Evelyn Orr is vice president and chief operating officer of the Korn Ferry Institute. Stuart Crandell is senior partner of the firm's Board & CEO Services practice.
Wendell Willkie. Ross Perot. Herman Cain. Carly Fiorina. Mark Cuban. Michael Bloomberg. Now Howard Schultz.
Since the 19th century, presidential races have seen their fair share of C-suite executives hoping to take their corporate acumen to the White House. Some, like Willkie and Perot, have won primaries, while others, like Bloomberg and Cuban, never move past the idea stage.
No matter their status, an unspoken belief threads these attempts together: that you can run the country like a company. After all, if you’re a fearless negotiator in the boardroom, then you should be able to handle what happens in the West Wing. But equating the presidency with corporate leadership is a misguided view—of both politics and business.
Similarities exist between presidents and CEOs, of course. Both need to be strong, visionary leaders who can manage various areas, whether it’s the executive branch or business units. But the differences are stark: presidents, for one, have to create policies that will impact generations, even though their time in office is short. (Think of FDR’s New Deal or President Theodore Roosevelt’s National Parks.) CEOs of publicly held companies, on the other hand, are driven by quarterly results; they need to think strategically, but often on a three-year time horizon, regardless of the length of their tenure.
Moreover, while accountable to a board, CEOs make the final decisions on running the company. Presidents, meanwhile, have to build ever-changing coalitions, seek compromises, and find common policy ground with different, often opposing stakeholder groups. CEOs can hire and fire most employees at will, whereas presidents, in many cases, are constitutionally required to have the Senate confirm a nominee.
That’s not all: CEOs can set strategy with their executive team, while presidents must work not only with their cabinet, but also co-equal branches of government and state governments, neither of which report to them and often have their own agendas. CEOs must balance activist investors and activist employees, but presidents have to juggle multiple branches and multiple constituencies, maintaining the balance of power. CEOs have to drive a strategic agenda that’s typically tied closely to shareholder return and stock price, while presidents are beholden to several scorecard metrics—economic growth, balanced budget, citizen well-being, global alliances, and peace-keeping operations.
Then there’s accountability. CEOs are generally selected by a board, not through a public election where you campaign and make promises to different constituencies. In fact, CEOs will often make decisions that go against employees’ interests in order to drive shareholder value (think layoffs, plant closures, mergers and acquisitions). Presidents, on the other hand, have to answer to the people, otherwise their decisions and actions could cost them the next election.
All this may explain why, for the most part, presidents have been governors first—17 in all. It’s the closest thing to governing a sovereign state that qualified candidates can hold. One prominent business leader who won the presidency was Herbert Hoover, who entered office in 1929 as a mining engineer and businessman, with narrow political experience. (He did come with some government background, having headed two agencies under presidents.) But his presidential legacy isn’t ranked highly by scholars, and many historians and economists have charged that Hoover’s greenness led to several of his perceived policy failures. Warren Harding, another businessperson-turned-president, has fared no better.
Indeed, how the similar competencies and personal attributes among presidents and CEOs are developed, expressed, and applied differs greatly. More so, a wide gap exists among the experiences and accountabilities needed to run a country and those needed to oversee a multibillion-dollar global business. Incoming CEOs often have experience with mergers and acquisitions, running a large profit-and-loss report, overseeing transformation, and growing a business. But presidents have to deal with healthcare, immigration, tax policies, economic growth, employment, international trade deals, and geopolitical conflicts.
CEOs would need to have incredible humility and learning agility to make that leap from businessperson to world leader.
Still, an interesting business trend has been emerging that might someday make the corner office a potentially viable training ground for presidents of the future. That trend calls for a new breed of CEOs who must work much more collaboratively than they’ve needed to before to succeed. Now, these CEOs are measured by how well they drive purpose in and outside of their organization, and how well they advance the interests of stakeholders—and society.
We also see trends in business where different governance models are being created. Other C-suite executives may start to report to boards directly, diminishing a CEO’s singular power and control. There may be broader stakeholder representation, where directors on the board represent employees and citizens, not just shareholders. CEOs may become a first among equals on executive leadership teams, requiring a different mindset, style, and approach similar to what’s needed when running a country.
The trend is far from universal, but we’re seeing more companies bring on new CEOs who’ve demonstrated more agility in these and other areas, including their ability to better handle digital, economic, and geopolitical disruptions on a global scale. Sure, it’s too distant on the horizon to suggest that any CEO launch a presidential campaign, but any movement that builds a pipeline of leaders with skills that transfer across business and government is a good one.