The way to save America is to run it like a business (and other myths)
Since the foundation for the dynamic growth of the American economy has always been based on individual entrepreneurial capitalism, it would seem logical, when the system is challenged and needs a spark to reignite growth, to turn to a successful capitalist and entrepreneur as a leader to fix the problem. After all, who better to lead the economy out of the wilderness than one who understands how business operates and grows and has been successful in harnessing these forces? Indeed, Mitt Romney is predicating his qualification to be president almost exclusively on the fact that he has, according to his campaign literature, spent “25 years in private business, building companies, creating jobs . . . he is the only candidate with the knowledge and business experience to get the economy growing again.”
It is an alluring and tempting argument.
Yet it is interesting to note that during the 230 years of American history, scores of entrepreneurial individuals have built immensely successful corporate empires that became the drivers of the greatest economic growth in the history of the world. But power and prominence in American society; none of them was ever elected president.
The Business of Businessmen is Business
America has elected 44 men to be President. There have been lawyers (far too many), soldiers, farmers, teachers, career politicians and even one actor, but not one was a successful corporate capitalist. And it is not as if there is a shortage of potential candidates who would seem to fit the bill to be president.
The list of great American capitalists is too long to list fully here, but we all know of many: Henry Ford, John D. Rockefeller,Andrew Carnegie, J.P. Morgan, Thomas Edison, John J. Astor, E.H. Harriman, Cornelius Vanderbilt, William Hearst, Andrew Mellon, Warren Buffet, Sam Walton, Steve Jobs and Bill Gates.
All of these individuals – and hundreds of others like them – built and operated various businesses and enterprises. Despite their business diversity, they share two things in common: They all became eminently successful in a way that influenced the very structure and success of America, a success that brought businessmen like Rockefeller (at left) both unfathomable wealth and high prominence in society. The other thing they had in common is that none of them were ever elected president.
Without a doubt, all of these individuals were exceptional leaders, possessing unique vision and perspective. They knew how businesses functioned, and how they grew and most importantly, how businesses create wealth. And yet, in over two centuries – during economic times even more tumultuous than now – the country never once looked to any of them for national leadership.
Mitt Romney’s Point of Presidential Departure
Mitt Romney would have us believe that this is an historical oversight that is long overdue to be corrected. He argues that the economic situation in the country is so dire that the only way out is to elect a successful businessman (c’est moi, who else?) to lead the country. Unfortunately, history – the reality of government and the world we live in – does not support his theory. It may be that Romney could be a successful president, but if so, it would be despite, not because of his business experience.
There are those who sincerely argue and believe that government should be run as a business, but the reality is that government – any government – is not intended to be a business. A government run as a business will fail because the objectives of government are distinctly different from the objectives of business. The purpose of government is to be passionate about the welfare of all its people; the objective of business is to be passionate about the welfare of its shareholders. The leadership mentality needed to make government function properly is the antithesis of the leadership temperament needed to run a business; and visa-versa when it comes to business.
And there are other meaningful differences. The power and structure in government is bottom-up where needs and actions of the many filter up through a series of checks and balances, shared power, and divergent interests (e.g., the needs of the young contrasted with the needs of the old, and compromise). Conversely, the power and structure in business is top-down: direction, decisions and actions are dictated, not debated. A CEO in business has the focused, specific power granted by the few (shareholders) to set priorities, make decisions, implement plans and direct the actions of all others; all with the single objective of profit for shareholders.
The favored attributes of a CEO are laser focus on specific actions to increase profits, efficient input-output analysis, decisive decision making and an impatience to get things done that translates into a sense of urgency. And it is fair to judge the CEO on this basis, because the power to act in this way is vested in the CEO. The favored attributes of a government leader are a focus on the broad ideology of the purpose of government, the patience to hear the views of many, the ability to cajole diverse centers of power to coalesce to take action and the skill to build broad coalitions that are willing to work together for the benefit of the many, not the few. And it is fair to judge the government leader on this basis because the power to govern comes from the broad base below, not the few at the top.
Put in simple terms, the CEO makes decisions based not on ideology, but on a dispassionately sterile, unemotional input-output of facts and figures for the purpose of increasing profits, while the government leader makes decisions based on a broader passionate ideology of the purpose of government to serve the needs its people. The best example of this contrasting style of leadership in government can be seen in the differences between the approaches of Jimmy Carter and Ronald Reagan. Carter, a trained nuclear engineer, clearly approached leadership decisions in business style, based on a facts and figures, input-output; and then became frustrated because the people seemed to be trapped in a “malaise.” Reagan, on the other hand, had no interest in making decisions based on factual input and output; he was clearly an ideologue who communicated and stuck to his core belief as to the purpose of government. It is clear which approach worked best as a government leader.
Whither Thou Goest, Mitt?
Mitt Romney may be the best example as to why it has been difficult for a successful business leader to be elected president. Romney’s entire approach to being elected president reeks with the business approach to leadership. He receives high marks for the structure and organization of his campaign. The media constantly is contrasting the Romney “well-oiled campaign machine” against the “caravans of confusion” that seem to plague the efforts of his Republican opponents. With his willingness to blithely change positions on core issues, i.e. abortion, Romney demonstrates the businessman’s ability to focus on the ultimate objective, rather than be hung-up with ideology. Of course, the main criticism of Romney has been his inability to “connect with the people.” He says the things (he thinks) the people want to hear, but not with a passion that motivates people to believe. When Romney does try to be “touchy-feely” and passionate, i.e. reciting “America the Beautiful” in a speech, he comes across as phony.
This is not to criticize Romney; he is bright, honest, smooth, polished and clearly a very successful businessman in his brand of capitalism. But it does expose his background and training, which is sympathetic to results, not people. For better or worse, the American voter has consistently elected leaders whom they feel are concerned about them and with whom they can “feel” a connection. This is really the most significant challenge for Romney, just as it has been for other business leaders in the past.
And the Moral of the Story …
To say that a successful businessman does not have the temperament to be president, does not mean that government should be inefficient, wasteful and ineffective; or that it should be fiscally irresponsible by spending more than the revenue it collects. It is intriguing to believe (hope) that when a government has become inefficient, wasteful and is sinking deep in debt that the answer is to turn to a successful business man who has experience at downsizing, slash-and-burn, cut expenses at all costs, as a way out of the problem. And Mitt Romney is certainly the best option available.
However, we are electing a president, not a dictator. Romney’s strengths fit perfectly in the world of business, but what are strengths in business become a liability in government. The CEO can command while the president must cajole. The CEO can provide goods and services insofar as it is profitable to do so. By the nature of this approach, it means that a significant number of the people are excluded from receiving these goods and services. Whereas a government is charged with providing goods and services that are determined to be the right of all to possess. Achieving this balance in government – where all are entitled to the goods and services of government – calls for a completely different decision making process than one used in a business for profit.
A business can be successful only if it is structured and led with the single focus of producing profit and doing the most for the fewest. A government can be successful only if it is structured and led with the single focus of providing for the many, rather than the few.