How Business Expertise Translates Into Politics

There's a nice sub-thread developing in the "Sucker Punched" post about how, and when, business expertise actually helps candidates, and the degree to which Romney's did or didn't. This is not my area. But here are a few comments from thread:

Good evidence that, quite contrary to GOP coventional wisdom, business types do not make for good poltical leaders. CEOs and, worse, money men, are very simply not used to people telling them what they do not want to hear. My father's company was bought by David Koch, and it drove my father nuts. You very simply cannot talk to the man. He does not listen to anything he doesn't want to hear, and at some level doesn't need to. He can afford not to. Romney is cut from that same cloth.

My assumption was that, in business, wanting to hear only the good news would be an innovation-killer. Some responses to that::

Business leaders do in fact have to deal with constituencies they do not control. And they generally have to manage, lead, and inspire large groups of people. So you can make a case that a CEO, particularly one that has had to build a business, has skills that should translate. 

But Romney was not a business leader in quite the same way that the head of a major industrial corporation is a business leader. He was a dealmaker. His expertise lay in knowing how to negotiate acquisitions of businesses, knowing how to efficiently finance those acquisitions, knowing how to reengineer business processes so that they yielded more cash. (I don't know enough about his Olympics experience to comment on it.) 

To put it very broadly, these are spreadsheet skills more than people skills. So, I'm not too surprised that he had difficulty building a large people-intensive organization efficiently. Community organizing is a more relevant background for that.


I think political campaigns are just very different, because they are about you. If you run a company, you want to know if a particular product line is not working well because you can go and try to fix it. There's no 'insult' to the fact that the product is broken. But having to tell someone the product sucks when the product is *you* is just very different. It requires a very different mindset.


The entrepreneur that is one thing. But the professional manager/MBA type is a different thing. Honestly, a lot of the pride and emotional investment in that second category comes less from building up a product than from profits, market shares and beating forecasts. Sometimes completely dumping something you do as a business will be seen as a genius move (like Welch's GE) as long as it is successful competitively and financially.


Actually this has been an ongoing problem for much of American business. The innovation that we boast about very seldom comes for old line businesses. Look at Microsoft and Apple, as they age they slow, they begin to get corporate dementia, forgetting that the innovation led to the success and starting to think that the processes led to it, the processes they used, the processes they manage. Romney didn't create the business model he got rich from, he just implemented a new instance of it. There was no innovation, just execution.


If we were talking about an actual market, where transactions were open and aboveboard, yes. But remember that the business of Bain was made deliberately complex, deliberately obfuscated, and that the deals it made were deliberately one-sided. The people who run these kinds of firms are not dealing with the same pressures as those who actually have to create and move product. Even in industries with healthier markets, one often sees this type of attitude at the executive level. They really do exist in bubbles of yes-men and women, people who never tell them that the emperor, in fact, has no clothes. (Ross Perot in 1992 is a great example.)


I think it's about sales, which is in part about putting the product and yourself forward. A great salesman (of either gender), is one who can sell something *regardless of its intrinsic merits.* And the very best come off as very sincere, because they sell themselves first. 

For CEOs, there's the salesmanship of persuading the Board that everything's going well, and inspiring Board members' confidence. The Board knows much less about what's actually going on than the CEO does, so the CEO gets rewarded for how he sells his performance to the Board.  

Pretty quickly, you run into the Willy Loman problem.

Please feel free to offer more. I'm all ears.