdles:
1. The "Expert Trap": Thinking that because your math is right, everyone will automatically agree with you. You must still explain the "why" and build relationships.
2. Lack of Confidence: If you don't believe in your recommendation, others won't either. Preparation is the key to confidence.
3. Misreading the Audience: Trying to use "Legitimate Power" on a senior manager (who actually has more authority than you) usually backfires.
Summary and Quick Review
1. Influence is a tool for decision-making: You need it to move from a "calculated answer" to an "implemented action."
2. Know your bases: Most actuaries lead with Expert Power, but Referent Power is what makes people want to follow you.
3. Adapt your style: Use Push (logic/assertion) for quick, data-driven needs and Pull (collaboration/vision) for long-term buy-in.
4. Context matters: Always assess the person you are trying to influence before choosing your approach.
Final Thought: As you progress in your career, your technical skills (Expert Power) will get you in the door, but your ability to influence others will determine how high you climb in the organization. Keep practicing these skills in your daily life—try "pulling" instead of "pushing" the next time you have a group project!