Philadelphia lessons for the next CEO of the USA

Philadelphia lessons for the next CEO of the USA

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 Democratic Party has just nominated its candidate for a new CEO for the U.S. government—with more than two million civilian employees and one million more in uniform, the world’s largest employer.

If elected, Hillary Clinton will come to the job with considerable experience—eight years as a senator, four more as secretary of state, and a previous eight years as companion and partner to her husband, President Bill Clinton. She surely knows her way around company headquarters.

Still, as President Obama said in his convention speech, nothing can fully prepare a person for the unique pressures of the presidency. And the current mood in the country at large—including faith in the federal enterprise—seems to be at historic lows.

The corporate world, however, does offer some lessons for CEOs that come up from within a company structure and have to adjust to being in charge. The Miller Center’s First Year project commissioned an essay by McKinsey & Company, with input from a number of CEOs, to uncover these insights.

That essay and how CEO transitions may—or may not—help the next administration were the subjects of the Miller Center’s 2016 David R. Goode Conference, held July 26th in Philadelphia at the Democratic National Convention.

The discussion, moderated by Fortune editor-in-chief Alan Murray, featured veterans of the past two Democratic administrations: Robert Rubin, former treasury secretary and White House National Economic Council director in the Clinton years; and Chris Lu, director of the Obama administration transition, and a former White House cabinet secretary. The panel also included Vivian Riefberg of McKinsey and Sid Milkis of the Miller Center at the University of Virginia.

The conversation focused on the mechanics of the job as well as the most challenging difference between becoming president and becoming a CEO—the currently toxic nature of government in America.

Management lessons

The panel offered a broad consensus on a series of basic, important management priorities, common sense lessons that are easy to forget or get wrong in execution.

Start early. Chris Lu, President Obama’s transition director, said the Obama team began in April 2008. Any campaign-turned-administration will have to envision several possible futures as the summer gives way to the autumn. By the time of the transition, those possibilities will get narrower, and the early start is helpful for sorting out what is sustainable and advantageous.

Know your priorities. An incoming administration may have several priorities, but, per Bob Rubin, they should be very few and very clear. The group agreed that the next president should start with “shared-prosperity” because of deep public anxiety about globalization and technology. And there was considerable discussion about how the broad benefits of trade in the long term sit alongside the sharp pains of job loss in the near term. As Vivian Riefberg pointed out, as much displacement has come from rapid technological change as from trade, but whatever its source, there is a major public backlash.

Build a more representative system. There was also a concern that the few who benefit from the current economy are over-represented, whereas most of the public feel excluded from decision-making. Several panelists noted the perception that financial contributors to political campaigns get disproportionate input into policy decisions.

Prepare for the unexpected. As Chris Lu said, “As well as you plan, things will change." Something will undoubtedly throw you off course. That’s to be expected. It is how you respond to the crisis that will determine the success or failure of a first year.

Build a team of partners. Several panelists stressed that it is essential to combine thinkers with doers. At the same time, it is essential to pick people to understand that they need to mesh together well, and to divide responsibility between policy expertise and practical action. In contrast to creating a “team of rivals,” Bob Rubin remembered that during 1992 transition "President Clinton kept calling me back in for meetings. It was clear that he was trying to assess how well I would fit in with the team he was building.”

Another big challenge is mixing political appointees with the permanent staffs of cabinet agencies. As Riefberg pointed out, “The federal government has over two million civilian employees, yet only 4,000 political appointees, and about 400 senior confirmed appointments. Yet only half of those will be confirmed in the first eighteen months. So you will need to determine, within the agencies, which ones will try to wait you out, and which ones will get on board with a new direction."

Establish a fair, discursive, and decisive process. Panelists urged the new team to field a range of perspectives. Bob Rubin put it best: “Encourage people to tell you the truth.” Of course, there will be different perspectives on the truth. So establish a fair, open process to consider a variety of options. According to Rubin, this is a key part of the culture the president has to envision before taking office.

Communicate, communicate, communicate. Effective communication must start with the president and extend all the way down through the cabinet agencies. New digital and social media tools can connect the administration to new communities, but they bring their own challenges As Sid Milkis pointed out, “It is particularly hard to communicate when it is not clear that people listen in the same way.” Riefberg observed that CEOs of large corporations must be intensely sensitive to the tone they set. “It is sometimes hard to remember—or to internalize—that everyone is watching you, including how you communicate."


What’s different from the corporate world? Politics

Other than the massive scale and global scope of the US government, managing relations with Congress—and even with the courts—is the single greatest difference with private sector management. Riefberg noted that nothing in the private sector can simulate the “relentlessness and breadth” of the presidency.

Riefberg also observed that the president has less direct control over the federal government than CEOs do over their companies: “Remember, you’re only one of three branches." You cannot manage by authority. Members of the panel struggled to come up with a suitable private sector analogy to dealing with Congress. But there were several key tips—and some sharp points of disagreement.

Minimize unforced errors with Congress. The panel agreed that previous presidents had made unnecessary mistakes by alienating Congress early in their administrations or even during the campaigns. Rubin advised a new president to engage members of Congress and their staffs as early as possible, and Riefberg added that campaigns should at least avoid burning unnecessary bridges with Congress by what they say before the election.

Better yet, build relationship with the legislature. Riefberg commented on how she has seen personal relationships weaken in Washington. In the corporate world, she noted, it is easier to build personal relationships with peers. Milkis added that the decline of political institutions, such as parties and congressional leadership, has made it more difficult to govern. Rubin urged the next administration to place a heavy emphasis on finding people who want to work across the aisle.

Don’t underestimate the challenge. Today’s political polarization seems unprecedented. Milkis described it as a “war zone” characterized by personal attacks. Though there have been serious differences in the past, the current mood seems deeper and darker than in recent years. Democrats disagree about whether the gap is bridgeable.

Look for areas of bipartisan support. Rubin suggested the next administration begin with a list of priorities that have the potential to garner bipartisan support. Lu said infrastructure is typically an area of bipartisan agreement, but Congress can’t even find common ground on that these days. Rubin cautioned against seeking “common ground,” saying instead that both parties just need to exhibit “a willingness to compromise.”

But be prepared to act alone. Some in the party believe a first 100-day list of executive orders is essential. With the challenges of governing in such a polarized environment, they suggest, a president must sometimes act unilaterally. Several panelists and audience members pointed to President Obama’s failed budget negotiations with Speaker John Boehner as an example of how Congressional leaders have lost the ability to direct their members. Chris Lu, describing himself as “the cynic of the group,” said he would have a long list of executive actions ready to go on Day 1. Rubin countered that for the great challenges facing the nation, solutions cannot be found in executive orders.

The American people want to trust the system. Others believe that reaching across party lines is still achievable through a combination of personal relations, political will, and even political sacrifice. A president needs to decide how far he or she will go. As Milkis said, “It is now common knowledge that, no matter what people think about President Bush, that he took advantage of the personal engagement. It also is common knowledge that President Obama was less inclined in that direction."

Experiment with institutional innovations. As Milkis pointed out, Presidents Jefferson and Wilson spoke directly to Congress. Obama experimented, albeit briefly, with engaging Congress in direct public discussion and debate. He suggested the next administration consider something like Great Britain’s “Prime Minister’s Question Time,” a regular opportunity for members of Parliament to question the head of the government.

Big systemic changes come from sea-change elections. Taking a step back historically, Milkis observed that very few of the major agreements in American politics have been accomplished through bipartisan legislation.

Globalization may require a political re-set. Shared prosperity amidst sustained globalization is a bipartisan concern, but with no clear agenda that can pass through Congress, participants agreed that a new president will have to essentially start over to tackle this critical issue.

Bill Antholis is director and CEO of the Miller Center, and Jeff Chidester is the Center’s director of policy.

You can listen to the entire panel below or read a copyedited transcript here.