Corner Office to Oval Office– CEO to Politician to U.S. President: How Do Lessons of Business Apply to Running Government?

CEOs who build corporations often think they can master anything, including the maelstrom of modern politics… According to Economist; the skills demanded in politics and business are different. Politicians need to seek consensus; bosses can demand it. Politicians need to woo their foes… Executives can get them fired… Running a large company is complicated, but not as complex as overseeing a government in which diversity, competing interests, and many other factors… must be weighed and reconciled for the public good… But how do lessons of business– from deal-making to large-scale management– apply to the work of government?

Ross Perot in 1992, who perfectly encapsulated the pro-business argument in the presidential debates with George H.W. Bush and Bill Clinton said (n reply to his opponents’ observation that he lacked political experience): Well they have a point; I don’t have experience in running up a $4 trillion debt (now it’s about $20 trillion)… I don’t have experience in gridlock where no one takes responsibility for anything and everyone blames everyone else… But I do have much experience in getting things done…

According to Jon Meacham; business leaders often go to Washington thinking that focus on results produces shareholder value for taxpayers. The problem, of course, is that government is not a business. The public sphere is far less accountable to market measures than it is to the amorphous but real incentives and vicissitudes of politics… The main goal of business is– profitability, growth, productivity… And,  government’s main goal, in the words of John Locke, is nothing less than the good of mankind… However that’s not to say that experience in running large, complicated companies isn’t valuable in preparation for running large, complicated government…

In the article CEOs in Politics by David Brooks writes: At first blush, business success would seem to be good preparation for political success. A CEO learns to set priorities, manage organizations and hone analytic skills… However when you look back over history, there’s little correlation between business success and political success. The traits that correlate with successful presidents have deeper roots…

According to Richard Neustadt; many leaders who come from a hierarchical environment, such as; military, business… find it hard to make the transition to be an effective political deal-maker, where the premium is on persuasive ability… Bullying people who have their own independent constituencies is not really effective governing technique.

In the article Do CEO’s Make Good Presidents? by hxv112 writes: Political leadership has a set of challenges unique to public office because there is a formalized balance of power. In other words, a president is not able to do much without the other two branches of the federal government agreeing… Whereas in business, CEOs worry less about hurting feelings or being politically correct, as long as the company produces favorable results… According to Mickey Edwards; being a CEO from business is not a dis-qualifier to holding public office but it’s not a qualifier, either…

In the article Myths That Government Should Be Run Like Business by Philip Joyce writes: Some consensus has developed among scholars about the fundamental ways that running a government is different from running a business. It’s important to know that government, particularly large ones are complex organizations to manage, much more so than any business… Here are a few reasons:

  • Government is about serving the public interest:  Business care about stakeholders and customers; they do not generally care about people who do not invest in their company or buy things from them. Thus, accountability is by necessity much broader in government; it’s much more difficult to ignore particular groups or people…
  • Business performance is measured by profitability: Government performance must focus on the achievement of outcomes. And the lifeblood of business is profitability…
  • Compromise is fundamental to success in government: No one owns controlling share of the government… The notion of a separation of powers is anathema to an effective business. But it’s central to the design of government…
  • Government must constantly confront competing values: Efficiency in business is value number one… and in government, it’s just one of many values. In fact, efficient solution may disadvantage some groups, trample on individual constitutional rights of others…
  • Government actions take place in public: In government there is the watchful eye of– press, groups, public… In business, leaders do not find it necessary to explain their every decision to anyone except stakeholders…

In the article CEOs as Effective Political Leaders by David Davenport writes: Leaders in business are accountable for well-defined goals, e.g.; profit, growth, productivity… By contrast political leaders often have ill-defined, unclear goals… They have multiple constituencies and plethora of responsibilities measured primarily by vagaries of political polls, elections. They have much responsibility but unlike business CEOs, relatively little authority to get things done; it’s the realm of persuasion, not power. They only get things done when they can convince congress and others to join in…

According to Milton Friedman; business leaders must be pragmatic, they must make things work, they are responsible for the bottom line, and rarely are they philosophers… As a consequence, when you look at great presidents you don’t see many business leaders on the list. According to William W. Campbell; majority of U.S. presidents were lawyers or career politicians; there were eight generals, some engineers and professors, an actor, and a smattering from other professions… but none were CEOs from business…

In the article Pitfalls of a CEO President  by Susan Milligan writes: Some experts say that being a CEO in the business world doesn’t prepare one for government…. Being the boss in business, they say, simply does not translate into being the boss in government with over 300 million-plus citizens and lower ranking co-workers… who they can easily push around, let alone fire… According to Marie McKendall; most business people don’t understand how government works, e.g.; They must share power. They must collaborate. They must be sensitive to interests of people… Government is a regulatory maze with checks and balance… Whereas CEOs are accustomed to making things happen, quickly; well that doesn’t often happen in government.

CEOs are often motivated to run for political office because they share the frustration of many citizens– that the government is not working effectively or efficiently… According to Susan McManus; CEOs see government as a financial mess and they think they can fix it… But very nature of government is dramatically different from business…

Business exists to produce products/services and generate a profitable return for stakeholders investment… Government exists to take care of its citizens by doing tasks that are by definition not profitable, such as; caring for poor and elderly, fighting terrorist and wars, fixing roads and bridges… Although there are overlap in skill-sets, there are personality traits that are required when running a country that are different when running a business…