Choosing The Right Manager For The Biggest Business On EarthNovember 5th, 2012 12:13 am Howard Hill
On Tuesday we’re going to give a manager a new four-year contract to manage the U.S. Government. It’s a big job. The manager we choose will be running the biggest business on earth.
Mitt Romney thinks he’s qualified. In fact, he thinks he’s the only candidate who has actually managed a business and the only one with a track record of success.
As the Republicans are so fond of saying, Barack Obama “never even ran a lemonade stand.”
But what voters need to examine is an apples-to-apples comparison, showing how both candidates ran the same kind of business and how successful they were.
Luckily, we can. The business in question is a national pPresidential campaign. Romney and Obama both ran one in 2008, and each of them is running one now.
Let’s go back to 2008 and look at how Obama did running his first presidential campaign. Compared to his two main adversaries (and to Romney’s early failure), the results were spectacular.
Obama’s campaign was larger and more complex than most Fortune 100 companies by measures such as staff size and locations. His use of the Internet demonstrated an innovative approach to campaigning that paved the way for Romney’s current pop-ups.
The Obama campaign built up steam with a devoted base and never ran a deficit, while the Clinton and McCain campaigns ran into serious financial difficulty. This despite the fact that McCain was starting with a fortune behind him and the Clintons had done it before.
Obama’s 2008 presidential campaign was a business with a million and a half “employees” (active volunteers) and a billion dollars in revenue. Even more impressive, the business grew to that size in about a year. More experienced competitors who began with 10 times as much startup capital didn’t do nearly as well.
This year, the Romney campaign spent more money than Obama through the August reporting period. Yet they managed to open only a fraction as many field offices, all while having fewer than half the number of “employees” (volunteers working for the campaign). Fewer offices plus fewer employees means lower expenses in most businesses, but not when Romney’s in charge.
Arguably, Romney took a different strategic approach in the business of managing his campaign. He focused more resources on advertising and on “outsourcing” his on-the-ground efforts.
Was the strategy successful? Not with Romney’s nearsighted vision for the future.
His ads that imply American workers at Ohio’s Jeep plants will lose their jobs to China have backfired so spectacularly that the CEOs of two car companies felt they had to publicly take the Romney campaign to the woodshed for lying.
Romney knows a lot about “outsourcing,” but outsourcing voter registration drives to an accused fraudster in multiple states was a serious failure in business judgment. That supplier had to be fired, and the Romney campaign had no second source for that essential function. In Romney’s business circles, that’s known as “single-point failure” and managers are supposed to have a risk-management plan in place to avoid it.