NOT many businesspeople study post-war French philosophy, but they could certainly learn from it. Michel Foucault, who died in 1984, argued that how you structure information is a source of power. A few of America’s most celebrated bosses, including Jeff Bezos and Warren Buffett, understand this implicitly, adroitly manipulating how outsiders see their firms. It is one of the most important but least understood skills in business.

Foucault was obsessed with taxonomies, or how humans split the world into arbitrary mental categories in order “to tame the wild profusion of existing things”. When we flip these around, “we apprehend in one great leap…the exotic charm of another system of thought”. Imagine, for example, a supermarket organised by products’ vintage. Lettuces, haddock, custard and the New York Times would be grouped in an aisle called “items produced yesterday”. Scotch, string, cans of dog food and the discounted Celine Dion DVDs would be in the “made in 2008” aisle.

Most industries have established taxonomies that hide their flaws. Wall Street firms disguise their risky proprietary-trading profits by lumping them together with the more stable fees paid by clients. India’s IT outsourcing giants split their sales into bland categories such as “solutions” and “application development”, which sound better than “work outsourced by American clients to our lowly paid staff in Mumbai and Bangalore”. Mining firms are organised by commodity type—copper, say, or iron ore. A geographic taxonomy would reveal that their production is often in unstable countries and that they rely on one big customer: China.

A few astute bosses know how to remould taxonomies, bending the perceptions of investors, counterparties and staff. A dazzling case is Mr Bezos at Amazon. In early 2015 investors were worrying that it was a low low-margin retail business and were losing their nerve. Mr Bezos changed its taxonomy by “breaking out” AWS, its cloud-hosting business, which was producing the holy grail of high, consistent and fast-growing cashflow. This move has been central to Amazon’s resurgent stock price.

The AWS technique is being adopted by younger, loss-making, tech firms that want to go public. Uber, for example, encourages outsiders to split it up by cities and vintage. In the places where it has brokered rides for longest its margins are positive, suggesting that it is just a matter of time before the entire firm makes money. WeWork, a trendy office-rental firm, revealed in April a new profit measure, “community-adjusted-Ebitda”. The label was moronic, but not the concept, meaning “the gross profits of offices that have been open for a while”. Like Uber, WeWork wants to show that it has a profitable core that can be scaled up.

Some firms have the opposite problem and need to show that, as well as being steady cash cows, they have new thrills up their sleeve. For instance, Google still relies on search ads for its profits. But in 2015 it changed its name to Alphabet, which became a holding firm split into two divisions, Google and “other bets”, which contains its new projects such as driverless cars. It hired Ruth Porat from Morgan Stanley to become its finance chief. The changes were meant to show that it has a serious framework for investing in new ventures. Investors have lapped it up.

Stodgy Western banks keen to prove they can do fintech would be well advised to study DBS, a Singaporean bank with a market value of $51bn. Piyush Gupta, its boss, wanted to showcase the digital initiatives taking place at the firm. DBS tagged each customer as “digital” or “traditional” based on whether they primarily used digital products or not, and allocated costs to both groups. The bank can now divide itself into two businesses and show that the digital one is more profitable and is a rising share of the total. The exercise helps explain a soaring share price.

The most accomplished corporate taxonomists play a still grander game; controlling not only how the firm is subdivided, but also whether it is viewed as a company at all. This is at the heart of Warren Buffett’s accomplishment at Berkshire Hathaway, which he insists is neither a conglomerate nor an investment vehicle, but a one-off that can only be analysed using a special set of rules that he has provided in an “owners’ manual”. This has shielded Berkshire from scrutiny and criticism over the past decade, even as it has underperformed the stockmarket.

Masayoshi Son, the boss of SoftBank, a Japanese telecoms and tech conglomerate, has just executed a similarly mind-bending classification leap. The firm has long been criticised for its weak cashflow and high debt, so starting in 2017 Mr Son began to describe it as a venture-capital (VC) operation, to be assessed using the VC measure of internal-rate-of-return, which is both flattering and unverifiable. He has since completed the shift by setting up the Vision Fund, a giant $100bn affiliated investment vehicle.

But it is Elon Musk who has taken recategorisation to its logical end point. Tesla, his car firm, he infers, cannot be judged in the present, but only the future, which he predicts using long-term production and market-value targets. So far it has worked. Even as Tesla has struggled to produce a modest volume of cars, Wall Street forecasts of its sales in 2023—a total guess—have been eerily stable at $60bn, supported only by the intensity of his vision.

Is it a bird? Is it a plane?

Taxonomies are not alchemy. If firms do not succeed, eventually there is nowhere to hide, as Tesla may discover. General Electric (GE) and IBM have tried to classify parts of their empires as especially “high tech”, but since overall profits have been falling investors are not fooled—indeed, GE has just lost its spot in the elite Dow Jones index. Nonetheless, by controlling how their firms are classified and subdivided, managers can often change perceptions, and in turn reality, lowering the cost of capital and intimidating competitors. Foucault had no interest in business. But if he had he might have split companies into two categories: those that understand the power of taxonomies and those that don’t.