Barack Obama faced challenges in executing a turnaround strategy for the United States due to setting overly optimistic expectations, focusing initially on multiple priorities instead of just the most important ones like the economy, and making unnecessary enemies through partisan actions. Business leaders can learn from Obama's experience to be realistic with stakeholders, focus first on stabilizing financial and operational issues, and make difficult decisions graciously without creating permanent divides.

1. September 2010
Management Lessons From
Barack Obama
Management Lessons From Barack Obama • Set Expectations – President Obama was
elected in a wave of euphoria and ultra high
It has been a 20 months since our young expectations. The mass media trumpeted this
President, Barack Obama was sworn into office. heavily both during and especially after the
The election in November, 2008 and the election. Obama bolstered this by making several
inauguration in January of 2009 were heady sweeping promises such as “No bill will be voted
times. The themes were hope and change for the on until it is posted on the internet for all to read
future supremely marketed by Obama’s election for 5 days.” The unfortunate result of this was that
team and eagerly accepted by a populace who the populace was convinced of such high
had just gone through a global financial collapse expectations that it became physically impossible
and was growing weary from two lengthy wars. for Obama to meet them.
But 20 months after that historic inaugural that If it took years (or decades) to lead a country (or
same populace is now both disenfranchised with company) into the need for a turnaround it will not
the promised hope and change and polarized take you a few quarters to fix it. Be realistic with
along almost every major issue facing the yourself and your stakeholder’s right from the
country. In addition, the economy continues to start. You will need their understanding and
crawl along the bottom of the recession curve support to be successful. Ever hire a contractor to
with a tenaciously high unemployment rate. What do a 3 day remodeling job and 3 weeks later he is
happened? More importantly, are there lessons to still not done? And he has an updated quote for
be learned here that business leaders would be the “unforeseen” additional costs!
wise to heed? Let’s take a look.
• Initially Focus Only On The Highest Priorities –
Barack Obama took over his role as President It is obvious that Obama felt very strongly about
when the country was in the middle of both an issues like healthcare and financial reform.
economic and in some ways a political crisis. In However, when you are leading a turnaround
business parlance Obama was elected to execute your first priority has to be stabilizing the country
a turnaround strategy for a country (think (or company) financially and operationally to
company) that was facing a crisis of confidence in guarantee its survival. Everything else is a lower
itself and its institutions. Like many turnaround priority. Even if you try and accomplish these in
scenarios he also took over a country that was parallel with lower priority items you dilute focus
bleeding red ink. As is often the case the events and increase the risk of failure. The result has
leading up to this point were the result of years (in been with minimal GDP growth and 9.7%
this case decade’s) of avoidance style leadership unemployment President Obama has received
decisions and the use of unsustainable business little credit for healthcare and finance reform and
models to produce artificially positive results (i.e. lots of criticism for the lingering economic
low interest rates and subprime mortgages). malaise.
So let’s take a closer look at some key areas that If you tell your board that you are progressing well
challenged Barack Obama and see if we can with that hot new product you really believe in and
learn some lessons: file for Chapter 11 six months later how satisfied
are they going to be?
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2. September 2010
Management Lessons From
Barack Obama
• Don’t make Enemies Unnecessarily – The above is not meant to be a partisan criticism
Turnarounds are hard. You very often have to of President Obama. I chose him because the
make very difficult and unpopular decisions President is such a highly visible subject. The
particularly if you are trying to alter the behavior struggles that President Obama wrestles with are
of an ingrained culture. However, you will need the same faced by business leaders across the
support (even begrudging support) from most of country, especially during challenging times like
the key players in your country (or company), this. If President Obama had it to do over again I
especially at the beginning. Nancy Pelosi carrying am sure that he would do many things differently.
that huge gavel down the street to the healthcare He is hopefully learning many lessons and most
reform vote was both childish and unnecessary. of them the hard way which is how they make the
The fact that Barack Obama let her do it most long term impact. If he is open to learning
guaranteed a permanent partisan divide. What then he is on his way to becoming wise which is
were the positive outcomes here? the most valuable leadership trait of all in times of
high stress. Just ask the passengers of US Air
Be firm but gracious as a turnaround leader. This flight 1549.
is not easy for anyone. The most successful
leaders are respected and followed by everyone, At The Rockland Group we provide Action. Not
even those with differing views. Just Advice.
• Never Blame Your Predecessor – We all know Bill Gately - Principal
why you are here. If your predecessor was Tel: (781)-710-4064
successful we would not be standing here E-mail: bill.gately@rockland-group.com
listening to you. Every time you blame your
predecessor for our present predicament you Copyright 2006 - 2010 The Rockland Group, Inc.
erode your power and our confidence in you. All rights reserved. Reproduction without
There are no exceptions to this rule that I know permission prohibited.
of.
• Wisdom vs. Intelligence – President Obama is
obviously a very intelligent man. During good
times intelligence is a highly valuable trait to help
a country (or company) capitalize on its
resources. However, during times of challenge or
stress (or a turnaround) there is another more
critical trait; wisdom. Wisdom is intelligence
acquired by years of actual hands on experience.
Wisdom is what Captain Chesley Sullenberger
used to land US Airways flight 1549 safely in the
Hudson River.
Wisdom is having the knowledge of when to build
a team of advisors with the experience you lack,
and listening to them. This is known as “hiring to
your weakness”, and is utilized by almost all
successful leaders, especially newer ones.
Having wisdom is knowing how to avoid the first
four bullets in this article.