This is the second of a two-part report on Miller Center panels held at the Republican and Democratic National Conventions. Listen to the entire session below.
The Republican Party has just nominated its first nonpolitician for the presidency since Dwight Eisenhower. And for the first time in American history, a major party has nominated a candidate for the presidency with no previous history of public service—a CEO in chief.
A president with a private-sector background clearly has some appeal. After all, the federal government is the largest employer in the world, with more than four million employees. Several previous candidates have been CEOs before going into public service—George W. Bush had been an oil company CEO and was president of the Texas Rangers baseball team before becoming governor of Texas; Mitt Romney had founded Bain Capital before becoming governor of Massachusetts.
CEO transitions, particularly for large companies, have a similar charge, albeit on a much smaller scale. Should the next president look to the corporate world for guidance on successful transitions? If so, which lessons apply, and which are to be ignored?
The Miller Center’s First Year project commissioned an essay on this topic, authored by a team of McKinsey and Company partners, with input from a number of CEOs.
These questions—and that essay—were the focus of the Miller Center’s 2016 David R. Goode Conference, held Tuesday, July 19, at the Republican National Convention in Cleveland.
The event, featuring Senator Bob Corker (R-TN), former governor and RNC chair Haley Barbour, Bush 43 personnel chief Clay Johnson, and McKinsey & Company partner Drew Erdmann, examined what CEO transitions can—and cannot—teach the next administration.
The panelists represented a diversity of perspectives: chief executives of a city and a state, senior White House aide, business consultant, Senate committee chairman, transition and first year personnel director. Together, they offered some words of wisdom, and caution, for the next transition. Below are four themes that surfaced again and again throughout the conversation:
1. The transition teams must act quickly
The first stanza of a new administration requires individuals to accomplish a herculean number of tasks in a mercilessly short period of time. Clay Johnson, who led the personnel operation during the Bush-Cheney transition and served as White House personnel director in the first year, emphasized that the new team doesn’t have the luxury to focus on just management or just policy: “You don’t have a choice. You have to do all of the above well.”
Unlike private-sector transitions, where the CEO typically brings four or five advisors on board, Johnson said the president must appoint roughly 4,000 individuals across the executive branch, all while working to build and sell the top-line priorities of the president’s legislative agenda.
So you must be quick, but you must also be good. McKinsey’s Drew Erdmann, who cowrote the essay under discussion, said the presidency is similar to the corporate world in that “success can breed success.” Transitions of any sort tend to be successful if they decide where they want to go quickly, articulate it very clearly, and make the tough calls relatively early on to generate momentum for their agenda.
2. Both campaigns are behind
If articulating a vision early is the key to success, the panel argued that both campaigns are lagging. Haley Barbour former governor of Mississippi, recalled his own campaigns and the emphasis his team placed on everyone knowing what his priorities would be during the first legislative session: “This all starts in the campaign. If you’re going to be a new president, people ought to know what your agenda is when you get inaugurated.”
Barbour went on to say that neither presidential candidate appears to be trying to win a mandate for a particular policy agenda. They’re “just attacking one another.” Senator Bob Corker, considered to be on Mr. Trump’s short list for VP just weeks ago, agreed: “I think it’s difficult to discern right now exactly what the agenda is on both campaigns. You’ve got a tone and you’ve got a feeling.” But the candidates must give voters a better sense of what life will be like when they’re president.
Corker said this goes beyond one’s policy agenda to include laying the groundwork for working with the legislature during the first year. “Washington is yearning for a president that will reach out and communicate and have conversations,” noted Corker. “I would begin doing that immediately.”
3. Business and government are very different
Even as they found portable lessons from the private sector, the panelists were quick to highlight the vast distinctions between the presidency and being a CEO. Erdmann called transitions of Fortune 10 companies “orders of magnitude different” than the transition to the Oval Office. In particular, he said the “scrutiny is qualitatively different,” as all moves by the new team are dissected ad nauseam.
For Barbour, the key difference is that the president, even as he or she assumes the most powerful post in the world, lacks certain controls enjoyed by CEOs. The president must lead many individuals who do not report directly to that post. In contrast, everyone CEOs deal with is in their chain of command. Asked whether this might surprise the GOP nominee, Barbour said, “It’ll be culture shock for Trump. There’s no question.” Corker added that the nation is looking for some culture shock right now.
Mr. Trump faces additional challenges. Corker held that he might benefit from laying out potential administration officials early, “because he’s coming from the outside, and I think people want to get a sense of the type of people that he’s going to put in place.” Corker found Mr. Trump’s indication of potential Supreme Court nominees back in May to be similarly helpful.
He will also have to manage what Clay Johnson said Andy Card, Bush 43’s former chief of staff, used to call “the most valuable asset” of any president: time and voice. No CEO has had to understand and master that type of challenge.
4. Leadership is still leadership
POTUS and CEOs have critical differences, although some similarities obtain. Regardless, the panel concluded that succeeding in either position requires leadership. Barbour pointed to Presidents Clinton and Reagan as examples: “Good executives can lead a divided government. But the president’s got to try.”
Effective leadership often requires selecting a talented team and, according to Corker, giving them the room to do their jobs. Johnson estimated that of the top 400 Senate-confirmed jobs he shepherded through during his tenure, President Bush likely “never laid eyes on or heard of 200 of them.” But he knew and respected the people running personnel.
The presidency also requires a combination of people who have government experience and people from the outside who offer new perspectives. And they must be allowed to offer frank assessments when things have gone wrong. As Barbour concluded, “I don’t know anybody in politics who ever made it by himself.”
This topic will also be the subject of a special panel at the Democratic National Convention on July 26 in Philadelphia. Former Treasury Secretary Robert Rubin, Obama-Biden Transition chair Chris Lu, Miller Center presidential scholar Sid Milkis, and McKinsey senior partner Vivian Riefberg will participate in the conversation, moderated by Fortune magazine’s Alan Murray.
The 2016 Goode Conference was part of the Miller Center’s First Year: POTUS 2017 project, which provides historical insights and policy recommendations to guide the next president in the first year. The Annenberg Foundation Trust at Sunnylands and Fortune magazine were also partners for this year’s conference.
You can listen to the entire panel below or read a copyedited transcript here.