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Do CEOs Make Good Politicians?

This year’s race for governor of Michigan should have been tailor- made for Richard DeVos, the former CEO of Amway Corp., one of the state’s biggest employers. After all, in Jennifer Granholm he faced an incumbent who had presided over a rise in Michigan‘s unemployment rate to 7.2 percent, by far the nation’s worst.But in …

This year’s race for governor of Michigan should have been tailor- made for Richard DeVos, the former CEO of Amway Corp., one of the state’s biggest employers. After all, in Jennifer Granholm he faced an incumbent who had presided over a rise in Michigan‘s unemployment rate to 7.2 percent, by far the nation’s worst.

But in an early-October televised debate, Granholm was able to score points against the erstwhile corporate chieftain by pointing out that DeVos as CEO actually had created thousands of low-paying jobs in China- while trimming jobs in Michigan.

Still, Michigan‘s pocketbook pain gave DeVos his chance to unseat Granholm. And in general, when CEOs become political candidates they tend to campaign naturally on their grasp of economic and financial issues.

Jack Davis brought his business expertise to bear in his campaigns for the House in New York State‘s 26th District, where the founder and owner of the I Squared R Element Co. lost as a Republican in 2004 and ran as a Democrat this year, largely on a trade-protectionist platform.

He also was plying his executive competence. “I know how to control budgets and get people to do what they need to do,” Davis said. “As a chief executive, I’ve been selling myself for years.” But typically, a CEO or former CEO still must offer something else as a candidate besides a managerial air and a strong corporate track record. Ideally, they should be able to deal comfortably with a variety of constituencies, ranging from clergy members to environmentalists. And they need to be able to engage confidently in cultural discourse, over issues such as abortion and immigration, as well as in money- speak.

“If your only experience was running a company as CEO, you’ll find a rude awakening-because you won’t have the life experiences to be a credible candidate,” said Steve Grossman, CEO of his own marketing company, who ran unsuccessfully for governor of Massachusetts in 2002 and served as chairman of the National Democratic Party under President Bill Clinton.

When CEOs win a race, however, then a different dynamic begins to apply: Governing is more like pushing a rope than cracking a whip. “Once you get in office, you have to start to build consensus, and CEOs get startled,” Judith Glaser, executive coach and author of The DNA of Leadership, says.

“Many CEOs end up in cabinet posts such as commerce secretary instead of running for office. Still others began in politics, then ended up at a corporate helm,” Glaser continues. “Some have done both, such as Defense Secretary Donald Rumsfeld, an Illinoisan who served four terms in the House, ending in 1969, and in 1977 became CEO of G.D. Searle.”

But while CEOs quickly find out that “politics is a world unlike any other,” they also “usually have a record of keeping their constituents happy because they know something about customer relations and communications,” said Steve Katz, an advisor and counsel to four U.S. senators and one House member, and now a business consultant.

While they tend to push common levers with voters, however, CEOs’ motivations for running for office are more diverse. Some simply relish the challenge of proving their leadership acumen in a completely different venue. Others, having made their mark in the business world and satisfied their life’s ego needs, genuinely want to give back. Of course, such altruism is easier to express when you’re one of the handfuls of billionaire CEOs who has run for office, including New York City Mayor Michael Bloomberg, Forbes magazine scion Steve Forbes Jr. and H. Ross Perot, the computer entrepreneur and maverick presidential candidate in 1992.

Nevertheless, Amo Houghton still wonders why he’s the only former CEO of a Fortune 500 company ever to be elected to the House. “That’s one of the great sadness of the system,” said the ex-chief of Corning. Houghton is glad he ran. “I liked the people and the issues,” he said. “But there was some dirty stuff that went on-just like business.”

10 WHO TRADED OFFICES FOR OFFICE-SEEKING

 Name

 

Rudy Boschwitz

 

Michael  Bloomberg

 

Herman Cain

 

Jon Corzine

 

Richard DeVos

 Age 76 64 60 69 50
Undergraduate Degree NYU School of
Commerce, at 19
Johns Hopkins Purdue Illinois Northwood
CEO of Home Valu (nee
Plywood Minnesota),
Minneapolis,
1963-1978
Bloomberg LP,
New York, 1981-2001
 Godfathers Pizza,
Omaha, 1986-1996
 Goldman Sachs,
New York, 1994-1999
 Northwood
Alticor (nee Amway),
Grand Rapids, Mich.,
1993-2002
Party Republican Republican Republican Democrat Republican
Political track record Elected in 1978 and
1984 to U.S. Senate
from Minnesota.
Elected mayor of
New York in the first
post-9/11 election and
re-elected in 2005 by
biggest margin ever
for a Republican.
Lost in 2004
Republican primary
for U.S. senate from
Georgia.
 Won race for U.S. senator from New Jersey
in 2000, then won for governor of New Jersey
in 2005 and stepped down from the Senate.
 Ran for governor
of Michigan this
year.
Learned fromMargaret Thatcher. “I
like people who understand
what they’re for
and stick with it.”
Rudy Giuliani, his
predecessor, that
moderation in all things
is the key to governing
Gotham.
Lincoln. “He wasn’t a
career politician when
he got into politics.
And he lost a lot before
he got elected.”
 Putsch at Goldman
Sachs, which forced
him out in 1999: that
politics wasn’t any
riskier than business.
Bill Clinton: “It’s
the economy,
stupid”-especially
in recession-torn
Michigan.
StakesLess than $50,000 in his
own campaign. “But I
didn’t mind the moneyraising
part of it.”
More than $73 million
of his own money, yet
he’s still the 34th-richest
American, according
to Forbes. And, for
Bloomberg employees,
concern for whether
the distracted mayor
decides to sell his
company.
An investment of more
than $1 million of his
own money in his campaign;
loss as an
African-American shining
star was blow to
GOP.
 Massive: His personal
spending of $62.8 million
on his Senate
campaign was the
most in history, including
more than $35 million
on the primary
alone.
Spent more than
$10 million to
finance early TV-ad
campaign alone.
Chatter

 “Bob Dole liked to say
that, since I was born
abroad and couldn’t
run for president, I was
the only senator he
could trust.”

Despite his denials
about interest in 2008
presidential race, he or
associates apparently
bought up nearly all
the relevant domain
names, including
Bloomberg2008.com;
he did something similar
before the mayoral
campaign in 2000.
 Reform of tax code
and Social Security
tripped his trigger. “I
was sick and tired of
politicians lying to people
about the big
issues that we were
supposed to be working
on and telling them
everything was OK-
when it wasn’t OK.”
 May have taken to
heart the comment by
his ex-wife in 2005 that
he “let his family down,
and he’ll probably let
New Jersey down,
too”-an observation
that his opponent
actually used in a
campaign ad.
Endorsement by
Lee Iacocca-
former Chrysler
CEO, Statue of
Liberty revitalizer, of
presidential timbre-
provided a key-shot
of credibility.

Name

 

Steve Grossman

 

Amo Houghton

 

Ned Lamont

 

H. Ross Perot

 

Mitt Romney

 Age 60 80 52 76 59
 Undergraduate Degree Princeton Harvard Harvard U.S.Naval Academy Brigham Young University
 CEO of Grossman Marketing
Group, Somerville,
Mass., 1975-present
Corning,
Corning, New York,
1964-1983
Lamont Digital
Systems, Greenwich,
Conn., 1984-present
 EDS, Dallas,
1962-1986; and Perot
Systems, Plano, Texas,
1988-2000
 Bain Capital, Boston,
Mass., (co-founder
and managing partner,
1984-1999)
 Party Democrat Republican Democrat Independent Republican
 Political track record Lost in 2002
Democratic primary for
governor of
Massachusetts.
First won election to
House in 1987 and
served through this
year.
 Won race for selectman
of Greenwich, Conn.,
eight years ago before
beating incumbent
Sen. Joseph
Lieberman in
September primary for
U.S. senate from
Connecticut. Faces
Lieberman’s independent
bid in November.
Candidate for president
in 1992 who at one
early point led both
Clinton and Bush in the
polls, then ran again in
1996 against Clinton
and Dole and didn’t do
as well.
 Lost to Ted Kennedy in
1994 race for U.S. senator
from Mass., by
Kennedy’s slimmest
victory margin ever;
won governorship in
2002 in part on strength
of business record and
as organizer of 2002
Winter Olympics in Salt
Lake City.
 Learned from Co-running the losing
1988 presidential
campaign of Michael
Dukakis.
 John Chaffee, moderate
Republican and
late U.S. senator from
Rhode Island.
 Legacy of great grandfather
Thomas Lamont,
who was a partner in
J.P. Morgan; and his
wife, Ann Greenlee
Huntress, an aptly
named venture capitalist.
 His father, Gabriel
Ross Perot, a legendarily
sly cotton and
horse trader in parts
of Texas.
Dad George Romney,
former Michigan
governor and failed
presidential candidate.
 Stakes Spent more than $1 million on his run. He spent relative pocket
change on his campaign.
“Most of it you
get back from fundraisers
and contributors.”
 A big chunk of his personal
fortune of up to
$332 million.
 Losses in race for presidency represented
modern zenith of
American third-party
movement.
 Campaign spent more
than $7 million on his
race against Kennedy,
but his close loss
made him a national
political figure.
 Chatter “It’s difficult for a Democrat to run successfully in a primary because of
voters’ suspicions
that their values
and his values don’t line up.”
 “I didn’t run on any
particular principle.
Most men of principle
are damn fools.”
 MoveOn.org crowed
about their success
in “making” Lamont,
but they didn’t count
on Lieberman’s stubbornness.
 His memorable warning
that NAFTA’s adoption
would create a “giant
sucking sound” from
U.S. job losses to
Mexico has taken its
place as a Hall of Fame
presidential-campaign
sound bite.
Having announced he
won’t seek re-election
as governor, he’s sniffing
around possible
presidential bid in
2008; but his
Mormonism may be
an issue with the
Christian Right.

About dale buss

dale buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.