Draft Fred for President? Don’t Bother

Recently I was asked to appear on David Asman’s Nightly Business Scorecard on the newly launched Fox Business News channel. [...]

January 8 2008 by JP Donlon


Recently I was asked to appear on David Asman’s Nightly Business Scorecard on the newly launched Fox Business News channel. (Since the fledgling business network is barely three months old and is not always offered by local cable/satellite providers you may not be aware of it.) 

The subject under discussion was whether CEOs make credible political leaders. Asman’s hook was that New York Mayor Mike Bloomberg was expected to announce his candidacy for President as an independent. We’re still waiting. The idea is tantalizing. Why wouldn’t a CEO make a good President?  Why don’t more CEOs try for the job? Doesn’t their leadership and organizational skills make them a natural? Given that business and commerce are so central to American daily life why aren’t more Presidents culled from the ranks of the nation’s business class?  

Steve Forbes, CEO of Forbes and a former two-time Presidential hopeful was the opening panelist. Steve currently acts as a senior adviser for Rudy Giuliani’s campaign, and judging from Rudy’s poor showing in the recent Iowa caucuses he can use all the help it can get. Other panel members were David Weidener of CBS Marketwatch and Judith Glaser who runs Benchmark Communications, her own coaching/consulting firm. I was asked as a result of an October 2006 article Chief Executive ran about CEOs who trade the corner office for office-seeking.  Our research, though not scientific, did canvas most of the hopefuls of the past 20 years, and found that at best the record is mixed. 

For every Mitt Romney, a former investment banker who once ran Bain Capital and the 2002 Winter Olympics in Salt Lake City, there’s a Herman Cain, the former CEO of Godfather’s Pizza who lost his 2004 bid to win a primary for the U.S. Senate from Georgia. Mike Bloomberg, a Democrat turned Republican cum independent is a bit of an anomaly. In nearby Greenwich, CT Ned Lamont, CEO of Lamont Digital Systems, won a race for selectman eight years before beating incumbent Sen. Joseph Lieberman in a bitter Democratic primary fight only to be soundly beaten by Lieberman’s independent bid the following November. 

Interestingly we found only one Fortune 500 CEO who made a second career as a politician. Amo Houghton, CEO of Corning (1964-1983) who first won election to the House in 1987 and continues to serve. All the others who have made the transition have been founder-entrepreneurs including former Minnesota Senator Rudy Boschwitz, founder of Plywood Minnesota (now Home Valu), California congressman Darrell Issa, R. Cal. (founder of Directed Electronics), Wisconsin Senator Herb Kohl (founder Kohl’s Grocery), and NJ Sen. Frank Lautenberg (co-founder of ADP) 

If one goes further back in time the record seems even more muddled. Harry Truman was a failed haberdasher but someone who didn’t flinch from Stalin’s threats. Jimmy Carter, on the hand, came to Washington as Mr. Efficient Outsider, but proved a disaster when he allowed a combined 20 percent inflation and interest rates not to mention oil shortages to implode his presidency. 

Prior to the show Asman’s producers pumped me for information asking who was the most spectacular flop as a business leader turned politician. I replied that Herbert Hoover, a mining engineer who worked in China, Australia and South Africa, and is best known today by the President who soundly defeated him in 1933–Franklin Roosevelt–would likely fit the bill. 

Interestingly, host Asman drew attention to Hoover towards the close of our panel discussion. 

But I cautioned the young producer that there is another side to Hoover’s record (I was able to squeeze a bit this in during my final comments.)

Hoover was asked by president Woodrow Wilson to organize disaster relief for Belgium in 1915 after it was devastated by the predations of the German invasion of WWI.  Also, in 1921 Hoover organized private food relief for Russians starving as a result of its continuing civil war. (In fact he was criticized for “feeding Bolsheviks” at the time. Historians say he saved 20 million lives. Hoover replied to his critics that even Russians didn’t deserve a starvation death. In the Harding administration Hoover was arguably the best US Secretary of Commerce that office has ever had.  

Steve Forbes pointed out that Hoover‘s big mistake as President was signing the Smoot-Hawley Tariff which jacked up trade tariffs and was met with countervailing tariffs by all our trading partners. Steve is right. The knock-on effects of Smoot-Hawley only deepened what could have been a hard but limited term recession into a world-wide Depression. An international businessman should have known better. 

Off the set Steve Forbes asked me which CEO I thought would make a good President. (We both agreed that folks like Jack Welch, Hank Greenberg and Lee Iaccoca who were often touted as Presidential timber would have been terrible choices for reasons Ms Glaser touched upon during the show. Such figures are temperamentally unsuited accustomed as they are to having their executive decisions immediately obeyed without question and having control of outcomes. In politics decisions are subject to negotiation and outcomes are always in doubt. Can’t see a Welch, Iacocca or a Greenberg sitting still while lesser mortals take issue with one of their edicts. 

Having given it some thought I replied that the best CEO candidate would be someone who would likely refuse the nomination if it were offered, someone like our 2004 Chief Executive of the Year Fred Smith of FedEx. Why? Fred built FedEx from nothing. It was an idea most people thought at the time wouldn’t work. Also, it almost didn’t succeed. Fred faced a period when the company barely made its payroll thus giving him a first hand knowledge of the fragility of business and job creation–something every politician claims to care about but doesn’t have a clue. Also, Fred is a very down-to-earth guy with grounded principles.  Success has not changed him or his values. The problem with most CEO types who go to Washington is that they become captured by the Washington establishment and their sectarian interests. Unlike Jimmy Stewart’s Jefferson Smith character in the classic film “Mr. Smith Goes to Washington,” most CEOs have already bargained with corrupting Senators like the Joseph Harrison Paine character played so well by Claude Rains. They are not naïve Mr. Smiths. They realize that nothing gets done without playing the game under house rules.  

The real qualifier for Fred Smith type of CEO is what I call the Groucho Marx Principle: He is disinclined to join any club that would want to have him as a member! The right person for the job is someone who is not really keen to have it in the first place, but just might be willing to do so if enough people urged. (I doubt if Fred would be persuaded.) 

Of course, I could be all wrong about this. Maybe there is some terrific CEO out there who would make a dandy President if only we could learn who she is. In 2006,  BBC One television created an amusing mini series, aired in the US on PBS in 2007, “The Amazing Mrs Pritchard” written by Sally Wainwright and starring Jane Horrocks in the title role of a woman with no previous political experience who becomes Prime Minister of the United Kingdom.  The story revolves around a supermarket manager, Ros Pritchard, who, angry with the state of British politics, stands for election as an independent candidate in her home town in Yorkshire. She soon gains national attention and wins the general election, becoming Prime Minister. Over successive episodes, Ros’s spontaneous approach to decision making and her promise never to deceive the electorate come under increasing pressure from the demands of government, media scrutiny, and partisan political struggles. One of Pritchard’s controversial decisions as PM was to move all the functions of central government from London to Bradford, the geographic center of the country, something like moving our government from Washington, D.C. to Topeka, Kansas.

Now what if life imitated art?