Why CEOs Make Dreadful Elected Officials

Last Updated Oct 3, 2010 1:18 PM EDT

Never before have so many former CEOs been running for high office. Meg Whitman, Carly Fiorina, Carl Paladino, Rick Scott, and Linda McMahon are all seeking to become political leaders. But if history is any guide, they'll probably screw up royally if they're actually elected.

It never ceases to amaze me when political candidates trot out their experience as a CEO as evidence they'll be effective when elected. The opposite is almost always the case, because the strategy, tactics and skill set for being an effective CEO is completely different than what's need to be an effective public servant.

The average corporation, far from being a training ground for a modern republic, is actually the exact opposite. Most corporations are run as dictatorships, with supreme power concentrated in a single individual. In fact, some firms are still run as hereditary monarchies, with children inheriting supreme power regardless of their actual talents. That's a form of government that was state-of-the-art in the middle ages!

In a modern republic, there are checks and balances. Public servants can't stuff the other branches of government with cronies and time servers, like most CEOs stuff their boards of directors. A governor, for example, must deal with the state legislature and judiciary, which together generally hold more power than the governor.

Nothing can get done without satisfying multiple constituencies, so the "my way or the highway" tactic so popular in corner offices simply doesn't have any meaning. When you get in trouble in government, you can't merge with another state to change your bottom line, and you can't sell off a county or fire its citizens because they aren't performing the way you'd like.

This is not to say that success in government is impossible for a CEO. A couple come to mind who've worked out: Michael Bloomberg and Mitt Romney. However, both of them have been successful, not by acting like CEOs, but by working with multiple constituencies. Romney, for example, worked with a Democratic legislature to create the Massachusetts health care system that's the prototype for "Obama-care."

It's nearly impossible to find CEOs who did well in high office by trying to cram the square peg of their CEO skills into the round hole of government. For example, the co-presidency of Dick Cheney and George W. Bush was characterized by the kind of arrogance that would barely have raised an eyebrow in the corporate world. The results -- two useless wars, a broken economy, and the worst terrorist attack in U.S. history -- were probably a foregone conclusion.

Here in my home state of New Hampshire, we saw another example, albeit one that didn't completely screw up the state. Craig Benson, the former CEO of Cabletron, ran for governor and won. He immediately showed he was a typical CEO horse's ass by getting a giant "VETO" stamp to reject the state budget.

Benson's ran his administration like he ran Cabletron, so it surprised nobody when scandals started popping up, like awarding no-bid contracts to former Cabletron employees. He made himself so universally reviled that he lost the next election, which was only the second time in 78 years that an incumbent New Hampshire governor was denied a second term. True to his CEO jackassiness, Benson left his election night party without giving the traditional speech thanking his staff and supporters for their help.

(BTW, I've interviewed Benson in person and he truly is a jackass. The guy spent 10 minutes explaining why Cabletron's problems were the fault of everybody else but him. Made me want to puke.)

Considering the Bush, Cheney and Benson debacles, it's amazing that ANYBODY thinks the current crop of CEO candidates will be anything but disasters, if actually elected.

Take Carly Fiorina. She's running for the U.S. senate in California, even though her tenure at Hewlett-Packard was pretty much a disaster, characterized primarily by her endless attempts at self-promotion. She completely bought into the CEO as rock star agenda and alienated nearly everyone in the company who actually had talent.

Meg Whitman, who's running for California governor, isn't much better. While eBay is undeniably successful, it's very much a one-trick-pony that became wildly successful primarily because it was the first entry in a rapidly developing market.

Since then, EBay failed to break into other markets, mostly because of Whitman's ineptitude. As Sales Machine reader Kasper Retvig pointed out:

Meg Whitman bought Skype for what eventually became $3.1 billion without actually aquiring the technology behind Skype's service. They ended up taking a writedown of $1.4 billion dollars and then selling Skype back to the original founders and their investors.
Hard to imagine how that particular skill set is going to be useful in fixing what's probably the most dysfunctional state in the Union.

Yet another ominous example, when it comes to CEO candidates, is former World Wrestling Entertainment CEO Linda McMahon who's running for the U.S. Senate seat in Connecticut. Like most CEOs, McMahon seems unable to utter anything but platitudes. While that might appeal to an electorate that can't distinguish reality from Reality TV, it's utterly insane than anyone would think that her experience managing steroid-stoned entertainers would make her an effective legislator.

Rick Scott, who's running for governor of Florida, is another prime example of somebody who shouldn't even be THINKING of running for high office. After all, the guy was thrown out of his CEO job right in the middle of the nation's biggest health care fraud scandal, which eventually resulted in $1.7 billion in fines and civil claims.

But the worst insanity is Carl Paladino who is running for governor of New York. He's clearly the kind of CEO who thinks he's a comedian because his underlings have to laugh at his "jokes." Paladino's "funny" emails to his underlings have included:

  • A video of dancing African tribesmen under the title "Obama Inauguration Rehearsal",
  • An altered image of the Obamas dressed as a pimp and a prostitute,
  • An image of a group of panicked men titled "Run, N***ers, Run!"
  • A video portraying a woman engaged in copulation with a horse.
Anyone who's been in business for a while runs into this kind of racist jackass. Usually they end up on the wrong end of a sexual harassment suit.

While this year's crop of CEO candidates are particularly ripe, it completely astounds me that anybody thinks that ANY CEO would make a good public servant simply because he or she has run a company. It's a completely different job. Seriously, being a cast member of the B-horror flick Predator is probably a better indicator of whether you'll be successful as an elected official than having been a CEO.

Of course, there is a fascist strain in American politics that seems to want a strongman (or strongwoman) in office -- as long as its somebody they'd like to share a beer with. If so, the electorate will simply get what it deserves, a public "servant" who is utterly clueless when it comes to getting things done in a modern republic.

READERS: Happy to argue this one in the comments, of course.

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