This paper examines potency, defined as the collective belief in a group that it can be effective, and its role in determining group effectiveness. The paper illustrates the construct and reviews its origins. The distinctiveness of potency from efficacy and from other collective and motivational constructs is described. The measurement of potency is also examined. The paper concludes with a presentation of a conceptual framework for understanding the determinants of potency and with a discussion of future theory, research and practice.