The answer may not lie in Romney’s record as Massachusetts governor, in his much-discussed years running the private-equity firm Bain Capital or even in his someday-to-be-revealed tax returns. To uncover the authentic Romney, the richest clues may be found in the years he spent at corporate consulting firms straight out of Harvard’s business and lawschools.
This was Romney in his late 20s and early 30s, working for the Boston Consulting Group and Bain & Co., when he became fluent in the language and principles of modern business, a cutthroat world where the only way to thrive is to analyze your business model from every possible angle, keep your operations ruthlessly lean and serve one master above all else: the shareholder.
On the campaign trail, Romney has weathered criticism for some supposed gaffes he’s made — “corporations are people” and “I like being able to fire people who provide services to me” are the most prominent. But these are not simply unfortunate slips of an overtired campaigner; they may reveal the real Romney. Far from backing away from them, he’s dug in. “Corporations are collections of people that are trying to have good jobs for themselves and promote the future,” Romney said while campaigning in New Hampshire, five months after uttering the original quote.
Even his insistence on having the leeway to fire people is not a one-time, isolated statement. In his 2010 book “No Apology,” Romney bemoans unions that make it tougher for employers to lay off workers: “Unfortunately, some union CEOs are less concerned about an industry’s competitiveness than they are with how many of their union’s jobs they can protect.”
The comments have been decried as tone-deaf, but they may reflect Romney’s background in the peculiar world of corporate consulting.
A generation of consultants, beginning in the 1960s, turned business into a science. The Boston Consulting Group created “the growth-share matrix,” which helped corporations divide their business units into “stars,” “cash cows,” “question marks” and “dogs.” Meanwhile, Bain pioneered a rigorous way of comparing a client’s methods with those of its competitors; the firm went so far as to send Freedom of Information Act requests to the government to learn about its clients’ rivals, according to the book “The Lords of Strategy: The Secret Intellectual History of the New Corporate World” by former Fortune magazine managing editor Walter Kiechel.
For these consultants, there was no business problem that couldn’t be solved through empiricism and smarts.
The methods of Bain & Co. led directly to Bain Capital, which Romney helped start with two other Bain partners in 1984. Bain’s leaders thought that instead of being paid fees to fix companies, the firm could make even more money investing in companies, improving them — and then cashing out. Bain Capital’s methods would forever change the private-equity industry. These firms routinely act more like consultants now, developing expertise in certain industries and getting into the guts of a company’s operations.