In the post-Enron, post-Anderson, post-Merrill Lynch world, where is power? Who has it? Who wants it? I saw the old, rich, important, pathetic white men on the Enron board of directors testifying in front of one committee or another in Congress, and the question kept coming to mind: Is that what power looks like? Or public humiliation?
Gone are the days when power had a rich twentysomething face — or any personality at all. “There is less power in the world today than there was five years ago,” a friend tells me, “or less than we thought there was.” What makes that pronouncement shocking is that this particular friend is a VC who used to invest more money in big personalities than in big ideas. Now power is increasingly resident in the nodes, hidden in the networks. It’s not at the top, at the mythical “C level” in companies. It’s not at the bottom, lurking in the depths of mass movements. It’s somewhere in the middle of organizations, where the links come together. Back in a time of excellence, all that counted were the visible top and the rubber-meets-the-road bottom. The “average” middle-income consumer, middle managers, middlebrow tastes — these were an embarrassment. The 1990s were a Nietzschean orgy of belief that if you had to get somewhere, hit the heights and travel by treetop. Not anymore.
Power today means being connected: The most powerful individual is the person who has the most links to others. The player with the most corporate board seats wins. According to Linked: The New Science of Networks (Perseus Publishing, 2002) , a new book by Albert-László Barabási, a professor of physics at Notre Dame, the middle is where the action is, submerged deep in a spiderless web. “We have learned that a sparse network of a few powerful directors controls all major appointments in Fortune 1000 companies,” Barabási writes. “As links and connections take over, understanding network effects becomes the key to survival in a rapidly evolving new economy.”
So the most powerful man in America is not at the top of anything but instead the most linked, the stickiest. That person is Vernon Jordan, deal maker extraordinaire and Washington superlawyer. In 1998, he and his wife, Ann, sat on 17 boards combined. He currently sits on 10, including American Express, Dow Jones, Revlon, and Xerox, making him, says Barabási, “the most central director of the corporate elite.”
The more linked you are, the less you have to be anywhere in particular or do anything concrete. According to Time‘s Eric Pooley as quoted in Barabási’s book, Jordan “earns $1 million a year from a law practice that requires him to file no brief and visit no courtroom, because his billable hours tend to be logged in posh restaurants, on cellular phones … making a deft introduction here, nudging a legislative position there, ironing out an indelicate situation before it makes the papers.” Jordan’s directorships reportedly kick in at least another $500,000.
In Linked, Barabási has drawn a map not of the stars, but of the shadows: There are 10,100 directorships in Fortune 1000 companies. They are held by 7,682 directors. If each director were to serve on one board only, the network would be broken into tiny, self-contained circles. However, 14% of all directors serve on two boards and 7% on three or more boards. These few overlapping directors create a small-world network where each one is 4.6 degrees separated, or 4.6 handshakes away, from any other director. (Jordan holds the singular position of being only 3 handshakes away from anyone he needs to do his bidding.) Given the number of people who know Vernon Jordan, he should also be only 4.6 handshakes away from anyone trying to get to him. Vernon, I know you’re out there. I can hear you breathing.
Let the power games begin. The Washington, DC directory gives a listed number for Vernon Jordan, but it’s simply an answering machine at Bob Strauss’s law firm. I call the number. Many times. Nobody ever calls back.
My next try: Chuck Ames, a man with an impeccable reputation who sits on a number of boards and works as a partner at the storied leverage-buyout firm of Clayton, Dubilier & Rice.
I want Ames to tell me about the kind of person I’m looking for — the kind of person who wants to join the circle of shadowy board figures. Says Ames: “I’d be wary of anyone seeking a board position. Post-Enron, people are more reluctant to go on boards. It’s a serious responsibility. A good director does his homework, understands the financials and the business, and is careful not to rubber-stamp management decisions. I’m on five boards. I just got off of one, Kinko’s, where I was chairman. If it’s a good board, you learn a lot. If it’s a first-class board, you get a lot out of your fellow directors. I’ll be getting off of boards over the next few years, not because of Enron but because I’m of the age where I want to do other things. I don’t much care for members who serve on multiple boards. To each their own, but professional directors who think that a company is a good bet for the short term, I don’t like that.”
It sounds to me as if it would be easy for you to put me in touch with Vernon Jordan, I say. “I don’t know him,” Ames says. “He’s a good friend of Michael Jordan, the executive who used to be at CBS. He’s in New York someplace. I don’t have a number. I doubt Vernon would be willing to talk about it. Well, that’s enough said.”
Googling for Michael Jordan, executive, is like looking for a needle in the basketball star’s haystack. After a couple of hours, I finally find the Michael Jordan that I’m looking for. He’s now with venture firm Global Asset Capital, in San Francisco. And he doesn’t return phone calls.
Just like that, I’ve already used up 2 of my 4.6 handshakes.
So I pick up a new thread. I call an old friend, Gerry Roche, the premier executive recruiter for more than three decades at Heidrick & Struggles. No one has a sweeter handshake than Gerry, who has found scores of board-position candidates.
I ask Gerry to take the temperature of boards. Does he think they’re over? “No generality is worth a damn, including this one,” he says. “Boards still have power. Right now, I’m involved with the CEO search for Chubb, the best property- and casualty-insurance company out there, and the board of directors is running the whole thing. Boards are still boards. They realize that the old model of getting together the night before and having a nice dinner and then smoking a cigar and going into a rubber-stamp meeting is long gone. Boards know full well that they are under intense scrutiny these days.”
I’m desperately seeking Vernon, I tell him. Can you help? “Well, I don’t know,” he says. It’s clear that I’m a friend, but what I’ve just asked for is the combination to a vault that contains a secret beyond my security clearance. There’s a pause. He hedges: “There’s someone at American Express, a guy who’s close to Vernon. Call Aldo Papone, a former chairman — still a very important guy.” Bye-bye, handshake number 3.
Hello, number 4. Papone doesn’t return calls. I’m down to my last 0.6. I call Ann D. McLaughlin Korologos, former labor secretary, who is the ranking female board member, currently with seven board seats to her credit: American Airlines, Catalyst, the Fannie Mae Foundation, Kellogg, Marriott, Microsoft, and RAND Corp. And she doesn’t return calls either.
Which oddly confirms the theory that suddenly power is unseen, unheard, and unavailable — but ready to strike at a moment’s notice. Power is not leadership. When you stop to think about it, the circles may not even overlap. You could think of it like this: Leadership is having a lot of skin in the game. Power is working through others at a distance.
A former White House official told me that Vernon Jordan could have had any job that he wanted in either Clinton administration. But he chose none, because giving up his many board seats for a mind-blowing position alongside the president would not have been an even trade. All of the prestige, the spotlight, and the genuflection of leaders of the world’s great nations — what a comedown. Better to be a node of great distinction, tucked securely in the quiet middle of everything.
Vernon, I know you’re out there. If you’re reading this, call me. Secretly, of course.
Harriet Rubin (hrubin@fastcompany. com) is a Fast Company senior writer. Find a catalog of her columns on the Web, here.