Philip Sadler CBE

Futurist, Author, Speaker

Futurist
Author
Speaker

How to win the power game

16/01/2011

Winning the power game
An extract from my book How to get seriously rich while failing in business published by the Souvenir Press

Once you have got your first top cat job you can make a start on a process which you can repeat with increasing finesse as you move on from company to company during your career. This is the vital one of getting absolute control of the enterprise and its resources, without which you won't be able to exploit your power to your maximum advantage.

Controlling the Board

Board arguments are most distasteful and should be avoided at all costs; your aim should be to have a compliant Board characterised by harmony and consensus.

Selecting the non-executives

The ideal profile for a non-executive director is as follows:

• Little or no business knowledge or experience. You don't want people who can challenge the way you are running the company.

• Needy–in other words people who depend on their directors' fees to maintain their lifestyles. Former Lloyds' names who have been hard hit are a good source.

• Pillars of rectitude. Look for people whose reputations are beyond reproach and who, because of their titles, honours, or membership of professional bodies will give the board as a whole an image of integrity.

• Well connected–people who can get you into the right clubs, introduce you into desirable social circles, and help with hosting VIP entertainment.

Those who meet the bill include retired naval officers, preferably Admirals, retired senior civil servants, (at least at Deputy Secretary level), members of the House of Lords (on the whole impoverished hereditary peers are likely to have better connections than life peers), and business school professors.

You will, however, need at least one leading businessman on your Board, on the understanding that you in turn will be invited to serve as a non-executive on his Board. If you then sit on each other's Remuneration Committee you will be able to put into practice that well-known fat cat philosophy "You scratch my back and I'll scratch yours."

Choosing your finance director

The finance director must be very bright and know his stuff; you will need him to carry through some very sophisticated deals. It is, however, vitally important that of all the executive directors, the finance director should be your cat’s paw. The ideal candidate should be a well-qualified, timid introvert with a heavy mortgage, three kids from his present marriage and two from his first marriage. You should pay him well above market rates and grant him generous stock options. He will be yours for life. Get him to keep changing the basis of the accounting system. As Robert Townshend pointed out in Up the Organisation, this is the best way to do a 'snow job' on the accounts.

The other executive directors

As for the other executive directors, you will be wise to select for mediocrity so that your own star will shine the more brightly.

Ideally one of them (preferably the Human Resource Director) should be a woman as evidence of your progressive approach.

Again, generous reward packages will help ensure their loyalty to you personally.

Remember – titles cost nothing.

From time to time you should fire one of the executive directors. It helps keep the others on their toes.

Given a compliant Board it is a good idea to get them to appoint you Chairman as well as Chief Executive. This done, reduce the frequency of Board meetings to once a quarter and set the quorum at two. Time the meetings for mid-morning, to be followed by a slap-up lunch.

Winning over the investment community

The aim here is to become known in the City as someone who is rising rapidly in the business world, a sound strategist, unequivocally committed to maximising shareholder value, and yet at the same time progressive and socially responsible.

• The first step is to appoint a PR Agency. Go for a small but highly creative boutique – one, which will really need your fees. Make it plain to them that their main task is to boost your personal image in the city.

• Employ corporate identity consultants to give your company a fresh image. Key themes are 'dynamic growth', 'market focus', globally competitive', 'world class' ‘environmentally friendly’ and 'high-tech.'

• Make speeches on every possible occasion in which you constantly stress that the job of the chief executive is to focus exclusively on creating total shareholder value. Build a reputation as a leading spokesperson for the free market.

• Spend freely on the company's Annual Report. Use a top design team. Ensure that the report carries several pictures of you in different contexts – with employees, with customers, involved in community affairs, etc. Use the report to set out a clear statement of strategic intent backed by statements of Vision, Mission and Values. (You can get the team at the PR Agency to draft these for you). Make sure it contains all the right messages about people ("Our greatest asset," etc.), and the environment.

Getting the auditors on your side

In every aspect of business life personal relationships count for a great deal. A prudent Chairman and Chief Executive will establish close relationships with the firm's auditors.

• Choose an audit firm in the middle size range one that will be glad of the fee income, but large enough to be beyond reproach.

• Get to know the senior partners well – include them in your top-level corporate entertainment programme – Wimbledon, Ascot, Henley, etc.

• Don't ignore the juniors who will actually carry out the work on site. Go out of your way to welcome them and invite them to the less prestigious or less popular company events – snooker tournaments, sponsored classical music concerts, etc.

• The Board's Audit Committee should ideally consist of yourself and two of your carefully selected non-executives.

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