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There's a lot being made of how Mitt Romney, as a former, successful, CEO, will be better able to manage the economy of the USA. We'll come back to why his system for being a successful CEO doesn't look to me like it applies to a nation later, but I think we actually need to look at the role of the CEO and how that role works in a management structure.
While a CEO has a management team, and people working for them, at the end of the day, one of the challenges with the role is the buck REALLY does stop there. But, typically, that's not a problem for the average CEO. The management team will, on the whole, do as they're told, or get out. Even if the CEO wants to do something outrageously daft, there's usually only one time a year for accountability, at the AGM, generally speaking, unless something has gone horribly wrong in their planning, the board will typically go along with what is agreed.
Contrast this with the role of President of the United States. Unlike the role of Prime Minister in the British System, at least one with a majority of MPs and a good whip, what he says doesn't actually go. And I'm not entirely sure how a CEO, especially one who has spent a career doing what Romney has done, more later, will deal with people whom he can't sack for saying no, react?
At the end of the day, if I, or any other CEO hits a problem with a staff member or members refusing to do what I believe needs to be done, I can get rid of them. That's it. Bye. Best of luck with the Senate and Congress. He's been a 1 term governor, but as I read that, he hit this problem in MA and didn't deal with it all that well either. How that will play out with a bitterly divided Congress and Senate (note: even if the Republicans take both, I'm pretty sure it will still be pretty divided...)
But wait, there's more. Mr Romney hasn't really had the traditional CEO role. He specialized in buying up companies that were 'in trouble' (this isn't always true btw...) and then doing the following magic system for making absolutely shit tonnes of money.
STEP 1: Find a company with the right capital profile - ideally - plant or physical assets, a decent customer base and probably too many people, if they're not profitable, then make sure they're not far off
STEP 2: Borrow some money to buy it, usually in a forced way
STEP 3: Install your own management team
STEP 4: Pay your management team an absolutely insane amount, and pay your company who did the buy out, even more insane amounts in management fees
STEP 5: Cut costs, cut, cut, cut, cut. Lay off people. Sack expensive staff members, especially managers and bring in new, cheaper ones (except at the management consultant level). Reduce maintenance costs etc...
STEP 6: Borrow money, sell assets and replace them with leased ones (short term it's more efficient for the bottom line)
STEP 7: When you've extracted your initial loan, the one you took to buy the business and made a profit, sell what's left of the company... usually a hollowed out chunk of debt
STEP 8: Rinse repeat
I'm not entirely sure how this translates into anything remotely sensible for running a country where people will fight every inch of Step 5, you politically can't do 6 and there isn't a mechanism for step 7.
If he does win, he's really screwed.
While a CEO has a management team, and people working for them, at the end of the day, one of the challenges with the role is the buck REALLY does stop there. But, typically, that's not a problem for the average CEO. The management team will, on the whole, do as they're told, or get out. Even if the CEO wants to do something outrageously daft, there's usually only one time a year for accountability, at the AGM, generally speaking, unless something has gone horribly wrong in their planning, the board will typically go along with what is agreed.
Contrast this with the role of President of the United States. Unlike the role of Prime Minister in the British System, at least one with a majority of MPs and a good whip, what he says doesn't actually go. And I'm not entirely sure how a CEO, especially one who has spent a career doing what Romney has done, more later, will deal with people whom he can't sack for saying no, react?
At the end of the day, if I, or any other CEO hits a problem with a staff member or members refusing to do what I believe needs to be done, I can get rid of them. That's it. Bye. Best of luck with the Senate and Congress. He's been a 1 term governor, but as I read that, he hit this problem in MA and didn't deal with it all that well either. How that will play out with a bitterly divided Congress and Senate (note: even if the Republicans take both, I'm pretty sure it will still be pretty divided...)
But wait, there's more. Mr Romney hasn't really had the traditional CEO role. He specialized in buying up companies that were 'in trouble' (this isn't always true btw...) and then doing the following magic system for making absolutely shit tonnes of money.
STEP 1: Find a company with the right capital profile - ideally - plant or physical assets, a decent customer base and probably too many people, if they're not profitable, then make sure they're not far off
STEP 2: Borrow some money to buy it, usually in a forced way
STEP 3: Install your own management team
STEP 4: Pay your management team an absolutely insane amount, and pay your company who did the buy out, even more insane amounts in management fees
STEP 5: Cut costs, cut, cut, cut, cut. Lay off people. Sack expensive staff members, especially managers and bring in new, cheaper ones (except at the management consultant level). Reduce maintenance costs etc...
STEP 6: Borrow money, sell assets and replace them with leased ones (short term it's more efficient for the bottom line)
STEP 7: When you've extracted your initial loan, the one you took to buy the business and made a profit, sell what's left of the company... usually a hollowed out chunk of debt
STEP 8: Rinse repeat
I'm not entirely sure how this translates into anything remotely sensible for running a country where people will fight every inch of Step 5, you politically can't do 6 and there isn't a mechanism for step 7.
If he does win, he's really screwed.
