Management Lessons From Barack Obama

It has been a 20 months since our young President, Barack Obama was sworn into office. The election in November, 2008 and the inauguration in January of 2009 were heady times. The themes were hope and change for the future supremely marketed by Obama’s election team and eagerly accepted by a populace who had just gone through a global financial collapse and was growing weary from two lengthy wars.

But 20 months after that historic inaugural that same populace is now both disenfranchised with the promised hope and change and polarized along almost every major issue facing the country. In addition, the economy continues to crawl along the bottom of the recession curve with a tenaciously high unemployment rate. What happened? More importantly, are there lessons to be learned here that business leaders would be wise to heed? Let’s take a look.

Barack Obama took over his role as President when the country was in the middle of both an economic and in some ways a political crisis. In business parlance Obama was elected to execute a turnaround strategy for a country (think company) that was facing a crisis of confidence in itself and its institutions. Like many turnaround scenarios he also took over a country that was bleeding red ink. As is often the case the events leading up to this point were the result of years (in this case decade’s) of avoidance style leadership decisions and the use of unsustainable business models to produce artificially positive results (i.e. low interest rates and subprime mortgages).

So let’s take a closer look at some key areas that challenged Barack Obama and see if we can learn some lessons:

• Set Expectations – President Obama was elected in a wave of euphoria and ultra high expectations. The mass media trumpeted this heavily both during and especially after the election. Obama bolstered this by making several sweeping promises such as “No bill will be voted on until it is posted on the internet for all to read for 5 days.” The unfortunate result of this was that the populace was convinced of such high expectations that it became physically impossible for Obama to meet them.

If it took years (or decades) to lead a country (or company) into the need for a turnaround it will not take you a few quarters to fix it. Be realistic with yourself and your stakeholder’s right from the start. You will need their understanding and support to be successful. Ever hire a contractor to do a 3 day remodeling job and 3 weeks later he is still not done? And he has an updated quote for the “unforeseen” additional costs!

• Initially Focus Only On The Highest Priorities – It is obvious that Obama felt very strongly about issues like healthcare and financial reform. However, when you are leading a turnaround your first priority has to be stabilizing the country (or company) financially and operationally to guarantee its survival. Everything else is a lower priority. Even if you try and accomplish these in parallel with lower priority items you dilute focus and increase the risk of failure. The result has been with minimal GDP growth and 9.7% unemployment President Obama has received little credit for healthcare and finance reform and lots of criticism for the lingering economic malaise.

If you tell your board that you are progressing well with that hot new product you really believe in and file for Chapter 11 six months later how satisfied are they going to be?

• Don’t make Enemies Unnecessarily – Turnarounds are hard. You very often have to make very difficult and unpopular decisions particularly if you are trying to alter the behavior of an ingrained culture. However, you will need support (even begrudging support) from most of the key players in your country (or company), especially at the beginning. Nancy Pelosi carrying that huge gavel down the street to the healthcare reform vote was both childish and unnecessary. The fact that Barack Obama let her do it guaranteed a permanent partisan divide. What were the positive outcomes here?

Be firm but gracious as a turnaround leader. This is not easy for anyone. The most successful leaders are respected and followed by everyone, even those with differing views.

• Never Blame Your Predecessor – We all know why you are here. If your predecessor was successful we would not be standing here listening to you. Every time you blame your predecessor for our present predicament you erode your power and our confidence in you. There are no exceptions to this rule that I know of.

• Wisdom vs. Intelligence – President Obama is obviously a very intelligent man. During good times intelligence is a highly valuable trait to help a country (or company) capitalize on its resources. However, during times of challenge or stress (or a turnaround) there is another more critical trait; wisdom. Wisdom is intelligence acquired by years of actual hands on experience. Wisdom is what Captain Chesley Sullenberger used to land US Airways flight 1549 safely in the Hudson River.

Wisdom is having the knowledge of when to build a team of advisors with the experience you lack, and listening to them. This is known as “hiring to your weakness”, and is utilized by almost all successful leaders, especially newer ones. Having wisdom is knowing how to avoid the first four bullets in this article.

The above is not meant to be a partisan criticism of President Obama. I chose him because the President is such a highly visible subject. The struggles that President Obama wrestles with are the same faced by business leaders across the country, especially during challenging times like this. If President Obama had it to do over again I am sure that he would do many things differently. He is hopefully learning many lessons and most of them the hard way which is how they make the most long term impact. If he is open to learning then he is on his way to becoming wise which is the most valuable leadership trait of all in times of high stress. Just ask the passengers of US Air flight 1549.