Election Education

As we enter the high season of the quadrennial circus called the U.S. presidential election, and as I hear the positions and watch the behaviors of the major candidates, I am compelled to compare CEOs of countries with CEOs of companies. How are they similar? How do they differ? I begin by recognizing that while I was president of my own company (mergers and acquisitions), I could never be president of my own country. It’s not that I don’t feel able. I’d feel quite competent, actually (just like many of you who run your own companies and whose genetic structure embeds ego-enhancing codons). The problem is what one has to say, if not to believe, in order to become president.

So that’s a difference. Or is it? Unless a CEO founds her own company (or is related to the founder), then what she says while ascending the corporate ladder will influence her ultimate selection by the board of directors. Personal politics is largely the same in any organization, whether public sector, private sector, not-for-profit and, yes, even religious institutions. People jockey for position, promote themselves, undermine rivals, try to get ahead.

Where companies and countries differ are in their goals and objectives, which are relatively homogeneous in companies and heterogeneous in countries. In companies, generating highest profits or return with minimum risk is the goal, and the trade-off battles, which may be fierce, are generally confined within economic boundaries: projects competing for investments, long-term vs. short-term results, promoting this or that executive, buying or selling divisions, and the like.

In countries, the issues are diverse and can be divisive. Consider immigration, abortion, estate taxes, health care, free speech, religion in the public square-not to mention the Iraq War-where not only do opinions differ but there can be fundamental differences in belief systems that lead to hostility and rancor.

What can senior executives learn from the presidential campaigns? What lessons lurk? Try these. 

Align Strategies to Situations

Hillary Clinton assumed the nomination was hers by inevitable default (or by inalienable right). The message she sent was “Experience,” and the team she fielded was the Clinton establishment with its core of high rollers. Barack Obama envisioned “Change” and built an army of volunteers, mostly young, and leveraged the Internet. Experience and Change are, in the absence of context, equally valid strategies. But when the ratings of the sitting president are the lowest in history, when the majority of Americans believe that the “experience” of Chaney and Rumsfeld led to quagmire in Iraq, Change trumps Experience.

CEO Lesson: Don’t compare alternative strategies in the abstract. When evaluating strategies, consider under which conditions each would be optimal; then select based on current conditions. 

Assess Timing and Allow Serendipity

Obama began his campaign 30 percent or more behind Clinton; he couldn’t even muster a majority of African-Americans. Conventional wisdom said it was futile for him to run, that his time would come in future years. The unorthodox view was that timing was unique: the country wanted change, real change, and since who knows what the future holds, Obama should take a serious run now.

CEO Lesson: If there’s an opportunity that is unlikely to present itself again, even if the likelihood of its success is not high, consider going for it (as long as risks are bounded). Give serendipity a chance to work its magic. 

Don’t Give Up

You can’t win by quitting. John McCain, so far down in the campaign’s early days that he was carrying his own bag through airports, had to navigate the fine line between reaching out to the social conservative base of the Republican Party without alienating his appeal to independents.

CEO Lesson: In the world of M&A, it’s the rare deal that gets done without threat of collapse. Virtually all business opportunities, whether acquisitions or new projects, go through cycles of death and resurrection, before one or the other becomes final. Don’t expect otherwise. 

Don’t Overstay Your Welcome

Hillary, famously, didn’t quit even while almost all the pundits, and most of her friends, were advising her to bow out. Her motivation? Talking-head- land was awash with speculation. Some said she wanted to weaken Obama so that he’d lose, enabling her to run in 2012. Others, that her driving ego swamped all logic.

CEO Lesson: Don’t fall in love with projects or deals. Each is a means to an end, not an end in itself. (As an investment banker, I can keep on a deal long after it would seem inefficient to do so, and indeed most of the time, I’ve just squandered more time and money. But on rare occasions, I’ve made “impossible” deals pay off.)  

Reposition After Failure

Even though John McCain lost to George W. Bush in the heated presidential primary in 2000, he set about to support him, particularly in 2004. That put McCain in position to run after Bush (sooner if Bush had lost). Mitt Romney has now done the same. After a rancorous primary battle with McCain, he has become an outspoken and aggressive supporter (perhaps looking ahead to 2012 or 2016, perhaps positioning himself as a potential running mate, perhaps an administration appointment).

CEO Lesson: When evaluating senior executives for promotion, assess how each handles competitive failure, in terms of personal attitude, corporate commitment and relations with other executives.  

Handle Problems Rapidly

The more serious the problem, the faster it should be handled. When the Reverend Jeremiah Wright controversy broke, Obama gave his nuanced speech on race. When Wright continued his histrionics, Obama denounced him immediately. When The New York Times ran a front-page story suggesting an improper relationship between John McCain and a lobbyist, both McCain and his wife spoke out the same day. That lesson was learned from John Kerry’s hesitant response to the “Swift Boat” ads challenging his war record in Vietnam.

CEO Lesson: Corporate crises, such as product-safety issues, demand intense focus. Stonewalling usually makes it worse. Bad news drop by drop can compound and prolong the problem. Hiding facts, or worse, covering them up, tantalizes the media, stokes their flame. Lance the boil. Get it all out fast. 

Find Your Base

Hillary’s remarkable persistence in the race, winning key primaries after most thought she had no chance, was due to her appeal to blue-collar workers. The ultimate insider, she masterfully repositioned herself as a “fighter” for working families and seemed comfortable drinking beer with the boys. It worked for her because her opponent, Barack Obama, Ivy-league schooled, was perceived as an elitist (not to mention the undercurrent of racial bias).

CEO Lesson: Competitive analysis is key. You may think your company is weak with a certain customer class, butif your competition is weaker still, that class can be a comparative strength. 

Be Genuine

Whenever Hillary was herself-natural, open, personable, warm-not pompous, overzealous, strident, burdensome- she won (e.g., New Hampshire). McCain is best in town hall meetings. Obama did not do well bowling. (In 1988, when posing in a tank, George Dukakis looked comical.)

CEO Lesson: Your public posture is paramount; to no small degree the image of the company reflects the image of the CEO. Even internally, CEO image instills employee confidence and sustains morale. When visible, be natural. 

Don’t Exaggerate

One can exaggerate so often that one comes to believe one’s own bull. That’s what probably happened with Hillary’s dodging those imaginary bullets in Bosnia. Watching her tell her tales, you’d swear she believed it. Obama had to recant his claim that his uncle liberated the Auschwitz concentration camp in World War II. (The relative was his great uncle; the camp was an affiliate of Buchenwald; and the fine fellow didn’t do very much.)

CEO Lesson: Exaggeration is a common proclivity. Corporate leaders, because they’ve had success, are particularly vulnerable. In our Internet age, exaggeration travels at the speed of light. Bloggers love to expose it. Media loves to puncture the balloons of personal aggrandizement. Be vigilant. 

Never Assume Privacy

Privacy is dead. Confidentiality has lost its power. And the more prominent you are, the greater your chances of exposure. When Obama spoke “privately” to his San Francisco supporters about rural Americans “sticking to their guns and religion” because they are “bitter,” he had no thought of cameras. No thought? Every cell phone can be a camera!

CEO Lesson: Imagine that every statement you utter will be uploaded to YouTube, and every email you write published in The Wall Street Journal. Imagining what one might do as president is fun fantasy, muffling the surround sound of political posturing. But CEOs can not only imagine the best policies for their companies, but they can actually implement them. You have the power to institute real change, and you do not have to win elections to do so. To do it best, learn the lessons of campaigning.