RCA's Whirling Merry-Go-Round

By Christopher Byron

A corporate imbroglio of four chairmen in six years

Office politics is a way of life at most American companies, but few firms manage to make more of a spectacle of on-the-job intrigues than the RCA Corp. In the past six years, the diversified broadcasting and electronics giant (1980 sales: $8 billion) has stumbled from one management fiasco to the next. These included: the awkward ousting of the son of the company's founder from his job as chairman; the dumping of his successor for failing to file his income taxes; the dismissal of a company president after only six months on the job; the firing of a network chairman who publicly refused to quit.

Now the man who presided over much of the pandemonium, RCA Chairman Edgar Griffiths, 59, is himself leaving, effective July 1. The announcement of Griffiths' departure took place during another painfully familiar management and public relations muddle. Griffiths' successor will be Atlantic Richfield (Arco) President Thornton Bradshaw, 63, an outside director on RCA's board since 1972.

Under Griffiths, a tightfisted finance man with a devotion to the bottom line, RCA has been very prosperous. Revenues and earnings have more than tripled since 1975. Sideline businesses like the company's Banquet Foods subsidiary have been shucked off, along with the firm's Random House publishing arm. New and more sensible acquisitions, including C.I.T. Financial Corp., the $5 billion insurance and real estate investment firm, have also been made. At the same time, the company has revitalized its flagging television manufacturing business, and is now preparing for the launching in March of video disc recorders.

Yet to RCA's 15-member board of directors, Griffiths' accomplishments eventually counted for little when weighed against his shortcomings as a manager of people. Instead of grooming his successor, a task that any corporate head must unavoidably confront as retirement approaches, Griffiths permitted the matter to languish unresolved. The result was a power vacuum that was soon filled by cabals of jockeying, maneuvering subordinates. Lamented one source close to the firm last week: "If you put two people together at this company, you will have three factions."

The board itself had been split since last summer over what to do about a successor for Griffiths. His messy firing in June 1980 of his own heir apparent, Maurice Valente, who had been brought into the company only six months earlier from a top job at ITT, had angered several outside directors. Their dismay merely intensified when Jane Cahill Pfeiffer, chairman of NBC, RCA's network subsidiary, was let go in even clumsier fashion a few weeks later.

Meanwhile, Griffiths himself had begun to want out. Associates report that he resented being increasingly second-guessed and questioned in his decision making by the board. Relations were particularly poor between Griffiths and Board Member George Fuchs, RCA's executive vice president for industrial relations, who had coveted the job of chairman but lost out to Griffiths in 1976.

Though it was clear that a successor was desperately needed, the board had no hope of finding one from within the backbiting ranks of the company's top management. As an alternative, a committee of outside members, led by Donald Smiley, the recently retired head of Macy's, launched its own search. Says one member: "No insiders at the company were ever involved. They're the most highly politicized group you can imagine, and the infighting was absolutely terrible. If we brought any one of them in, we would have had to contend with all those factions."

By early January, according to one board member, the committee had settled on one of its own, Arco President Bradshaw, an urbane intellectual who had demonstrated organizational and management talent during his 16 years' tenure as chief operating officer of the energy company. In that period, Arco earnings rose from $40 million to $1.65 billion. Having been an RCA board member for the past nine years, Bradshaw was as familiar as anyone outside the firm could be with both the company's problems and potential. Moreover, he had also long since groomed his own successor at Arco, and thus could confidently take on the new assignment without risking an upheaval at his old company.

By the time Bradshaw agreed to take the job, however, rumors of Griffiths' impending resignation were already leaking in torrents from disgruntled insiders at RCA. That wrecked any hope that the top personnel change could be made without another barrage of bad publicity. Though RCA had prepared a four-page press release that was to be issued following last Monday's regularly scheduled meeting of Arco's board of directors in Los Angeles, the company had to put out a statement two days early that Griffiths was being replaced by Bradshaw.

Bradshaw is not yet saying anything about his plans for RCA, but one subject is almost certain to have his attention immediately: what to do about NBC President Fred Silverman, the programming hot-shot who pushed ABC to the top of television ratings in the mid-1970s and was hired in 1978 to do the same for NBC. Silverman has brought about a personnel upheaval at the network, and, although NBC has recently picked up in the ratings game, it still trails far behind leading CBS. Rumors have been swirling for months that Silverman would soon be fired, or perhaps just quit.

Without Griffiths to protect him, he is regarded by network executives as now more vulnerable than ever before. If so, it seems that at least one more victim may be added to the RCA casualty list. --By Christopher Byron. Reported by Mary Cronin/New York

With reporting by Mary Cronin/New York

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