It's November of 1975 . . . and you've recently returned from a business trip to the Mideast. You're 57, and you've got it made. As one of America's most influential business leaders, you head a nearly $5 billion company with more than 100,000 employes. When you press buttoms, everybody jumps. You earn close to $400,000 a year, you have a limousine and plane at your immediate disposal, your expense account is unlimited . . . and you posses something just about everybody hungers for: power. It's a dream job.
But suddenly that dream becomes a nightmare. There's a palace revolt and you're out. And although your dad (an acknowledged business giant) may have made the company what it was, the board wants no part of his son.
Now, a little over four years later, I asked a graying Robert Sarnoff, who ruled RCA Corp. for a decade before this ouster: What's it like when the phone doesn't ring anymore . . . when power is gone and you become practically a non-entity?
In a carefully contemplated response in his first corporate interview since the coup, a soft-spoken, immaculately dressed Sarnoff replied: "I never thought of it as power, and I didn't aspire to it. Remember, I was brought up with it. The attraction at RCA wasn't power, but the opportunity to develop and create new ventures (like building satellite communications and acquiring Hertz). And I understood -- a lot of people at the top don't -- that whatever perks go with the job, including power, are attributable to the job, not to the individual. So I haven't turned bitter or cynical . . ."
Last July Sarnoff Became chairman of Planning Research Corp., a Washington-based professional services company. He said his most difficult adjustment was the loss of a large staff and immediate response when he wanted something done. "I had a lot of buttons, but now I have to rely more on my own initiative to get things done," he said. "It's like using muscles you haven't used in a long time."
His new affiliation, Planning Research, intrigued me. A one-time high-flier on the Big Board, its stock shot up to the 50s in those euphoric stock market years when its growth accelerated rapidly through an acquisition binge. Later, though, it collapsed (it's now around 8) in the face of numerous acquisitions that turned sour, a recession and huge write-offs on a computerized hotel reservation system (since scrapped).
Essentially a series of think tanks, the company services government, business and industry primarily in computer information systems, management consulting, economic analysis, engineering and architecture. It has done work for Disneyland and Disney World, for example, and it's also involved in defense (such as in the space shuttle program) and in solar energy.
The best-performing money management firm in the country, Quantum Fund (formerly Soros Fund), apparently thinks PRC is doing something right. It has acquired nearly 532,000 shares (or about 8.1 percent) of the company's stock. Quantum, a big player in defense stocks, thinks PRC will be an important beneficiary of increased government research and development outlays in the defense sector.
Reflecting write-offs on Iranian investments, the disposition of two disappointing businesses and poor results in its publishing operations in real estate, PRC's profits (on sales of nearly $262 million) were flat last year; the company earned 72 cents a share, the same as it did in 1978.
But Sarnoff, who owns 35,000 shares of PRC and is paid $125,000 a year by the company, doesn't see a repeat performance in 1980. He expects higher sales and profits this year and, in fact, he sees PRC's overall earnings rising at least 50 percent over the next three years. And he expects volume to more than double in the same period.
Sarnoff says the company is evolving from the entrepreneurial-type approach of the past into a centralized corporate structure. "We're in the transitional stage, deciding which are the most profitable growth areas of the business we want to focus on . . . but we expect to move on and upward during this period," he told me.
I heard Sarnoff still owns a fair-sized chunk of RCA's stock, and I couldn't help but wonder how he views the company as an outsider.
Although reluctant to talk about RCA -- as part of his termination, he receives $75,000 a year for 10 years as a consultant -- Sarnoff nevertheless told me: "I have trouble knowing just what RCA is today. The high-technology gloss is gone, although the technology is still there. The image is blurred."
Said Sarnoff (frequently puffing on a cigar before he spoke): "You have to articulate a mission. . . . to explain what you want a company to be, what you want it to achieve. When I look at RCA, I see broadcasting, rent-a-cars, electronics, consumer products and finance. I'm confused. What does it all mean?"
But what about the acquisitions Sarnoff made at RCA (such as food, carpeting and rent-a-cars); wasn't that confusing? I asked him.
"Wall Street didn't understand it because an electronics analyst couldn't relate to food or carpets," he responded. "But I don't believe I changed the image of the company. The purpose was to diversify toward service and have less dependence on manufacturing, and that's what was accomplished . . ."
Sarnoff never said it, but he didn't have to: His comments are a direct slap in the face of current RCA chief Edgar Griffiths.
I asked Sarnoff, who is also a director of the New York Stock Exchange, if he misses the phone calls.
"When you run a big company, the phone rings too much," he said. "There's a certain relief that it doesn't ring that often."