CEOs Take Center Stage in the New Political Regime

Over the course of the past year, voices on both sides of the aisle, across editorial pages and in boardrooms have begun arguing that it’s time for America to rethink its politics. Even many CEOs are shedding their traditional reluctance to engage and, instead, are participating in such a realignment.

Donald Trump’s election as president has yanked the Republican Party into unfamiliar philosophical and policy territory, and the Democrats’ losses have left them in profound disarray. One result is that growing elements are trying to force everyone back toward the center of the American political spectrum where they believe the future of the parties—and the nation—must be constructed.

“I’m tired of it all because it has become so strident,” says Larry Jensen, president and CEO of Cushman & Wakefield Commercial Advisors, a Memphis-based regional affiliate of the real estate firm. “There are people of goodwill, but their voices have been quashed by this political environment. We need a new way of interacting with political parties.”

Like Jensen, many other CEOs are now trying to figure out how they can advance the interests of business—all business, not just their own—through a mastery of the political process, even though so many balls are still in the air. The confusion argues that business leaders should define what’s important to them now and advocate for it rather than waiting to see how things evolve.

“Business leaders and CEOs have the opportunity now to really step up and engage with elected officials in developing policy solutions,” says Steve Odland, CEO of the Committee for Economic Development, a nonpartisan public-policy organization, and former CEO of Office Depot and AutoZone. “Business leaders have had their heads down basically for quite some time. But any time you have a change in Washington—and this is truly a lot of change—it creates an opportunity for re-engagement. Now they should re-engage.”

Some political leaders clearly are counting on exactly that. “We’re Americans first, and CEOs play an important role in reminding people that we’re Americans first, and what a great country we live in,” U.S. Representative Debbie Dingell, a Democrat from metro Detroit who used to be a Republican, told Chief Executive. “They need to help pull people together so we’re not looking at the world as a partisan divide.”

No doubt the vote rocked CEOs’ worlds. Of course, many are happy with the prospect of a President Trump who has promised to roll back regulations, cut taxes, encourage hydrocarbon production and overhaul Obamacare, among other things. And they’re only a subset of a much larger group of company leaders who would be happy if precursors of an uptick actually translated into stronger business growth in the first quarter and beyond.

But CEOs also realize that the long-term stability of American democracy is even more important than short-run considerations. They recognize that America’s current political system is highly susceptible to being swayed by events, trends and even individual politicians such as Trump. Many business leaders see a yawning challenge in reforming America’s political processes and mustering the wherewithal to ensure the nation’s future.

Some business chiefs believe the major political parties are a place to start. After all, the 2018 elections are less than two years away.

They see the Democratic Party as having abandoned working-class whites who turned out in huge numbers for Trump. One possible response for national Democrats is to double down. Rather than “look for areas of compromise” in Congress, for example, says Alan Blinder, head of the Princeton University economics department, Democrats may “become what Republicans have been for years: the party of obstruction,” despite their minority status.

However, many Democrats are seeing a different message in election results that left them with less power than they’ve held in decades. “Obviously Democrats lost the white American worker, particularly those without a college education,” says Harley Lippman, CEO of the New York City tech-staffing firm Genesis10 and a devoted fundraiser for Hillary Clinton who attended her election-night party at the Javits Center. “Democrats have to pay attention to that.”

Republicans, too, are in the midst of a potential redefinition of party philosophy along the lines of Trumpism. “Are Republicans going to follow him down the line?” asks Blinder. “I’m not convinced that they will. [Trump] is a deviation from the norm who won the electoral vote narrowly while losing the popular vote decidedly. And it’s a stretch to think he won the election on the issues.”

Indeed, the blue-collar workers who helped elect him may pose Trump’s biggest challenge going forward, even as they’ve forsaken the Democratic Party. Most of their manufacturing-job losses have been due to global economics and digital technologies, not the “bad trade deals” excoriated by Trump.

But at least the Republicans are addressing a scrambled future from a position of relative strength, now controlling the White House and both houses of Congress, as well as enjoying the party’s biggest advantage in governorships and state legislatures in decades.

Besides participating in fixing the parties, here are 8 additional ways that CEOs could be putting their shoulders into saving their country.

1 / Help create a new political center. For most of 2016, New York Times columnists Thomas Friedman and David Brooks were especially ardent in sounding a drumbeat for the creation of a new American political center, far inward from the alt-right and alt-left, removed from the vitriol and extremism of Bernie Sanders and Trump. But since the election threw the nation’s true political dynamics into alarming relief, more Americans are flocking to what Brooks calls “important caucus formation [in] the ideological center.”

This includes No Labels, a six-year-old organization that has created a centrist screed with 60 proposals to stimulate job creation, overhaul the tax code, balance the budget and undergird entitlement programs. No Labels even has an active congressional caucus that boasted more than 80 members before the end of the year, divided relatively evenly between the GOP and Democrats.

Cushman & Wakefield’s Jensen joined No Labels, too. “What we’re saying is, it’s time to stop,” he explains. “If we don’t figure out how to create a political center, we’re never going to get anything done. That’s the reason I decided this would be worth my time and effort.”

King White is a “diehard Republican,” but even he sees the need for “migrating to the middle. The whole system is screwed up,” says the CEO of Site Selection Group, in Dallas, “and that’s why everyone is voting the way they are.”

2 / Focus on bipartisanship. While seeing how a centrist coalition might develop, some CEOs believe they can be most helpful in the early days of the Trump administration by facilitating quick policy action in areas where both parties and the new Administration agree: launching an infrastructure-construction blitz, cutting corporate taxes and regulations and reconsidering Obamacare.

“The early focus should be on policy areas that need attention and where you can get some things done,” Odland says. “The focus should be on bipartisanship to do it. This requires getting back to regular order in Congress and well-functioning governance. Americans want the logjam broken.”

CEOs can help by leading “efforts to compromise,” says Tim Hebert, CEO of Atrion, a Providence, Rhode Island-based IT-services provider. “We are all Americans. We need to do things where the majority overwhelmingly is going to benefit, so compromise is important. That will be viewed with disfavor by people who have a doctrinaire view of things, so it will be difficult.”

3 / Reform business representation. One thing many CEOs believe in deeply is corporate lobbying efforts. “While one or two CEOs may advocate a position, their views are much stronger coming from a larger association that represents hundreds of companies in a similar position, employing thousands of workers,” says Dan Sandberg, president and CEO of Brembo North America, a Tier One auto supplier based in Plymouth, Michigan.

At the same time, White says, the cover of a group also “can protect CEOs from too much exposure as individuals.” And by being “apolitical, these groups “can be most effective in today’s highly polarized political environment.”

Yet Brooks argues that CEOs must push to upgrade corporate lobbying organizations such as the Business Roundtable and U.S. Chamber of Commerce. “The business community has been ill-served by these existing organizations, the conservative New York Times columnist told Chief Executive. “They got too close to a version of the Republican Party that has just been displaced” by the electorate’s views on trade and immigration. “These organizations should be a little more distant from the parties and also a little more sensitive to the people who voted Trump in” by re-examining some of their stances.

4 / Educate the president. CEOs must step up to the challenge—and the opportunity—to help the Trump Administration understand and appreciate where they’re coming from.

“CEOs must make certain their point of view will be front and center and that [Trump] understands their company’s and industry’s point of view on those issues,” says Ron Williams, former CEO of Aetna and current member of blue-chip boards, including American Express, Boeing and Johnson & Johnson. “As a community and as individuals, CEOs have an obligation to present practical solutions that reflect their views and their industry’s views. And most of those views are fairly balanced.”

This won’t necessarily be easy, Williams cautions, given Trump’s lack of background on many issues and clear insistence on asserting his own point of view. For example, “When he listens to builders and the real-estate development and hospitality industries, he’ll listen with a level of understanding someone else wouldn’t have,” he says. “But in other spaces—if he’s hearing from pharma, or aerospace or whatever—he won’t have that level of personal interest in it.”

Sunnova CEO John Berger, for example, wants to get President Trump’s ear about the importance of deregulating America’s electricity market. “We want to bring consumers choices,” says the head of America’s largest private solar-energy company, based in Houston. “It’s most likely the single biggest way of unleashing job growth and wealth creation in the economy today.”
If any cohort of CEOs could expect a brush-off from Trump, it’s those in Silicon Valley who contributed heavily to Hillary Clinton and openly lambasted Trump’s positions on trade.

But Kirk Krappe, CEO of Apptus, an e-commerce outfit based in San Mateo, California, insists that even his peers will be able to shoulder into a place at Trump’s table. “Just as a byproduct of the innovation and advancements coming out of Silicon Valley,” Krappe says, “we’ll be able to get the spotlight.”

5 / Get involved closer to home. From issues of business climate and regulation to infrastructure and the fitness of the labor force, CEOs typically can have the most impact closest to where they do business, especially mid-market chiefs. This means wielding influence on politicians like city-council members, state legislators and governors, as well as becoming active in metropolitan and regional business groups.

This approach also calls for companies and CEOs to act alone when necessary on the community level. “It’s easy to be isolated and look at your business and how good or bad things may be,” Hebert says. But CEOs “need to take a closer look. It’s not about complaining about what’s wrong with the country, but about doing things that can make the country and the world better.”

For example, because Hebert is concerned about failing public education, more than a dozen of Atrion’s 60 employees mentor a total of 20 students at a charter school in Providence. “My goal is to get them to graduation,” he says. “It’s the sort of thing that every small business could do to have a positive impact on our society.”

6 / Focus on jobs and growth. A uniting force for CEOs and politicians on both sides could be their dedication to sparking economic growth and, specifically, job creation and preservation. Trump certainly proved the resonance of this issue. Now Democrats as well as Republicans “must address the needs of the middle class in a better way,” Lippman says. “Job creation tends to do that.”

A focus on long-term job creation must include boosting workforce development, White argues. “Whether it’s an automated facility or a low-skilled facility or a call center, we’ve got a labor problem,” he says.

7 / Engage on trade. Trump has demonstrated the importance of his stance on trade with pre-term initiatives such as pushing Carrier into keeping about 1,000 jobs in Indiana instead of moving them to Mexico.

As Blinder puts it, trade-involved CEOs will have to decide “how they will react to potential presidential [pressure]. There will be more cases where companies want to move jobs to Mexico or Vietnam or Europe. These things happen all the time, and we’ve yet to learn how frequently and vigorously President Trump will try to browbeat people on that. And then for CEOs, there will be the huge decision: how do they react to the browbeating?”

Yet trade remains “a place where business leaders could engage in a positive fashion,” Odland says. “You can’t export without allowing imports. But CEOs can help focus on fairer trade where people are engaging and following the rules and there’s a level playing field. Business leaders may be best suited to make this point.”

Maggie Wilderotter, former CEO of Frontier Communications notes, “Trump is a businessman who does business internationally, not just in the U.S. So there is common ground in his background and understanding that companies grow not just at home but also abroad.”

In any event, notes Brooks, “Trump won’t be great on trade from most CEOs’ perspectives; but there are degrees of badness”—meaning that business leaders are hoping the new president’s pro-growth tilt will help offset damage that might be created by his trade policies.

8 / Stick to your knitting. Even as they get involved more broadly, CEOs must also be careful not to get distracted from their most important role. “The CEO’s job is to focus on the company, its future and long-term, sustainable value creation,” reminds Williams. “So in most instances, it’s unwise for the CEO to be viewed as a political operative of either party.”

Some CEOs believe that their peers should simply stay out of Dodge altogether. “If I were competing with other CEOs to bring a new wave of technology to market, I would love for them to spend a lot of time in Washington,” says T.J. Rodgers, founder and former CEO of Cypress Semiconductor and a libertarian who didn’t vote for Trump Odlandor Clinton. “Instead, they should stay at home; hire good people; bring excellent technology to market; and dominate the market. Serve it well.”

Nevertheless, more CEOs seem to be willing to go where only outlier peers such as Starbucks’ Howard Schultz and Silicon Valley’s Peter Thiel have gone before: out on a limb. Many would like to boost what Odland calls “business statesmanship.”

“Business leaders have withdrawn from the public square over the last decade or so and are dealing only with their lobbyists,” he says. “We need to re-engage as business statesmen, rise above our parochial interests and work in the interests of the nation.”

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