THE HIGH PRICE OF CHOOSING WRONG

 byLorraine Bolger.
 Published: 11/11/2016

Every four years, Americans go to the polls to choose their President & Commander in Chief. Essentially POTUS as the secret service call the President (as opposed to FLOTUS for the First Lady) is America’s CEO, the most powerful human in the world and someone who can basically change the course of history – even more when there is a compliant Congress in place as there will be for President-Elect Trump.

In our professional environment, we don’t get into expressing political preferences. That is a matter for personal expression. However, considering the awesome political, economic and military power a US President can exercise, it would seem sensible to expect that a degree of care was brought to bear in the process of deciding who gets the job. This is as much the case in politics as it is in business.

Research published this week by consultants Spencer Stuart looked at the consequences of picking the wrong CEO and made some suggestions on how the process could be improved. According to Harvard Business School, 40% of executives who change jobs or get promoted fail in the first 18 months, a number that has remained steady for the past 15 years. With the economic cost of appointing the wrong top leader at global companies estimated at more than $100 billion by PwC, this is something you would think boards have a big incentive to do better.

Spencer Stuart make some practical suggestions to improve a CEO selection process that sets organisations up for failure, including making sure the right people are involved in the selection – not including the outgoing CEO. Manchester United would surely agree with this conclusion given the mess they made of Alex Ferguson’s succession – in which Ferguson himself played a key role. Other findings by Spencer Stuart are that the board may not be equipped to evaluate CEO candidates and need to draw more on experts with a history of executive assessment, that the criteria for the new CEO often doesn’t align with the organisation’s strategic goals and that the selection process is often overly long thereby undermining its effectiveness.

Applying these lessons to the presidential selection, perhaps the democratic establishment was too involved in picking Hilary as candidate as opposed to a fresher voice like Elizabeth Warren? It’s certainly the case that VP Joe Biden, who may have done better than Hilary among the crucial white working class vote in swing states like Pennsylvania and Michigan, was probably ruled out too early.

Hilary was the “most qualified candidate ever” to be US President according to Obama, whereas Trump was the least – the only President not to have previously worked in public service or the military. However, the electorate was clearly looking for change and not experience – so the criteria that the selection committee saw as key were not shared by the people making the decision.

The so-called ‘permanent campaign’ is now a central feature of US politics; as soon as one election cycle ends another begins. Presidential campaigns are now way too long, cost too much and ultimately produce more heat than light. A shorter, sharper process might connect better with the voters and achieve a better outcome, but there is no appetite on any side of the political divide to change this, so we are stuck with the permanent campaign.

What is often not appreciated is how narrow is the ground upon which US presidential elections are fought. Most states don’t switch from Blue to Red over time, so elections are won or lost on small shifts in the so-called swing states of the North and Mid-Western rustbelt. The white working class voters in these states supported Obama and were crucial to his path to victory in both ’08 and ’12, but they switched to Trump this time around; on both occasions, what they were looking for in their candidate was change, something Obama delivered in the past and Trump offered now. Hilary by contrast represented the status quo they were in open revolt against.

These so-called ‘low information’ voters who don’t pay much attention to the minutiae of politics may not be equipped to evaluate candidates in the eyes of the liberal elite, much of the media or western governments who are appalled at the choice they have made to elect Trump. However, unlike the corporate world, the option of changing the decision makers is not available in a democracy – try as they might the people who look down on those who voted Trump can’t abolish them!

The many who feel America has made the wrong choice would instead be much better off figuring out how a better choice can be made in 2020 and comfort themselves with the fact that, much like CEOs, nearly all political careers end in failure.