The common wisdom goes like this:
1. Fiorina ruined HP and Lucent totally by herself yet made a fortune in CEO pay. Therefore, Fiorina is bad at business. She only makes money for herself, not the stockholders. Also, she eats employees and poops them out.
2. On the other hand, Donald Trump is a successful entrepreneur across several lines of business. Therefore, he is the better business person.
But then you say…
3. “But what about Trump’s four bankruptcies? His partners lost money!”
Then someone with more than ten minutes of business experience says…
4. Trump had a diversified portfolio of holdings. Some were guaranteed to be better than others. So he did the smart thing and created separate entities that could fail individually, just like any stock investor with a diversified portfolio. Plus, banks and investors require that sort of separation as a requirement for funding. There really wasn’t a second way to do it.
But then you say…
5. “I saw a calculation that said Trump would be richer now if all he did was invest the tens-of-millions he got in inheritance in stocks. So he must be bad at business.”
Then I say…
6. Trump’s successful run for the presidency (if he succeeds) will make the Trump brand ten-times more valuable by the time he leaves office. The presidency is an investment for Trump in ways it would not be for anyone else. Becoming President, should it happen, makes the Trump brand valuable in perpetuity whereas otherwise it might have withered after his passing.
After you hear that last point, perhaps you think Trump is a far better business person than Fiorina. All she did was ruin HP and Lucent. At least Trump built some businesses and created jobs, even if several of his ventures could have worked out better.
Now I will convince you that Fiorina is Trump’s equal in business, as far as we can tell.
For starters, both Trump and Fiorina are capitalists operating within the rules of the system. The point of capitalism is to maximize your own gain, not the gain of your customers or your stockholders. We like to happy-talk about how everyone is in it as a team, but capitalism only works if we all know that to be a lie. The system works best when people pursue an enlightened selfishness that understands how things work. Here I am not judging capitalism; I am simply describing it.
So, by the standards of business, and the rules of capitalism, Fiorina elbowed her way to the top of two enormous companies and walked away richer each time. That is an A+ performance under the rules of capitalism.
Was Fiorina’s management bad for shareholders and employees? Maybe. But since we don’t know how another CEO would have performed in each of her situations we are left to imagine it. And then we confuse our biases with reason.
There’s a reason that science demands a control case. Without the control, test results have no meaning. Yet we think we can judge Fiorina’s job performance without a control. If there is no control, it ain’t science. And if it ain’t science, it is just guessing.
I know I haven’t changed your mind about Fiorina’s business skills yet. But I’m not done either. I was saving my best point for last.
I call this move The High Ground Maneuver, and by now my regular readers are alert to this method of persuasion. Watch how powerful it is even though I pointed out my method in advance.
— The High Ground Maneuver —
Every seasoned business person knows that failure teaches you more than success. Trump has had plenty of failures. He knows what they look like, he knows how to manage risk, and he knows how to recover.
Likewise, Fiorina has been in the corporate cage-fights for years. One assumes she picked up some skills because – in case you haven’t noticed – she shook off all of that bad press from HP and Lucent and made herself a legitimate contender to lead the largest economy on the planet.
Is Fiornia bad at business? Maybe. But the scoreboard (her bank account and her surge in the polls) say otherwise. That is the only objective data we have. To say more would involve imagining how things would have gone at HP and Lucent without Fiorina. And your imagination is not evidence.
I say Trump and Fiorina are both super-hardened by failure. Both are at the tops of their games, and both are serious contenders for the presidency. Given the data at hand, if you don’t see Trump and Fiorina as equals in terms of business skills, you might want to have a talk with yourself about gender bias.
If you would like to learn more about how companies can extract value from failure, read The Other F-Word, by John Danner and Mark Coopersmith. They teach at Haas School of Business (Berkeley), where I got my MBA long ago. Now I work with them in the Berkeley start-up ecosystem.
My book takes a similar view on failure, but in the context of the individual.
In Top Tech Blog, whenever I see a story that says science has figured out a way to “mimic a spleen,” I get worried that the rest of my body will become worthless too. The spleen is like the canary in the colon. It always goes first.