Billionaire CEO Howard Schultz has made clear if he runs for president he doesn’t want to embrace the status quo of a broken political system.
“We want to reimagine the system, to disrupt it. I’m an entrepreneur. I want to have a vision to see a new kind of government,” Schultz said in an interview with CNBC’s Andrew Ross Sorkin.
He is hardly the first billionaire CEO to consider a run for the White House in the hopes of changing politics and government. And he won’t be the last.
The promise of “CEO presidents” — particularly very wealthy, self-financed ones — is simple: They will get things done. They will make government more cost-effective and efficient. And they can’t be bought.
“They are seen as a white knight who comes from outside the political process, who can clean up a mess and overcome the problems of politicians,” said Darrell West, vice president and director of Governance Studies at the Brookings Institution and author of “Billionaires: Reflections of the Upper Crust.”
That romanticized notion is based on a misunderstanding — by both the public and the candidate — of government, of the constitutional limits of the presidency and the fact that the president holds not one but three jobs as head of government, head of state and commander-in-chief, said presidential historian Tim Naftali of New York University.
Certainly some CEO traits and experiences could be assets for any occupant of the Oval Office. But some create challenges or become liabilities.
Leading and managing
Here CEOs — of large, public corporations anyway — have a leg up. They know how to lead and oversee the management of a complex operation.
But knowing the nature of your organization and who it serves is also critical to managing it well. And too often business leaders wrongly assume the government can be run like a business. But the rules, structures and objectives are different.
Having financial savvy
More than grassroot politicians, CEOs bring a sophisticated financial savvy to the table.
“They know the corporate structure and how Wall Street works. They also know where money lies and how to shake it loose,” said presidential historian Douglas Brinkley of Rice University.
They also bring more of an accountant’s perspective to dollars-and-cents issues.
But that presents its own challenge. “There’s not just one bottom line in government, there are many,” Naftali said.
For example, he said, all Americans expect certain social goods from their government that everyone benefits from, such as clean water, which can require a long-term investment. A CEO president might be more accustomed to making decisions based on short-term cost savings.
Willing to be held accountable
Transparency from the executive branch is often expected.
So CEOs of public companies may be better suited to the job of president than CEOs who run private companies and family businesses. That’s because they must report to boards, shareholders and regulators frequently, whereas CEOs of privately run firms typically don’t have to answer to others and prefer not to show their hand.
There are no equals to CEOs. So when they make a decision with the board’s approval they don’t usually face opposition.
But a US president represents just one branch of government. So he or she must find ways to compromise or defer to the two other coequal branches of the legislature and the judiciary.
After all, unlike with employees, “you can’t just fire Congress,” Naftali said.
Being willing to learn, listen and be taught
Great CEOs and great presidents know they aren’t expert in everything and are secure enough to hire people who have the expertise they need and are willing to learn from them.
“Good CEOs know when to lead and when to delegate,” West said.
They’re also able to learn on the job and are willing to change their minds when the facts — or their understanding of the facts — change.
No matter how smart one’s advisers, Naftali has never heard of a presidency where everyone on the team agrees.
Making decisions with confidence
So a president needs to make the final call. “You want a prudent decision maker who is self-confident,” he said.
Since CEOs have to do this regularly, they might be well suited to the challenge.
Presidents have to convince citizens of the merits of their decisions, proposals and policies.
That kind of high-level sales job might be a good fit for CEOs who have represented brands and who understand advertising, Brinkley said. The difference: They’ll be branding what the United States of America stands for and explaining to Americans, for example, how the Environmental Protection Agency or Department of Agriculture is using their tax dollars to their benefit.