Trump Ignores Lessons From CEO 101
President Trump reminds us all too frequently that he has never been a governor, mayor, cabinet secretary, legislator, military officer, police commissioner, nor even a selectman, sheriff, or municipal waste water treatment plant superintendant. Zero, zilch. Never been there, nor done that.
This is not to say that any such prior experience was always useful to former presidents. Yet none stepped into the White House with such a blank government service résumé.
Which is why we voted for him.
What makes Donald Trump’s freshening tenure astonishing is that he has accomplished anything. Those who dismiss his early-round scorecard as having failed to enact major legislation, sidetracked by personnel controversies, and stymied by federal court restraining orders, have little comprehension about the immense transition from being the boss of his own private enterprise to president of the United States.
We also voted for Donald Trump thinking his CEO stature would be a bonus. Except we see that Trump’s particular type of CEO experience is now a disabling liability.
When you own the company, you have the first and last word -- and most of the chatter in between. While CEOs who own their businesses may not have to learn how to be consensus politicians, they often must be bolder, and more athletic risk-takers. They have no safety net of committees, boards, and stakeholders to temper their more radical impulses.
CEO owner/operators entering the public sector quickly learn that a number of the skills enabling their former successes don’t apply, or must be tabled for the right moment. Most are bewildered and frustrated that decisiveness, speed, authority, and thinly calculated randomized decision making -- on the fly hunches -- are neither valued nor rewarded, and are often a barrier to getting much done, even inviting political and legal jeopardy.
And as a CEO owner/operator who inherited his business when it was a pedestrian enterprise as compared to today, Donald Trump never had to re-engineer a company culture. He merely built it in his own image.
Trump was his company’s culture.
Lessons learned by public company CEOs, especially those who zigzagged their way up from entry-level whatever to the corner office, were never important, nor useful to Trump the CEO owner/operator. Such lessons were irrelevant.
There are two survival lessons for public company CEOs:
- Never be alone in a room with a powerful potential enemy who is a known dissembler, when your topic can be twisted for his gain to your detriment.
- Never disparage a powerful potential enemy who is a known dissembler, after you’ve demoted or fired him.
Donald Trump never had to deploy those lessons because if in trouble -- from alleged wrongful discharge, or employment discrimination, harassment, business transaction malfeasance, or any other civil claim -- he could invoke a legion of tenacious private litigators, accompanied by sizeable bank accounts for negotiated settlements. Public company CEOs can count on those luxuries only rarely, if they want to keep their job or their company reputations safe from media hounds and shareholder activists.
Donald Trump as CEO of his own business, and especially in the real estate development business, had been accustomed to navigating state, local, and at times federal agencies -- with deal making at the core of getting things done.
But piloting around government bureaucracies as a CEO of your own business -- whether it is worth a million, or billions -- has little resemblance to running government bureaucracies and navigating the labyrinth of norms, procedures and cautions, not to mention legal governance statutes, codes, and federal court precedents.
Landmines, trapdoors, and ambushes inside government would challenge the most seasoned CEO of a public company. Private company CEOs by comparison are at an even more desperate disadvantage, especially when they can’t rip out the prevailing culture, and its protocols, because it is someone else’s culture, protected by more than two centuries of a governing legal mosaic.
Moreover, as a completely different species of organization men, private company CEO decision makers don’t suffer second-guessing or oversight by anybody. They may suffer consequences of poor decisions -- defections by and occasional plaintiff claims from customers and suppliers, reluctant bank lenders, or loss of brand equity, even bankruptcy. But CEO owner /operators are their own supreme masters, and commanders -- to their glory or demise.
Public company CEOs are accountable to boards of directors, and stockholders. Major financial, and personnel decisions are subject to assent or veto by audit committees and compensation committees. Public company CEOs are constrained by regulatory hedgerows from the SEC, Dodd-Frank, and Sarbanes-Oxley.
CEOs of the most prominent public global enterprises can be charismatic transformational leaders, such as GE’s Jack Welch, or brutally efficient transaction chiefs, largely unseen on the public stage, such as CEOs of ExxonMobil. Yet while they have hierarchical authority bestowed on them from company bylaws, limits on those CEOs’ unilateral decisions, e.g. betting the company, are considerable.
CEO owner/operators have compliance burdens, of course, just like their public CEO cousins, from ERISA, OSHA, Fair Labor Standards, EPA, export regs, Federal contracting regs, FTC, FDA, anti-trust statutes, etc. But the spotlight has fewer lumens. And the color rendering is blurred.
The best public company CEOs devote lifetimes cultivating bi-lateral skills in collaboration, persuasion, diplomacy, and negotiation, often in obscurity. What often appears as an autocratic decree is a well-greased prior consensus.
And successful public company CEOs comport themselves within their lawyers’ warnings, and don’t expose themselves, or their organizations to needless PR or legal perils.
Of course too many public company CEOs are excessively risk-averse, which is what made a candidate Trump, the exact opposite, so appealing. Yet as President Trump, taking needless risks is reckless and unnecessary, doing nothing to advance his agenda, but everything to derail it.
So Donald Trump could have relied upon the only maxim readily transferable from CEO owner/operator to U.S. president -- that singular trait amongst all first-rate executives, be they entrepreneurs, private enterprise CEOs, CEO owner/operators, institutional heads, public CEOs, governors, military flag officers: the ability to choose the right people at the right moment. And getting rid of those who don’t fit, pronto.
But Trump never learned that lesson, or militantly ignored it. Thus Trump remains tormented by the residue from Michael Flynn and James Comey.
Be in a position to pick the right person instead of coping with the wrong one. That was a frequent maxim of Mike Beer, my favorite organization behaviorist guru at Harvard Business School. For CEOs who follow that advice, life is good. For those who ignore it, life is miserable.
Donald Trump could not have made it to the White House without being resilient, tough, and unconventional. Now he needs to become a lifelong learner, taking to task those lessons he has so far shrugged off, but vital for him to embrace if his White House sojourn will be more than just making a Supreme Court appointment.
Geoffrey P. Hunt is a retired senior executive of a global industrial firm.