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Company boards and power games

After being "helped" to step down as CEO of Uber, Travis Kalanick recently appointed two new board members in an attempt to maintain a tight control over the company - the battle for power and influence evolved to the next stage, the one of confrontation through proxies

By: EBR - Posted: Sunday, June 11, 2017

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For success in an increasingly populist and crisis-prone world, the distance between business and politics needs to be reduced at the conceptual level, as today’s business people understand too little about politics and this affects them sooner or later. So, I dare to say: CEOs and board members, be more open and learn from politics, starting with the basic laws of power.
For success in an increasingly populist and crisis-prone world, the distance between business and politics needs to be reduced at the conceptual level, as today’s business people understand too little about politics and this affects them sooner or later. So, I dare to say: CEOs and board members, be more open and learn from politics, starting with the basic laws of power.

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by Radu Magdin*
 
One of the things that marked Steve Jobs' career was the way in which he was removed from the leadership of the company he founded; after that bitter lesson, Jobs came back eventually and turned Apple into the global brand it is today. 

For those who are accustomed to making a clear separation between business and politics, these examples may seem uninteresting, counterintuitive or miracles. But they are about (raw) power, about the way in which business and politics are intertwined and come to define the activity of company boards. 
 
There are many things people in the business world can learn from political battles. The will for and desire of power - or the struggle to survive at the top - do not spare anyone. The global economic recovery has led many start-ups to seek an IPO or established businesses to look for expansion.

However, diversification and growth often reveal interests, strategies, and opinions that are not always compatible, to say the least. Stability and tranquillity in terms of business, as we well know, are the exception rather than the norm. 

With the shorter boom and bust cycles brought about by political and geopolitical risks and economic realignments, we will be in the position of seeing more and more public power struggles within company boards, with the whole range of tactics on display and all options on the table. Company boards will look more and more like national parliaments, hopefully with no fistfights attached. 
 
In this context, you may be surprised how useful someone with deep political knowledge and experience could be: political / power strategists are the new risk analysts, for boards' use and success. The following ideas and advice are an invitation to publicly start a conversation that otherwise takes place only informally and from time to time. 

One of the goals is to discard a pernicious myth: that the business world is about creating added-value, while the battle for power belongs only to the "dirty" world of politics. 
 
First, know how to choose your battles and see what is best kept on or under the public radar - you cannot be in continuous fighting mode, and you need to get things really clear and win "hearts and minds". Choosing battle momentum needs to take into consideration the big picture, beyond personal friendships and animosities in the Board. 

Always remember that internal struggles create external perceptions, and the latter are essential for the formation of winning coalitions when the stakes are high. The "political" stakes of the company boards have to be conceived with the general public in mind. 

The bigger a company, the more relevant it is for the world: communicating with the public in a way that is more than the usual CSR could prove very helpful in a time when politicians are looking for scapegoats to rekindle their relationship with the voters.  
 
Second, power play is only partly about money, because the one who has the right vision will eventually prevail if he or she can choose the right goals and follow the appropriate tactics. Focusing on the tactical game has benefits, can gain time, points and allies, but vision is responsible for 90% of success - power strategy is the needed 10% salt and pepper. 

Focus on vision going beyond engaging with typical stakeholders and stick to a good power plan; the opportunists cannot dodge the bullet forever, while it's better not to suffer setbacks just due to the fact that you think Macchiavelli is too much for you. You don't have to play political games in a board but you should be aware of them and always know how and when to play ball.  
 
Third, in terms of power, a CEO's task is really not that different from the one of a minister. He or she must seek to assume a different kind of relationship with the general public - storytelling is key and any successful communication attempt will have to contain three narratives: the story of self, the story of us, and the story of now. 

The time of decisions taken behind closed doors has passed and accountability should be as important in the business world as it is supposed to be in politics. CEOs are prone to encounter Game of Thrones episodes in their boardrooms, they should choose their House well, build allies and be ready for leaks from foes wanting to create mayhem or succeed to the company throne. Prepare now, before the famous winter is coming! 
 
Fourth, understand the drivers of politics, the place where business people usually fail because they treat political parties and voters as if they were their own companies or employees. Leading people in the absence of direct financial benefits is the greatest lesson to be learned from politics. The more you do it, the more you are a "politician", even if the term makes you cringe. 

In this context, this will translate into success for your business. This also means gathering diverse teams, representative for societal needs: it would certainly help to surround yourself with people who have different mind-sets and experiences than someone who has always been connected to the world of business. This would keep you on the toes and will help avoid the blind spots. It is no surprise that Bill Gates speaks so fondly of philosophers and those with a social science background. 
 
Fifth and final, a red team, always on alert, always extinguishing or preventing a fire, always challenging your assumptions and finding the weaknesses in the argument you are putting forward will transform you into a better CEO. And your Board into a better one: it's not by chance "war rooms" are a must in politics. 

For success in an increasingly populist and crisis-prone world, the distance between business and politics needs to be reduced at the conceptual level, as today's business people understand too little about politics and this affects them sooner or later. So, I dare to say: CEOs and board members, be more open and learn from politics, starting with the basic laws of power. 

* political and business strategist 

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