Saturday, November 16, 2013

Presidents Are Not CEOs: In Politics Deception Is Worse Than Failure

Imagine you are a CEO of a company about to launch a major new product. Your strategic vision for the future of the company includes and depends on the success of the new offering.

The new product will help turnaround a couple of major money losing divisions, while also increasing the company's market share. The product has the potential to generate a tremendous amount of goodwill for the firm and allow it to penetrate other markets where it is currently finds it difficult to be a major player. As a large publicly traded enterprise, the corporation's brand name, future customer loyalty, revenue, profit, stock price, and your compensation and tenure at the firm depend on the success of the new item.

If the product fails, the repercussions will have a long-lasting impact on the company, on your future career and on the careers of those associated with the product's development and implementation. Internally the product is so closely associated with you that it is nicknamed with a variant of your name. What do you do during the development and implementation of the product? Do you ask for regular reports on the status? Do you ask if timelines are met? Do you ask if the product is tested? Do you ask about quality? Do you ask about initial production volumes? Do you ask if costs can be kept under control or if the final sales price will be as planned? Do you ask if suppliers are on board? Do you try it out on a few focus groups? Do you monitor how a few test subjects actually use the product? Do you ask for test customer feedback?

As CEO, you would be concerned about all of the above and more. You would assign people you trust; people who can implement; people who will keep you inform on a regular basis of the product's development and implementation status. All you need is yes or no answers to your questions, but you do ask the questions!

Suppose there are setbacks along the way and development is more bumpy and slower than planned. Test groups find the product is more difficult and less obvious to use than you envisioned. Costs are more than you hoped. Despite these few setbacks, you and others you trust still believe in the product's potential to achieve your vision. What as CEO do you do? You could add more people to the project. You could change the people involved. You could bring in special troubleshooters. You could ask for recommendations from your staff about getting the product back on track.

Clearly much of what a good CEO would do in a good corporate culture at a successful corporation was not done with Obamacare by the President, by his most trusted staff, or by the staff assigned to the healthcare project.

Governments Are Not Corporations

Governments are not corporations and presidents are not CEOs. We occasionally project a corporate structure with a CEO onto the US government and the President and his staff, but that is an inexact analogy. The president is elected. His staff is appointed. His success is measured by a numerical count of votes and not by profit, revenue or share price.

The rough start to Obamacare may impact the public's appetite for future large government programs. Obama's and the Democratic party's future credibility may be at stake for making statements about the law that do not seem to be the most honest. Obama's election and reelection to the presidency was never dependent on people's perception of him as an implementer or CEO.

There are many problems with the design of the new healthcare law at a fundamental structure and economic level that have a good chance to make the law unworkable. If the law is repealed or modified so much that it no longer resembles the initial strategic vision of the law, the public's perception of Obama and the Democratic party will change. The public never thought of Obama as a CEO. The poor implementation and the roll-out problems will not negatively impact the public's long-term perception of him. The public discovery of repeated misstatements will negatively impact Obama and the Democratic party. The public's belief that Obama and the Democratic party engaged in willful deception will negatively impact the Democratic party and Obama's image for a long time. A president the public trusts is much more important that a president that can act as a CEO.

The major shortcomings of Obamacare are not the poor roll-out or the poorly functioning website. The major shortcomings of Obamacare are that the law made the people believe they were deceived by the President and the Democratic party.

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