The business performance of CEO Mitt Romney has become a central issue in the presidential campaign, as the Republican candidate tries to leverage his achievements as head of Bain Capital and the Winter Olympics into a narrative of leadership success that would make him just the right president for these difficult economic times. Meanwhile, incumbent Democratic President Barack Obama paints Romney as a heartless, marauding, outsourcing tool of the worst kind of capitalism.
Beyond the highest office in the land, the 2012 elections represent the third consecutive two-year cycle in which legions of candidates for top-level offices have been active or recent corporate chieftains or owners of private businesses ranging from mom-and-pops to substantially sized concerns. If ever there was a time when the experience and competencies of a CEO made any of these candidates fit to take over one of these jobs, their argument goes, it is now—following an era of economic doldrums, expensive expansion of government and fiscal mismanagement.
“I was bred for this kind of leadership, where you have to surround yourself with good people, examine all sides of an issue and never worry about being popular or someone’s best friend,” says David Spence, a Republican candidate for governor of Missouri who has made his business success his central qualification. Over more than a quarter-century, he built up a company called Alpha Packaging from about 15 employees and $350,000 in annual sales to a $200 million enterprise with more than 800 employees before he stepped down last year to run for the office. He is joined by many other CEOs or ex-business chiefs across the country. (See sidebar, “Who’s Running and Why,” p. 44.)
“[Business leaders are] appealing types of candidates in the current environment, just like they were in 2010 and 2008,” says Matt Mackowiak, head of Potomac Strategy Group, in Washington, D.C., and the campaign manager two years ago for Bill Flores, a Texas Republican and former energy-exploration company CEO who beat a long-time Democratic incumbent largely on the basis of his business credentials. “They have tangible experience, and people generally respect business owners. They can tap into the economic issues with credibility and firsthand knowledge. And they generally understand budgeting—and at this time of record federal deficits, people want leaders to know how to get control of the budget.”
But with so many in the cycle once again, there’s a substantial counter-argument about how appealing they are. “What’s more important than business acumen is whether a candidate articulates a policy or an approach that strikes people as right and can actually bring solutions to the economy,” maintains Karen Tramontano, a Democrat and CEO of Blue Star Strategies, a Washington, D.C.-based political-consulting firm. “I don’t think if someone says they ran a business, people say that he or she will be better than someone who didn’t. If that were true, you would have had a different result in California last time.”
True, the cases of Carly Fiorina and Meg Whitman would seem to undermine the argument. The former CEO of H-P and former chief of eBay, respectively, ran strong races for the U.S. Senate and governor in California two years ago. But each ultimately fell short, unable to overcome the huge Democratic legacy of California politics—even at a time when the liberal policies of the previous 50 years were building public debt and chasing businesses and jobs out of the state.
Tramontano’s case will be stronger if Bill Maloney isn’t elected the governor of West Virginia on November 6. His resume resounds with executive achievement: Maloney’s company, North American Drillers, helped come up with the technology that delivered the Chilean miners from the bowels of the earth in 2010. The company employed 150 people when he sold it six years ago and it had annual revenues of more than $25 million.
West Virginia is a mess. The state’s bedrock natural resource is being assailed not only by the Obama administration’s “war on coal” over carbon-dioxide emissions but also in the marketplace, by increasingly competitive natural gas supplies. Meanwhile, the state recently ranked 45th overall in private-sector job creation by a new Arizona State University report.
So Maloney has campaigned robustly on his credentials as an enterprise builder and job creator. He wants to roll back the state’s onerous and regressive equipment taxes, eliminate bureaucratic corruption and overhaul the state’s court system. “Businesses have a hard time investing in the state knowing [that] they don’t have a fair shake,” says the 53-year-old. Meanwhile, Maloney’s opponent, incumbent Democratic Governor Earl Ray Tomblin, has “nothing but a government background,” as Maloney put it, and “has never had to sweat it out and meet a payroll.”
Lisa Wilson-Foley focuses on her executive credentials as a Connecticut nursing-care entrepreneur heading into an August primary against a handful of foes for the Republican nomination. In one of her campaign ads, Wilson-Foley said, “I do know about creating jobs, overcoming all of the onerous regulations that our government has put on top of small businesses. I do know how to make a payroll and pay down my debt. That kind of attitude is what makes our country so great and something I want to take to Washington.”
But her role as a company chief also made her vulnerable to attack. In a debate of GOP candidates for the seat in July, for example, a rival scored her as a “profiteer” because of the high cost of Medicaid reimbursements to nursing providers and due to her murky arm’s-length relationship with one of the companies, which is run by her husband. Wilson-Foley was knocked out of the running in the primary.
Of course, the presidential campaign provides the biggest stage in history for a candidate and a campaign that is waged on the issue of CEO competence and integrity. Arguably, in Romney’s run, the CEO face of a significant candidate has been a larger factor in this race than any in presidential history. As he got into the clear for the GOP nomination, Romney made his Bain experience a centerpiece of his campaign, noting how, during his tenure, the company had created tens of thousands of jobs by rescuing companies such as Staples and American Steel and turning them into thriving entities once again.
Obama tried to turn that narrative on its head, focusing on jobs that Romney had to eliminate to make sick companies healthy again and pressing a case—even after it was refuted by the likes of the Washington Post—that Bain was a huge outsourcer of U.S. jobs overseas and that Romney actually was operating the company when much of that activity took place in the ’90s, even though he had resigned his operating role. Or, as Wall Street Journal columnist Holman Jenkins put it, Obama’s “calculated aim [was] to portray a respected business leader as a criminal.”
But ultimately, all aspects of Romney’s performance as a CEO are expected to take a back seat to even more basic considerations, such as “likeability.” To the puzzlement of some pundits, Obama has maintained a big lead over the former corporate chief in that department. Part of the reason is that, for Romney like many CEOs, relatabilty isn’t his biggest strength.
“In a bad economy, Romney has a smart message,” says Ron Gunzburger, publisher of Politics1.com and a long-time national pundit. “But at the end of the day, no matter how good or bad his track record as a jobs creator or profit maker, voters want to have some confidence in you and to like you; and until they can relate to him, that seems to be his biggest gap.”