Is President Trump Doing Management Wrong?
Is President Trump Doing Management Wrong?
January 31, 2017
I made the mistake of turning on CNN yesterday and saw all the hypnotized pundits trying to work the secret persuasion word “chaos” into every comment about President Trump. That’s your tell that none of the pundits are offering independent opinions. They are part of the hive mind led by some uncredited persuader on their side. Someone told them to say “chaos” a lot, and so they do. This might signal the return of Godzilla. Reminds me of “dark,” their hive-mind word for the summer of 2016.
It appears that Trump’s counter-persuasion for “chaos” involves framing his administration as “disruptive.” That’s a good persuasion move because it doesn’t deny the observations. A disruption looks a lot like chaos from the outside. Two movies on one screen.
The interesting question to me is this: How do we know whether President Trump is doing a good job or a bad one? What standard do we use for comparison? If you are not comparing Trump’s performance to some objective standard, you’re not saying anything at all.
Does it make sense to compare President Trump’s performance to an imaginary president who didn’t get elected? I don’t think science recognizes your imagination as the base case for an experiment. It just feels like it should be. That’s an illusion.
Does it make sense to compare President Trump’s performance to past presidents who got a lot done in the first week? Well, maybe, if such a person existed. No one has ever tried moving at Trump’s speed before. We expect the slow-moving traditional leader to create less “chaos” than the entrepreneurial and disruptive leader. But don’t you have to include the benefits in this comparison? The whole point of Trump’s flurry of activity is that he’s trying to create good outcomes. We don’t know if the good outcomes will pan out. All we know is that it was a bit messy at the start.
Is being a bit messy a sign of a problem?
Not if you’re the entrepreneurial, disruptive, candidate of change who just got elected.
Let me explain another management concept that the pundits don’t understand because, generally speaking, they don’t have the right kind of education or experience to analyze a business process.
There are two basic styles of management. One is the cautious style of Fortune 500 companies. The other is the rapid-iteration and A/B testing style of entrepreneurs. Trump is bringing the latter style to the office. The markers for this style of management include:
1. Rapid and decisive hiring and firing.
2. Bias toward action.
3. Rapid A/B testing. Release the early beta version and judge reactions. Adjust accordingly.
4. Emphasis on the psychology of success. Entrepreneurial management includes lots of persuasion and bullshit because entrepreneurs have to fake it until they make it. In other words, they have to create demand via persuasion.
Compare that management style to a large company style. Big companies move slowly in both hiring and firing. They get caught in “analysis paralysis” because no one wants to be seen as making a mistake. And they don’t do rapid testing and iteration with consumers. They try to get it right before any customers see the product.
The world is watching Trump trade some “chaos” to get the benefits of entrepreneurial management. It’s fast and messy, but he’s testing in real time. He’s watching protests. He’s watching news coverage. He’s watching social media. And he’s rapidly adjusting as needed. The net effect of Trump’s bias for action in his first week is that he created a presidential brand of being the most action-oriented president of all time. Your first impression will be sticky. If things work out for Trump, you will forget any temporary “chaos” and remember him as the most effective president in history. Success fixes everything. Every entrepreneur knows that.
The smartest person I know told me that the secret to business success does NOT necessarily involve hiring the right people. We just think it does. The real secret to success is firing the people that you discover to be the wrong fit until eventually you END UP with the right people. No one is psychic enough to do hiring right every time. Job applicants are good at misrepresenting themselves. But a good leader knows which employees to fire and does it quickly and humanely.
Trump fires well. We saw him fire campaign managers as needed to restaff for each phase of his campaign. Lewandowski was perfect for the scrappy first months. Manafort was the right campaign manager to get Trump through the nomination process. And Conway was the right pick as his closer.
I’m not suggesting that everything Trump does is the right move. Quite the opposite. I’m suggesting that he has chosen an entrepreneurial management style that is guaranteed to create more small-scale unforced errors than you might see from a boring Fortune 500 management style. If Trump quickly fixes his unforced errors, you’re seeing a style done right, not wrong.
If you see a pundit crying “chaos” about Trump’s early moves, you’re probably seeing someone with no entrepreneurial management experience. In the startup world, speed has replaced intelligence whenever you can rapidly test*. Doing things quickly, and adjusting as needed, often gets you to a faster/better result than planning a moonshot that has exactly one path to success.
Obviously you want to match the management style to the situation. The messy entrepreneurial style might work great for fixing “systems” in the government, such as healthcare and immigration. It should work against ISIS too. And I expect it will be great for negotiating with other countries because they don’t know what to expect.
But sometimes you need to get it right the first time because the stakes are high. Those situations will be obvious to any president. I wouldn’t worry about President Trump launching some nukes just to see how it turns out.
A good way to tell whether a pundit or citizen understands the field of risk management well enough to critique Trump’s performance is to ask how they view his history of bankruptcies. If a person thinks those bankruptcies are a sign of poor management, they probably don’t know much about business. But if they understand the few bankruptcies – out of hundreds of projects – as part of a diversification strategy with good risk management that siloed off the losers, you might be seeing someone who understands business.
*The smartest person I know told me that too.
Co-founder of WhenHub