Watching Donald Trump conduct his news conference Wednesday, it suddenly struck me that, underneath all those now-familiar idiosyncrasies, the president-elect is just like many successful entrepreneurs and owners of family businesses in his management style.
For them, business is personal. They are the sun around which all the stars and planets revolve, the source of all the energy and inspiration, the guiding light and the gravitational force that holds it all together.
They shape the product and the business strategy, cut the deals with suppliers and bankers, and cultivate personal relationships with the customers. They do the hiring and, when necessary, the firing. And although they delegate day-to-day responsibilities to a tight set of family members and loyal lieutenants, they keep a close eye on operations and are not shy about rolling up their sleeves when a problem arises and micromanaging the nitty-gritty details.
Like a lot of entrepreneurial types, Trump is a rule-breaker who takes pride in the fact that his success has come as a result of — not in spite of — his willingness not to be bound by traditional norms or conventional wisdom. His goal is to upset the old order. He has no patience for bureaucracy, legalisms or any external constraints. He is impulsive, eschewing the advice of experts and consultants, relying instead on seat-of-the-pants intuition.
It was this management style that allowed Trump to transform a successful business of building and leasing New York City apartments into a global real estate and entertainment empire. And it was the same approach that Trump used to run a presidential campaign that upended virtually every conventional wisdom about politics and violated every political norm.
With a bare-bones staff, few consultants, little polling or fundraising, a laughably meager field operation, hostile media coverage and virtually no endorsements from interest groups and other politicians, he blew away a field of more experienced and well-funded primary opponents before going on to snatch an electoral college victory from the most experienced, sophisticated and lavishly funded Democratic campaign ever.
The history of American business, of course, contains countless examples of upstart Davids upending corporate Goliaths. But the business landscape is also littered with countless examples of entrepreneurs who have failed to make the transition from initial victory to sustained long-term success. And the reason is simple enough: The character traits and management skills required to create a new company and achieve the initial breakthrough success are not the same as those required to lead a much larger and more complex organization that has to play defense as well as offense.
A few entrepreneurs are able to learn the new skills necessary to make the transition — think of Howard Schultz at Starbucks, Fred Smith at Federal Express or Jeffrey P. Bezos at Amazon (Bezos is also owner of The Washington Post). Others are smart enough to recognize the new imperatives and hand over control to more experienced managers — think of the young Sergei Brin and Larry Page, who handed over the reins at Google to Eric Schmidt. But as often as not, the story ends badly and the company hits a wall or is forced to sell out to a larger, better-managed competitor.
Now that same challenge faces Trump as he makes the transition from entrepreneur and insurgent candidate to leading a public enterprise with 2.6 million civilian and military employees while sharing control with a 535-member board of directors on Capitol Hill and a judiciary whose purpose is to ensure that he follows the rules.
“Running a large, complex organization involves mastering the ability to set the tenor, sustain a culture and create an organizational architecture that makes it possible to organize and channel the activities of large numbers of people in a way that goes far beyond what any leader can do on a personal basis,” said Michael Useem, a professor of management at the University of Pennsylvania’s Wharton School of Business.
Writing in Inc. magazine a few years ago, Steve Tobak, a management consultant and former tech executive, cited three reasons entrepreneurs make terrible chief executives:
1. They get too invested in their own vision. This “fanatical devotion” allows them initially to beat the odds but eventually prevents them from adapting to changing conditions and intensifying competition.
2. They are unwilling to make the hard choices and trade-offs. They are good at creating things but not so good at cutting them back or letting them go.
3. They don’t really like to manage but aren’t willing to give up control to people they hire to do it for them.
Judging from his comments and demeanor at this past week’s news conference, it’s not clear that Trump even acknowledges or accepts that his job is about to change, let alone that he must change with it. He has convinced himself — and the 62 million people who voted for him — that the character traits and skills that brought him to the White House are those that will make it possible to break through the gridlock and change the way business is done in Washington in a way that his predecessors, acting presidential, could not. His is the classic entrepreneur’s conceit.
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