Friday, August 31, 2012

Romney: A Manager, not a Leader


I'm uneasy about Romney, as the last post shows. And the more I think about it, it's because of the kind of business person he is. He is firmly on one side of the well-known distinction in business between a manager and a leader.

Romney is a manager. That means he thinks in terms of doing things right, rather than focusing on what is the right thing to do. He is all about efficient operations, rather than staking out new ground. He is about making sure rules are followed, not rethinking a product or getting people to follow him.

I've talked about this in general terms before on this blog (see the link for a famous Harvard Business Review article on the issue).

The trouble is the Presidency is much more about leadership than about management. It is much more about setting the strategy and knowing what to do, and how to adapt to change, rather than making sure inventories are optimized or procedures are standardized.

A President cannot simply be a good administrator, because he has very little administrative power.

I've talked a lot about US politics professionally over the years, and tried to explain DC to many foreign investors. They automatically assume that the President is the most powerful person in the world, so can get his way. And from a foreign perspective, he can certainly park a Nimitz-class aircraft carrier off their shores any time he likes.

But the truth is also that the President has very little direct power to order people around on the things that matter, especially domestically. Perhaps the best-known study of the modern Presidency is Richard Neustadt's classic Presidential Power, the Politics of Leadership. Neustadt says the main power the President has is the power to persuade.

Unlike a British Prime Minister, a US President can't just decide the government budget and order his party to vote it through parliament. Congress takes a President's budget as just a mildly interesting wish-list of suggestions, which it then generally ignores.

Even when his party controls both Houses, a President can't rely on Congress to do what he wants. For example, House Republicans threw out George W's bid to privatize social security, and Senate Republicans recoiled from his Harriet Miers nomination.

It takes time for Europeans or Japanese investors to understand that the President has to charm and ingratiate Senators from Kentucky, or Ways & Means members from suburban L.A to get anything done. The Supreme Court can take its time deciding whether to throw out his biggest legislative programs, as Obamacare shows. State and Local Governments can sue and block and delay, and federal agencies squawk and squabble like Romney's five young sons on a long car trip.

So a President actually has very little control as a manager. There are plenty of powerful independent people with their own political bases which can fight him to a standstill. Checks and balances are meaningful.

Instead, if he (or she) is going to be effective, it has to be as a leader. He needs to motivate and inspire and cajole and set the direction.

America needs leadership to adapt to change. It needs an update to its creaky business model, so to speak, not more efficient management of the supply chain or prettier Presidential budgets. It needs to compete and improve its game, not concentrate on the cost of office supplies.

But Romney wants to stress his business administration skills.



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