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The rules of power

Tue, 26th Jul 2011

Stanford's Professor Jeffrey Pfeffer has been studying and teaching power for three decades, and for many his conclusions on the subject make uncomfortable reading: the world is unjust, the leadership literature is a hopeless guide, and the biggest obstacle to achieving power is your own scruples. In conversation, he reflects on Murdoch, the failure of society to rein in imperial CEO power, and self help.

Simon Caulkin: How do you view the Murdoch drama from the power angle? You’ve said that power protects and perpetuates itself, but only up to a point...?

Jeff Pfeffer: What I would say is that there’s all this screaming and shouting and hollering, but you look six months from now and ask, where’s Rebekah Brooks or Rupert Murdoch, where’s David Cameron, where’s Andy Coulson... People get caught up in the theatrics and what they don’t ask is whether at the end of the day will Rupert Murdoch have lost very much, will Rebekah Brooks end up working at some other Murdoch property doing essentially the same job? There’s lots of wailing and gnashing of teeth, but will anything have changed very much?

And also, at some point in the electoral cycle politicians need money and press coverage, and Rupert Murdoch has a lot of both. He’s the non-political version of Berlusconi. Here’s the interesting thing: despite screaming and gnashing of teeth and apparently consorting with underage girls and charges of corruption, Berlusconi has been prime minister of Italy, one of the largest economies in the world, for a decade. And the basis of this is his media empire. And wealth. And, you know, wealth and power mostly win.

If you or I did what he does, we’d probably be in jail. It’s the same thing for Murdoch – the question is not whether he’ll suffer, which he will, a bit, and a few people will probably go to jail. The question is, will their power and wealth and influence – this is a counterfactual, so it’s a little hard to figure out – but will all this have immunised them in ways that it wouldn’t have for you and me? And part of this is, as with our ex-governor [Arnold Schwarzenegger], how they conduct themselves. People want to be associated with the winning side, so if he exhibits strength and persistence and resilience and confidence that this is a little tempest in a teacup but at the end of the day we’re the News Corp which is a powerful and successful global enterprise ...he’ll survive. I’m not worried about Rupert Murdoch. (Chuckles) I’m not worried about him at all.

SC: So for you power has no ethical component at all – it’s as it were an ethics-free zone?

JP: Yes. This is something that often upsets my students and readers too. For me, power is a tool, like a knife, and you can use a knife to do surgery and cure people, or you can use it to kill people. How you use it is up to you.

One of the things that irritates me, I have lots of colleagues who write leadership books, which firstly are mostly works of fiction, but secondly in them they became kind of lay preachers. A lot of the leadership books are lay preaching. What I say to my colleagues, and friends, is that I know what your training is in social science and how to run experiments and read the literature, but I don’t understand what training you have to be a moral philosopher. I think it’s very important for people to know what they know and what they don’t know, and I’m not going to portray myself as an expert in ethics and moral philosophy – there’s an academic discipline and literature and knowledge required for all that. What I do know is a lot of social science and a lot about power. So I’m going to tell you how the world works and it’s up to you to decide what you will do with that power.

SC: So the idea is that you’re flattening the playing field – saying ‘this is what you need to think about whatever your moral purpose’?

JP: Correct.

SC: Gary Hamel talks of living in an age when power has become extraordinarily concentrated and centralised in the hands of imperial CEOs, of whom Murdoch might be one. Do you see a dynamic in that? Does power want more power, for ever and ever?

JP: Of course. Of course. I completely agree. I would add to that that it’s been permitted by society. If I want to eat everything on the buffet table, and you know that, it becomes your job to stop me. Under the clucking of tongues, there’s a bunch of countries, including the US, that have abandoned any sense of trust enforcement, the idea that for markets to work there has to be competition. So, BA buys Iberia, Lufthansa buys Swiss, Austria and a bunch of others, Air France and KLM are part of the same organisation, United buys Continental, BP acquires Arco and I don’t know how many others... The financial institutions which at the time of 2008 were a problem because they were too big to fail are now for the most part bigger, in fact without exception bigger... and all this stuff has been permitted to occur. There are all these competition and anti-trust laws premised on the idea that economies work well, and markets work well, when there’s competition. Which is certainly true. And people have allowed this to happen – in oil, in financial services, in insurance, in autos, in media, there’s been this enormous consolidation of power. So yes, there’s this inexorable growth of companies and therefore the power of those who sit at the top of those organisations and control vast sums of resources. Gary’s absolutely right.

SC: And this is dangerous?

JP: Yes, of course.

SC: Is the drive to power part of human nature? Where does it come from?

JP: Well, the world is a hierarchical place. As I discuss in the book, there’s lots of evidence that people prefer hierarchy, particularly in tasks or task groups. Hierarchy is part of the natural order of things, whether people or fish or goats or human beings, so if there’s going to be a status hierarchy, and that hierarchy is associated with the distribution of rewards and goodies and benefits, as of course it is, then it’s only natural that people should prefer to be at top rather than bottom.

So if you look at this as a game – although I think it cheapens it a little – if you think of this as US football, or tennis, or soccer, you’d never say to players, you can play this game without rules or constraints. Every sport has rules and a referee to enforce them to ensure the game is played in a fair fashion. What differs in business is that referees have gone to sleep or left the field. So I don’t actually blame the players. If you’re watching American football and the referees leave the field and say, ‘guys, do whatever you want’, you can’t blame the players for trying to win however they can. It’s up to the people who make the rules and enforce them to not go to sleep. So for me, the problem in the UK is not Rupert Murdoch, it’s the government, for Christ’s sakes.

SC: So power needs rules to work like anything else. This makes it even more important than I’ve been thinking. So are you proposing new rules?

JP: No. Not at all. We need to be explicit. The book is written for people who need to understand what the game is, how it's played and what they need to do to be successful. I have a chapter towards the end of book ['Power Dynamics: Good for Organisations, Good for You?'] in which I say look, people say to me, and ask in classes, how does this affect organisations and organisational performance? And I say to my class on day one, companies aren’t worried about you, so you shouldn’t worry about them. You need to take care of yourself, and by the way, when you open up your eyes, then you do. So therefore this is not about making organisations more effective. My title for the book would have been something like ‘power, an organisational survival guide’. This about how to survive in the world we’re talking about, not a macro perspective on how rules should be changed. It’s about this is how the world works, this is what you need to understand it, here are some things that social science and interesting case studies illustrate work better rather than worse, and you need to figure this out.

SC: Ie, power as realpolitik. For instance in the book you show that talent and performance don’t necessarily guarantee you anything. It's not a just world. The other way round, you also say something like, ‘the only way to have the powerful be good is having more of the good become powerful...’

JP: As a friend pointed out, and this is right, I’m a child of the 1960s, and this is a kind of ‘power to the people’ book. This is what the rules really are, don’t believe the crap that people are telling you... I’m huge fan of Malcolm Gladwell’s 2009 New Yorker article in which he makes the point that the rules basically favour the people who are winning, because they make the rules! From war to basketball, David beats Goliath by not playing by Goliath’s rules.

*Power: Why Some People Have It – and Others Don't, Harper Collins, New York (2010)


 


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