The Psychology of Power | Michael Ovitz

KEYPOINTS

• 01

  Knowledge is power — and the pressure to always have an answer turns people into liars.

  When Michael Ovitz started CAA in 1974, lying was an 'industrial problem' in entertainment because agents felt they had to answer everything and made things up more than half the time. CAA's rule was 'simpleton logic': if you don't know, say you'll find out. He found it shockingly revolutionary, and notes the same reflex exists in most organisations.

• 02

  Teamwork with no ego meant CAA never lost a client.

  For 75 years agencies ran one client, one agent. CAA gave every client multiple agents, all current on the career, so clients who tired of one person simply moved to the next. Staff had to answer colleagues before clients or buyers. The clients were in the ego business, not the agents — a big reason CAA attracted most working talent.

• 03

  Tell clients the truth, and only pitch what you believe in.

  Agents traditionally told actors they looked great in bad dailies. CAA banned recommending material you didn't believe in. Ovitz held Friday open-door sessions where agents had about two minutes to sell him a script; he applies the same test to tech founders — if you can't say what the business does in 20 seconds, you can't market it.

• 04

  The first way people go wrong is believing things that aren't true about themselves.

  Believing your press, good or bad, or that you're superior is the common failure across industries. Paul Newman told Ovitz he didn't believe the praise, 'but after a certain amount of time, it starts to get to you.' Ovitz dismissed power lists as nonsense: power is ephemeral, 'like a lease' with a closed end, never a good one.

• 05

  Build breadth deliberately so you can connect with anyone.

  Hollywood was a closed ecosystem of gossip, so Ovitz flew to New York weekly for art, theatre and intellectual circles. CAA kept a 200-line bibliography of magazines and books; he took 200+ magazines a month, thumbing 10–15 daily. Car magazines let him bond instantly with Paul Newman; reading the New England Journal of Medicine let him talk to UCLA's 20 department heads.

• 06

  Don't fight your job: if you dread going to work, you won't stand out.

  The most common calls he gets are complaints about a colleague, a deal gone wrong, then disliking the job. Work you love lets you perform to capacity; otherwise run a 'pilot's checklist' on why you're unhappy or find another job. At his age he can't wait to get up every morning.

• 07

  Failure is a badge of honour in American business, and that's its edge.

  At a London lunch on why American businesspeople outperform, a man in his 40s said he was leaving London in shame after his company went bankrupt and he fired some 800 people. Ovitz ended the lunch — that was the answer. The man cancelled his move and started another business. Michael Crichton's advice: 'There's always another rodeo.'

• 08

  Study failures, not successes.

  Patrick Collison invited Ovitz to lunch with his book full of Post-its marking every mistake, then spent three hours asking the conditions behind each decision, what Ovitz might have done differently and what would have happened. Ovitz calls that not just smart but wise, and says this tech generation wants to know what you failed at, not what you did.

• 09

  Momentum is the most underused force in life, and it's built like a train leaving a station.

  It doesn't happen instantly; you lay foundations block by block, and you can't quit while building it. Michael Bloomberg as mayor took time to get up to speed but never stopped. Momentum comes from industrious work, deep knowledge of your field and its peripheries, and knowing your competitors.

• 10

  Loyalty and confrontation are both tools.

  Ovitz calls himself 'the world's best friend and the world's worst enemy.' Confrontation is just a tool; sometimes necessary. He's a self-described monopolist in Thiel's mould — CAA held about 70% of the market — and didn't go into business to win a popularity contest.