Friday, April 07, 2006


By William Fisher

There is a consensus among CEOs and business school professors that there are just short of a dozen indispensable characteristics that are essential for an effective chief executive. Since the current chief executive of America Inc. is the first to hold a Masters degree in Business Administration, how does George W. Bush stack up?

What are these basic tenets? And how's our president doing?

1. Have a coherent vision for your organization's future.

When he ran for President in 2000, the cornerstones of George W. Bush's vision for America were a more competitive but more compassionate market economy, more "ownership" of more things by more people, a better-educated, healthier, more self-reliant and more ethical population that believed in the power of religious faith and acted accordingly, all working together under a smaller, more fiscally responsible government dedicated to maintaining a leadership role in the world. By example, America would continue to be the light at the end of the tunnel for the oppressed, the punished, the persecuted.

It was not until after the attacks of 9/11 that we heard anything about the president's mission to "spread democracy" throughout the world.

GWB promised to be a "uniter". Yet today, six years on, the U.S. is more sharply divided about more things than at any time since our post-Civil War history.

As globalization has changed patterns of production and consumption, we are less, not more, competitive on the world stage. It may be only natural for business to outsource jobs that can be performed more cost-effectively elsewhere, but our economy has been unable to replace the jobs it has lost with higher-skilled and better-paying ones. A substantial proportion of our higher-skilled workers - engineers, scientists, information technologists -- come from other countries as visitors or immigrants. The President's "No Child Left Behind" initiative was a positive start, but it has been woefully under-funded. Every international test shows us lagging far behind other industrialized countries in the skills we need to fill the jobs of the future - principally science and mathematics. More than 40 million people are without health care, millions of others continue to live below the poverty line, and the gap between "haves" and "have-nots" has become a chasm.

The terrorist attacks of 9/11 presented the president with a second golden opportunity to unite us. That dreadful day gave him the unquestioning support of virtually every American, and most of the world's other peoples. If he had then called the leaders of both political parties to the cabinet office, there are no tools within reason they would not gladly have given him.

That turned out to be irrelevant. After all, doesn't an "imperial presidency" have the "inherent Constitutional authority" to craft its own tools, like the NSA domestic surveillance program? And order the then attorney general, John Ashcroft, to round up every "middle Eastern-looking" person he could find (notwithstanding that many of them were South Asians, including Sikhs from India) and throw them into jail without charges or lawyers (many were deported, but not a single person was convicted of any terror-related crime).

The world was totally with the president when the U.S. declared its Global War on Terrorism, retaliated against the source of the 9/11 attacks, and toppled the Taliban in Afghanistan.

Our country seemed to be making a good start in Afghanistan. But then, for reasons that continue to remain murky - "I am the president, see? And I do not have to explain myself to anyone", as he told Bob Woodward -- the president took a sharp left turn into Iraq on the basis of intelligence he knew to be suspect, never told us it might be suspect, and kept reinventing our reasons for that invasion.

Was it the image of the mushroom cloud? Or the yellowcake from Niger? Or the aluminum tubes? Or the defeat of Iraq's terrorists? Or was it to use Iraq as the first stop on the road to spreading democracy everywhere?

Whatever the reason (and we may never know), weeks after the "Mission Accomplished" appearance on the aircraft carrier, the president embarked on what he said he would never have any part of: "nation-building".

Now, there are two problems with nation-building. First, most development authorities don't believe it can be done - certainly not from the outside-in at the point of a rifle. Secondly, the president's nation-building project was carried out with unbelievable inefficiency.

His proconsul, Jerry Bremer, knew little about Iraq, was culturally tone-deaf, grew a vast, confusing and confused bureaucracy, but had no more of a plan than did the military for dealing with post-Saddam Iraq.

The coalition of the willing had too few troops. They bypassed the most effective units of the Iraqi army in their rush to Baghdad and sent the rest home with their weapons. What has happened since then is history. The soldiers we bypassed - the Saddam Fedayeen -- became the core of what we now call "the insurgency".

So we toppled a despicable despot but, in the process, created the very terrorist haven the president said he was determined to eliminate. Doing that has cost us billions of dollars, thousands of lost lives, and the rupture of our hard-won relationships with most of our friends and allies.

And, as for the U.S. remaining the world's "beacon of light", respect for our country has never been lower.

The president's "vision" of bringing democracy to the world has been called Wilsonian. But Woodrow Wilson was thinking of the League of Nations, not preemptive war.

2. Hire people who may be smarter than you are, and include them in crafting strategies and action plans to implement a collectively determined vision.

President Bush has surrounded himself largely with cronies -- old, trusted friends, from his days as governor of Texas, like Karl Rove, Condoleeza Rice and Karen Hughes, and others from the generation of his father, like Dick Cheney and Donald Rumsfeld. Many may well be smarter than he is. But he is famous for his loyalty to those around him, even to the point of defending the indefensible. Like conferring the Medal of Freedom on George Tenet, whose CIA provided the flawed intelligence that presaged the invasion of Iraq.

Until recently, their major talents have been far more political than substantive. Like Mr. Rove famously telling his Republican troops that 9/11 would provide a fail-proof platform for reelection in 2004.

And as for crafting strategies and action plans - managing the nuts and bolts of governance - there is persuasive evidence that we now have one of the most inefficient and poorly managed government bureaucracies in the nation's history. Just to cite two examples: the Katrina debacle and the near-unanimous failing report card on homeland security recently issued by members of the former September 11th Commission.

3. Listen to a lot of people who may not agree with your vision.

There is much to commend a man of genuine conviction and high principle, but White House insiders say President Bush has managed to win the trifecta of poor governance: ill-informed, opinionated and stubborn. There is little evidence that he welcomes views that aren't his own or those of his tiny coterie of advisors inside the echo chamber.

For example, he used all the power of the presidency to resist the formation of the 9/11 Commission (only to warmly embrace it when it became inevitable). He opposed the creation of the Department of Homeland Security (only to warmly embrace it when it became inevitable). He fought the reorganization of the intelligence community in 2005 (only to warmly embrace it when it became inevitable). He allowed superkawks like the vice-president and secretary of defense to dominate the Iraq discussions and emasculate the National Security Council, many of whose staffers expressed serious doubts about the wisdom of the invasion. He rejected the informed planning done by the State Department about what to do after "Mission Accomplished" in Iraq. He sent Colin Powell to the United Nations to shill his incomplete and super-hyped Iraq WMD case, and ignored Powell's "You break it, you own it" Pottery Barn admonition.

As president, Mr. Bush has instant access to any of the worlds most experienced and knowledgeable experts in virtually any field, but there is no publicly known evidence that he has availed himself of their advice. Or listened to "outsiders", except when they happen to agree with him.

4. Understand who your stakeholders are, pay attention to their views, and let them know how you're doing.

As CEO of America Inc., the president's stakeholders are not only all Americans but all the world's countries and important institutions.

At home, our born-again president has acted as though only half of us had a stake in the future of our country - his Republican base, and especially the so-called "social conservatives" whom he regards as so vitally important to his success. It was precisely this view that brought us the Terry Schiavo debacle, the nomination and un-nomination of Harriett Myers to sit on the Supreme Court, the president's endorsement of a Constitutional amendment to ban gay marriage, his endorsement of "intelligent design", his insistence on an "abstinence only" policy in the treatment of HIV-AIDS that cripples the effectiveness of our efforts, and the controversy that just won't go away - Roe v. Wade.

Abroad, he has failed to consult, much less listen to, most of our oldest friends and allies, much less those who have never been our friends - unless, of course, they have agreed to become our partners in the war on terror, in which case they get a free pass for their shortcomings. The countries with which we partnered to win World War Two and found the United Nations were derisively dismissed as "old Europe".

Why are countries abroad stakeholders in America Inc.? Well, for one thing, they buy the bonds that keep us operating in the face of the largest budget deficits in the history of the country. Secondly, they buy our products (though these days we buy a lot more of theirs). Thirdly, merely because of who we are, whatever happens to and in the U.S. impacts lots of other countries. Finally, globalization has made it virtually impossible for any single nation - even the world's lone remaining superpower - to achieve much unilaterally.

Meanwhile, what partners we have left are partners in the Global War on Terror. And they include some of the world's most stalwart bastions of democracy, like Egypt, Saudi Arabia, and Sudan.

And, as for letting your stakeholders know how you're doing, I suspect that one of the attributes for which history will long remember this Bush administration is its paranoid secrecy. There has never been a time in American history - not even in wartime - when so much government information has been classified. And as stakeholders, we are left to foot the bill - in the hundreds of millions - for all the folks who do the classifying.

The State of the Union message, in modern history the equivalent of the CEO's Annual Report message, has become a grotesquely choreographed "State of the Spin" extravaganza, complete with "guest stars" sitting beside the First Lady in the gallery. Instead of a thoughtful, sober and honest allocution of where we've been and where we're going, it has become a Chinese menu of un-defined or ill-defined or downright distorted one-liners describing the CEO's reputed achievements during the year, combined with a litany of vague promises about what the boss is going to do for America and the world in the year ahead.

The big problem with our stakeholder relations effort is that our stakeholders don't believe us. The reason is that they no longer have to depend solely on the White House for their information. In many parts of the developing world, there are almost as many satellite dishes as there are people. The Internet is growing exponentially. And even in the authoritarian states that claim to be our allies in the war against terror, the state controlled media does not treat the U.S. fondly.

They know all about Abu Ghraib, Bagram, Guantanamo Bay. They know about "extreme renditions". They know about the CIA's secret airline that kidnaps people and sends them off to black hole prisons in Eastern Europe, the Middle East and North Africa. They don't believe the president when he tells the world that "America doesn't torture". Or that "There are no wiretaps without warrants". And they know how vital our president thinks elections are - providing they result in outcomes favorable to us.

Presumably the president took some marketing courses during his MBA days, and knows that flawed products can't be sold for very long. But that's precisely what he's asked his old Texas crony, Karen Hughes, to do in her new role as America's public diplomacy maven. Only unwavering fealty can explain why Ambassador Hughes took this job on. Because it is simply un-doable.

Everywhere she travels, she finds herself facing skeptical, even hostile, audiences who let her know in no uncertain terms that American policy is unacceptable.

The reaction to Ms. Hughes overseas is to want to shoot the messenger. But the messenger is not the problem. The problem is the message. And it's the message of our MBA president.

So much for stakeholder relations.

5. Understand your competitors and the environments in which you and they operate.

Does America Inc. have "competitors"? It has a ton of them. Those that would replace our products and services - and the people who make or deliver them - with their own. Those that would undermine our values by unlawful or unethical behavior. Those that would like to see us destroyed. Authoritarian regimes that oppress their people. Others that represent potential threats.

How is the president of the world's lone surviving superpower supposed to deal with all of that? No one ever said it was going to be easy, but George W. Bush wasn't forced into being president. We (with a little help from the Supreme Court) gave him the job, and dealing with competitors goes with the territory.

The president has done well in recognizing that commercial competition has always existed among nations - it would be unthinkable for an MBA not to. But he has not done nearly as well in helping us prepare to be better, smarter competitors.

Second, credit the president with understanding that the Enrons of the world are part of the bad guys. But does he understand that corporate corruption represents a real and present danger to our very way of life -- that it may be just as threatening, albeit less bloody, as the Wahabis?

Third, is the president really convinced that a big part of being competitive on a world stage lies in building constructive partnerships with people and institutions dedicated to bringing about peaceful change?

There are some things that simply can't be solved by the projection of American power. Competition is one of them.

6. Give your strategists lots of latitude to do their planning, but subject them to frequent reality checks.

Almost no one truly qualified to take on a top policy job - whether in the private sector or in government - wants his boss playing micro-manager. Professional CEOs pride themselves on being able to recognize and hire top people, matching those people with the job at hand, and then delegating to them whatever authority they need to get the job done right.

But that's not the same as hiring someone and then forgetting about him or her. The president has an obligation to frequently ask senior officials - even at Cabinet level - what and how they're doing on major projects. And their responses can't be one-liners. They need to be detailed. Nor can they just be "good news" briefings. Top people need to feel free to tell the boss things he may not want to hear.

No one wants to hear bad news. But an effective CEO strives to create an environment in which reality reigns - whether it's good news or otherwise. From all we know about this White House, the president's most senior advisors go to great lengths to shield the boss from the bad news. And that's an environment that doesn't just happen; someone creates it.

7. Establish benchmarks to measure progress.

Ronald Reagan famously said of his nuclear relations with the Soviet Union, "Trust but verify"-not a bad phrase, by the way, to be etched into the facades of every government building in Washington. Verification is not rocket science. But it demands that top officials be required to develop sound, realistic benchmarks for tracking the progress of every major project - what's going to be accomplished, over what timeframe, by whom and at what cost.

What's tricky about benchmarks, however, is that you can waste a lot of time measuring the wrong things. The Pentagon invested millions into planning for the day Saddam's statue came down. There was no plan - hence, no benchmarks - for what happened the day after.

The president trusted but forgot to verify.

8. Develop alternative realistic scenarios. Always have a Plan B, C, or D, because every major policy initiative is likely to have "unintended consequences".

For people who work in think-tanks or in corporate planning, playing "what if?" games is as natural as the sunrise. They'll tell you it's part of the fun. Well, the sad truth is that a lot of people in the Bush Administration don't think it's fun and don't think it's necessary.

Maybe it's the intellectual arrogance that comes from living in the bubble. It's easy to feel omnipotent when you're in power. But it's also intellectually corrupt. And ultimately self-destructive.

The nation is now paying a very high price for that intellectual corruption - in lives and treasure lost in Iraq.

But it applies to virtually every other issue the White House deals with. Were "what if" scenarios built regarding the president's plans for social security, or his guest worker program, or energy independence, or Supreme Court nominations, or relationships with the Congress, or the Palestinian elections, and on and on?

Having worked in government, I'm pretty sure someone was doing a lot of "what if" work. But I'm also pretty sure no one in the White House and few in Congress were listening.

9. Be willing to admit and correct errors, even if this means altering the vision.

At one of his news conferences last year, the president was asked if he could think of a mistake he'd made. He put on his deer-in-the-headlights look, appeared to be thinking, and then came up empty.

He couldn't think of any mistakes he'd made.

Others, including many from his own party, have a different view. They point to plenty of mistakes - from Iraq to Harriett Myers to Social Security to the Medicare prescription drug plan to desecration of the environment to reneging on treaties to inequitable treatment of foreign countries.

But it seems not to be in this president's nature to fess up. Somehow, admitting a mistake equates with weakness.

Yet many of both the president's friends as well as his foes believe that his credibility has been held hostage to his stubbornness. GWB could do worse than to remember how John F. Kennedy dealt with the Bay of Pigs disaster: He went on television, admitted his error, and moved on - with the increased respect of the nation and the world.

10. Maintain the integrity of the organization and its goals through sound internal accounting and ethical guidelines.

I have no doubt that the Bush Administration's budget folks are every bit as creative as Enron's. The Medicare prescription drug plan provides a good example. The White House told Congress the project would cost $395 billion. Once the arm-twisting was done and the bill passed and signed, the president's budget mavens revised the cost upward to $552 billion - surely a fact they knew from the get-go.

This wasn't a case of shoddy accounting. It was a case of unethically manipulating the numbers. In the corporate world, it's called cooking the books.

For shoddy accounting, look to Iraq. Even by the estimates provided by the administration's own Special Inspector General, hundreds of millions of dollars appropriated by Congress has simply gone missing. Or look to the Pentagon, where government accountants have for years been unable to complete an audit because financial systems are in total disarray and because financial mismanagement, waste, fraud and abuse are so ubiquitous.

There's an 11th attribute I would add to these basic CEO requirements -- to inspire.

Why do we hold onto some stocks we've bought although they haven't taken off yet? We generally do so because we believe that the company has the potential its top guy or gal tells us it has. We believe. Which means the CEO has the credibility to inspire us.

President Bush has, at best, inspired only half his stakeholders - and the number continues to dwindle as we speak. And lots of these conservatives no longer see the president as a conservative because, on his watch, the government and its deficit spending have become larger than at any time in the country's history. That breaks the two cardinal rules of conservatism.

The president has had far more opportunities than most of his predecessors to turn his fortunes around. He could have inspired all of us, most notably, after the 9/11 attacks. Yet he squandered that extraordinary measure of patriotic support by asking no sacrifice of any of us - though almost all of us would gladly have given him anything he needed. He told us not to worry, go to the mall, live life as usual. Then he cut the taxes of the wealthiest people in the country.

And that, I'm afraid, will be the legacy of our first MBA president. Unless things change radically and fast, he will leave office with an America weaker than it was before 9/11, and occupying the unique position of the largest debtor nation in the history of the world.

Think of some of the great business names of our time: Jack Welch of General Electric, Bill Gates of Microsoft, Andy Grove of Intel, Sam Walton of Walmart, Meg Whitman of Ebay. All of these CEOs faced huge problems during their tenures. Just as George W. Bush did when he ran Harkin Oil. But none of them, when faced with strategies that weren't working, urged their stakeholders to "stay the course". They adjusted - sometimes scrapped - failing strategies and developed better ones. And they always leveled with their stakeholders.

I don't know how many of these men and women earned MBA degrees. But I continue to wonder how our president ever made it through Harvard.

No comments:

Post a Comment