Would You Let Trump Run Your Company?
In Washington, people struggling to come to terms with all the details of James Comey’s sacking and the claim that Donald Trump asked him to drop the FBI’s investigation into Michael Flynn have reached back to Watergate for comparison. But in many ways the more appropriate perspective is through a business lens: The immediate issue is whether a boss tried to halt embarrassing revelations about his company; the underlying one is whether he knows how to run it.
Of course, running a country is not the same as running a company. A president is both more constrained (by Congress, the press, and voters) and less so (chief executive officers, as a rule, can’t bomb their opponents). And Trump is not the first incoming president to have boasted of his corporate experience; remember George W. Bush, the first MBA president? But Bush had also run Texas. No president has tried to claim the mantle of CEO-in-chief as completely as Trump.
On the campaign trail, he cited his business experience all the time, contrasting his decisiveness, managerial skills, and shrewdness as a negotiator with the amateurish stumbles of Barack Obama and Hillary Clinton (not to mention several generations of U.S. trade representatives). Many of his first supporters knew him only as the archetypal “You’re fired” boss on The Apprentice. He rushed to bring in figures from the corporate world, luring Rex Tillerson from Exxon Mobil Corp. to run the State Department and a string of Wall Streeters. The stock market initially boomed. Trump’s message to business has been simple: Finally you have an executive in charge of the executive branch. “In theory I could run my business perfectly and then run the country perfectly,” he boasted to the New York Times shortly after his election. “There’s never been a case like this.”
So out of all the ways in which Trump might want to be measured, judging him as a chief executive would seem to be the fairest to him. Forget about ideology, his political agenda, or whether you voted for him; just judge him on whether he has been a competent executive. Would you want to leave him in charge? Or would you be calling an emergency board meeting?
The Comey fracas is the latest in a long list of apparent transgressions for which a normal CEO might lose his job. In the last week, Trump stood accused of having passed on intelligence secrets to the Russians. Any business chief who invited a competitor into the boardroom and then disclosed sensitive information would be in peril. (Klaus Kleinfeld lost his job at Arconic Inc. merely because he wrote an unauthorized stroppy letter to a truculent shareholder.) Appointing inexperienced relatives to important positions is not normally seen as good corporate governance. Jes Staley is currently in trouble at Barclays Plc just for allegedly protecting a friend. The White House was made aware that Flynn had lied to the vice president on Jan. 26, but he didn’t hand in his resignation to Trump until Feb. 13. Any board would want an explanation for that delay. Finally, any CEO who says something that is manifestly untrue in public or on his résumé is in hot water. Those who refuse to correct themselves quickly and satisfactorily often have to go—as happened to the bosses at Yahoo! Inc. and RadioShack.
Behind this list of individual transgressions sit four larger failings: This CEO-in-chief has failed to get things done; he has failed to build a strong team, especially in domestic policy; he hasn’t dealt with conflicts of interest; and his communications is in shambles.
It’s harder to achieve things in politics than in business, as many businesspeople-turned-politicians (including the owner of this magazine) will attest. But Trump’s record of achievement would make any corporate compensation committee cringe. Despite his party controlling both the Senate and the House, health care is stuck: Trump seems to have made the elementary CEO mistake of wanting to get rid of something without having any idea of what to replace it with. Tax reform, another signature theme, currently fills a single piece of paper. If any chief executive had shown that to his board, the members would have assumed it was an April Fools’ Day prank. The details of his great promise to build $1 trillion of infrastructure have yet to be delivered to Congress. He has issued a string of executive orders, but some of them, notably on restricting immigration, have been so poorly crafted the courts have blocked them.
It’s not a completely blank slate. Trump has appointed a competent Supreme Court justice. He’s made deregulation a priority. In national security, perhaps thanks to the grown-up trio of Tillerson, Defense Secretary James Mattis, and H.R. McMaster (Flynn’s replacement as National Security Adviser), he’s shown some signs of deftness and purpose, such as the missile attack on Syria. On “fair trade,” the area ironically where most businesspeople wish him failure, he may have made progress with Mexico and Canada. But in general, America’s stock has dropped abroad: The president has messed around his customers and suppliers (one way to look at allies), with many drifting toward America’s principal long-term competitor, China.
Much of this would be retrievable if Trump had been doing what most sensible incoming CEOs do: building a team to govern the country. This second big failing is where he looks least professional. His list of unfilled posts and ambassadorships is far lengthier than Obama’s. Europeans don’t even know whom to discuss the G-7 with. And there’s the whiff of cronyism. Trump’s instinct has been to stick with friends, like Flynn, and relations, like his 36-year-old son-in-law, Jared Kushner. He seems to spend as much time listening to Kushner on foreign policy as he does to the more seasoned Tillerson-Mattis-McMaster trio. There appears to be little structure in the White House. It’s more like a court than a company, with the king retiring to bed with a cheeseburger and spontaneously tweeting orders.
This dysfunction is fed by a cavalier approach toward conflicts of interest. In most businesses, this is something most incoming bosses deal with quickly and automatically. There’s an ethics policy, and you follow it. That policy usually has two levels: first, obeying the law; second, setting standards and following processes that avoid even the impression of any conflict. This second prohibitive level is crucial.
It may well be up to Congress or the courts to decide whether Trump has broken any laws with his alleged requests to Comey. Similarly, Trump’s children and relatives haven’t done anything illegal in promoting a Washington hotel that sits on federally owned land or by hyping their connections to Chinese investors. But what is manifestly clear is that Trump and his family have failed the prohibitive test. They haven’t clearly separated out their personal businesses from their public duties and powers. He’s appointed relatives to positions—such as making peace in the Middle East, in the case of Kushner—that they’re legally entitled to hold but are not obviously qualified to do.
Then there’s communications. In business it sometimes helps to be unpredictable, but when two senior people publicly announce opposing versions of what they think the CEO wants (as Tillerson and Nikki Haley, his United Nations ambassador, did recently regarding President Bashar al-Assad in Syria), that is not a good sign. Twitter worked well for Trump on the campaign; as a way of setting policy, it’s self-defeating. If a CEO put out a press release implying he had recorded a conversation, as Trump has done with Comey, the board would want to listen to it.
And finally there’s that awkward thing, the truth. Both politicians and businesspeople exaggerate their achievements, but they seldom get caught in verifiable untruths, such as claiming your crowd is bigger than your predecessor’s or saying that you invented the phrase “priming the pump,” without at least a hasty apology. It’s not surprising that Mitch McConnell, the Republican leader in the Senate, has called for “less drama” from the White House.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.