Over the past year I have had many thoughts on the political campaigns and their candidates, but to avoid becoming identified with political partisanship I have remained quiet in this space. But, now that the election is past and we know the outcome, I feel a need to speak out on what I believe to be a crisis in American leadership. This transcends party. I would be amazed if even one citizen believes that the political parties selected the two best possible candidates from our vast population of qualified and experienced executive talent. Both parties, and the American people, must reconsider how we go about selecting a candidate and the personal leadership qualities of those candidates.
My forty years working with many dozens of corporate executives does color my opinion. There are many highly ethical, wise and talented executives who could serve us well but who would not dream of entering the torture chamber of our political system. If we want the best talent, we must have a system that attracts that talent! The following are the key lessons that I derive from this election season.
The Power of Purpose
Leaders lead by giving to their followers an ennobling purpose and that purpose serves to create human energy and to unite that energy in a shared campaign to overcome challenge. All great leaders since Alexander and probably before have understood this requirement of leadership. Following a leader is an act of sacrifice and we only sacrifice when we perceive the goal to be worthy.
The moment I saw Donald Trump’s slogan, “Make America Great Again” I had a positive reaction. That will sell! Without overlooking his faults, Donald Trump understood marketing and salesmanship. He knew that to attract followers, to sell himself, he had to have an emotional hook. He found it and it worked.
Most buying decisions are emotional, not rational. While we like to believe that we decide to buy car A versus car B on a rational or logical basis, our logic is often a weak justification for our emotions. Pride, prestige, and image are often the motivations that we mask as logic. Trump knew this and Clinton did not understand it or was incapable of creating an emotional hook.
I repeatedly asked my wife, as we watch campaign coverage, “But what does she want to achieve for us? What is her purpose? Why am I supposed to care about her election?” Only midway into the campaign did she start using the slogan “Stronger Together.” It is a nice thought, but it did not elicit the emotional response and create the attraction of Trump’s slogan. It sounds like a slogan created by committee. It didn’t recognize the pain of many that felt left behind in this economy and felt a loss of respect.
It is indisputable that Hillary Clinton was more knowledgeable, had more relevant experience and would have been a safer choice. But her purpose was never clear. In our media culture of rapid fire Tweets and loud television arguments, most voters are not reading policy papers. They are digesting marketing messages.
Confronting the New World Order
With the inventions of the telephone, radio, television, microprocessor and the Internet, a “new world order” and a new economy was created. When the world confronted, and recovered from the tragic collapse of world order after World War II, a new world order was created with the United States at its center. All things change. History will not stop and the order of the world will continue to be recreated. No election will change that.
Dealing with major economic shifts is always frightening and stressful, and leads to social and economic disruption. It happened when there was mass migration from agricultural areas of the US to the cities during the industrial revolution. No politician’s promise was going to change that. But, leaders must lead, and that often means educating their followers, not simply pandering to their fears.
Most Americans do not understand the emerging “new world order.” Many imagine some demonic conspiracy that must be resisted. In fear is the impulse to withdraw beyond walls. It is the same fear that propelled Brexit and other movements in Europe. The fact of global economic integration, the integration and globalization of supply chains, and the economic rise of so called third-world countries, is a positive reality that will not change, and if any country tries to force a trade war or build economic barriers, it will result in their own downfall. Great wars are most often preceded by restrictions on trade. The integration of the world economy and cultures is the single greatest assurance of peace and progress. The new world order is not the prince of darkness; it is the prince of peace.
I believe in free enterprise and free markets. The assertion that the president is going to tell the CEO of Ford Motor Company where he can or cannot build a manufacturing plant is the ultimate contradiction to free enterprise and the greatest arrogance of “big government.” Ford Motor Company (just as an example) is not simply an American company. It is a global company and a global brand and its high growth markets are all outside of the United States. The same is true for most large companies. They have no choice but to both sell into those markets and to manufacture in those countries.
In 2014 U.S. manufactured automobile exports, yes, EXPORTS, rose to 2.1 million cars to Asia, the Middle East and even to Europe. Auto exports rose 73% from 2004, led by the U.S. manufacturing plants of Honda and Toyota. Do our politicians comprehend the meaning of this and are they willing to put all the thousands of jobs at risk that are supported by these exports? We are an “export economy” and that means trade agreements! This is part of the “new world order.” It is a lot more complex than the slogans would have you believe.
The auto industry is not the property of Detroit or Flint, Michigan (sorry, Michael Moore). U.S. auto production has moved to Greenville, South Carolina (BMW), Arlington, TX (GM) Alabama (Mercedes), Georgetown, KY (Toyota), and Marysville, OH (Honda). Free enterprise means companies move, change, experiment and this means workers must adapt to the changes and not expect politicians to keep things as they were!
We cannot go backwards, even if we try. The world is marching toward solar and other clean energies. We can pretend to live in the economic world of the 1950’s, but the rest of the world will leave us behind and we will be disadvantaged as a result.
There are close to ten thousand jobs in software development, writing code, that cannot be filled in the United States. Facebook has formed a company, Andela, that pays Nigerians to learn how to write code and then hires them to do web development. Why aren’t we training those in Appalachia to do the same?
If Donald Trump is going to be the great President he wants to be, he must have the wisdom to actually lead by informing his followers of the realities of the global economy and the new world order that is the economic reality of this age.
Successful Leaders Do Not Engage in Magical Thinking
If you are the CEO of a successful company, you have learned to be very skeptical of grandiose claims that are not backed up by detailed plans supported by data. They do not believe in magical thinking. Unfortunately, our media is saturated with magical fantasies.
There is a difference between selling or “making deals” and operating a company in a way that makes money. Donald Trump’s history is evidence that he is a great salesman and a terrible operator. After six bankruptcies, no major bank will lend him money. He opened the Taj Mahal Casino in Atlantic City just as the market was becoming saturated, and his new casino drained business from his other two casinos. They all went bankrupt.
A good executive knows how to make money from operations, not simply from “deals” or promises. A successful operation is measured by more revenue coming in than expenses going out, and this is a result of effective process management and customer satisfaction. The truth is that none of our current generation of political leaders have demonstrated the discipline to rationalize revenue to expenses. That includes both parties and both executive and legislative branches. We need the basic business sense of someone who has successfully managed business operations!
Many of Trump’s promises are not based on reality. Just one example: He did a great job of appealing to the coal miners of Appalachia. He has promised to put miners back to work by reviving the coal industry. Of course, they voted for him.
I spent many years consulting in the energy industry and have some small understanding of the energy market. We are just about energy independent thanks to hydraulic fracturing technology. Vast amounts of natural gas have been made available and consequently the price of natural gas has not risen since 1998 when the price was almost exactly what it is today. The world is awash with energy and prices will remain low. Oil and gas exploration is being cut back by the major oil companies because there is simply no market for new production.
No one burns coal in their homes. The market for coal is the electric utility industry and it competes with natural gas. The only way you put miners back to work, in any sustainable way is to double the price of natural gas. That would mean somehow creating a natural gas shortage. Exactly how is any President going to do that? It is not going to happen, and it is a disservice to those in coal country to create this false hope. In four years there will be more anger at one more politician’s failed promise.
One of the more insightful recent opinion pieces was by Tom Friedman who pointed out that since 1984 manufacturing output has doubled in the United States, contrary to popular belief. Auto industry production is near to all-time highs. We produce more manufactured goods now than ever before. But, manufacturing employment is one third of what it was. Jobs haven’t gone overseas. Jobs have gone to microprocessors! Anyone who works in manufacturing (and I do) knows that automated control systems, robotics and other computer controlled devices are what has replaced manufacturing jobs. But, few voters understand this.
Manufacturing jobs are not going to increase substantially, regardless of any trade policy. However, imposing tariffs (like a proposed 45% tariffs on Chinese manufactured goods) would be a tax on the average American consumer. Every dollar of tariff imposed on goods coming from China is a dollar out of the pockets of Wal-Mart customers. It would also set off a trade war that would result in China not buying our debt (therefore, increased interest rates on the national debt and all other debt), and they would buy less agricultural goods from the U.S. and more from Canada and Latin America. How many voters from Iowa and Kansas understand that half of all agricultural production is exported and those exports depend on trade agreements? If Asian buyers stop buying our commodities the prices will crash and we would all lose. Trade wars never end well.
Slogans and emotions can get you elected but they do not improve economic conditions unless they are backed up by realistic planning that considers the fact that for every action there is a reaction. That is how economies work. But, the emotions of the slogans trumped the logic of rational planning. Magical thinking won the election battle but will lose the war.
The Failure of Empathy
Leaders have empathy and even love for their followers. There is that great scene when General Patton got out of his jeep and marched through the mud and rain alongside the privates of the U.S. Army’s Third Army as they marched to relieve the surrounded troops in Bastogne during the Battle of the Bulge. It was symbolic of Patton’s affection for his soldiers. Patton was mimicking Alexander the Great. He even thought he was the reincarnation of Alexander. He wasn’t crazy. In spirit, he was Alexander.
When leaders express their love and empathy for their followers, the emotion is returned in devotion and loyalty to that leader.
Whatever one thinks of Donald Trump, he intuitively understood that a large population of Americans needed to feel empathy from a leader. The cheering crowds at his rallies were not simply “deplorables” or racists, or ignorant. And, I am not excusing the racists among them. They were average Americans who felt that they had been ignored, and they were happy to respond to someone who expressed empathy for their situation. Make America Great Again meant that “you will be respected and loved again.”
Hillary Clinton expressed empathy for minorities, immigrants and women and she won their vote. But, that wasn’t enough.
A test of Donald Trump’s leadership now is whether he will be able to express empathy for those “others” who now fear his presidency. The recent protests are not by what he termed “professional protestors.” That demeans them and fails to understand their fears, just as Hillary’s comment about “deplorables” was a failure of her ability to empathize with Trump’s followers. They all have legitimate concerns to which a leader must respond.
This same requirement for empathy is no less important for leaders of corporations.
Corporate executives, as well as politicians, can learn from the leadership successes and failures of the past months. I honestly pray that this country can move forward and not backward, that our leaders can unite us, give us purpose, and help us confront the realities of the world as it is and will be.