Tillerson and the businessman-as-politician fallacy

Over the weekend, the Financial Times columnist Simon Kuper and published his weekly essay on the ‘businessman-as-politician fallacy.’ Over 800 words, mostly laid out in bullet points (the preferred format of the modern-day businessman, though not our President), Kuper attempted to clearly lay out the vast differences that exist between managing a business and managing a nation / government. He points to Trump’s experience as the head of a privately owned family business as amongst the “simplest” of executive management positions, in structure, ease of maneuverability (both in terms of the ability to remain nimble in business strategy, and fire/restructure at will), and ultimate aim of “making profits, usually in one sector.” Kuper continues: “Running the government is a little like running a large publicly quoted conglomerate, or the US military. But in fact, the presidency itself is unique, so the candidate’s character and intelligence matter more than his experience.”

This article has stuck with me despite our neverending news cycle transitioning from North Korea’s “entreaty” to Trump’s firing (over Twitter) of his first Secretary of State, Rex Tillerson. Upon selection, Tillerson was thought to be among the few sensible picks within Trump’s cabinet, someone with established relationships in many of the world’s most pivotal theaters (Russia, the Middle East, Africa), as well as strong organizational leadership as Chairman and CEO of Exxon for 10 years.

Unlike the Trump organization, ExxonMobil is one of the largest companies in recent history (#7 largest globally as of 2017, per PWC, but the largest in the aughts, during Tillerson’s tenure as chief executive) with more than $200 billion dollars of annual revenue and ~75,000 employees operating across the globe, and has been publically traded since 1920, just 9 years after being broken up from Rockefeller’s Standard Oil monopoly. In fact, considering both countries and corporations, ExxonMobil would be the 21st largest economy in the world, per the World Bank.

Further, Tillerson is hardly the byproduct of hand selection or nepotism – he rose through the organizational ranks beginning as an engineer (notably, without a MBA), and even more notably does not have any formal or familiar connection to the Rockefeller family. If there ever was a political appointee who could determine the cross-applicability of running a business with running the government, it would be him. The near consensus among Democrats, traditional Republicans, and the financial markets was that Tillerson was a calming and steadying presence to counteract Trump’s chaotic and improvisational style. An “adult in the room.”

Instead, Tillerson’s (shortened) term was puzzling, and mostly without accomplishment or major incident. Tillerson’s most consequential actions as Secretary of State were his handling of the Saudi/Qatari blockade (though this may have led to his ousting), and his characterization of the President as a moron (which almost certainly happened.)

In fact, Tillerson’s management of the State Department seems to have reflected the shortcomings of the corporate management of large firms – a lack of creativity and new ideas, a reliance on outsiders to make decisions, poor coordination and communication, and most consequentially, a starling amount of micromanagement and inefficiency.

At the onset of his term, Tillerson hired a group of management consultants to evaluate the current state of the Department and to help identify areas of excess spend or waste across the 30,000-employee, $50B annual budget Department, spread across 250 posts across the world. Either through the conclusion reached by his mercenary advisors (keeping in mind that his predecessors, Republican or Democrat, were a phone call away), or himself, the “strategy” that he seemed to devise for his stewardship of the State Department was the radical act of “doing nothing” (I can almost see the business book cover now.) For months, undersecretary and other consequential subject matter- and regional positions were left unfilled, and tenured career diplomats were left without direction, leaving many of the most senior (and well paid) diplomats and undersecretaries to resign, oftentimes ahead of anticipated pension or retirement dates, as they felt that they were phased out and therefore serving little-to-no purpose, if not a harmful one, with no discernible diplomatic policy or departmental aim.

While the State Department remained noticeably barren (again, a toxic, of not deliberate, attempt at cost cutting), Tillerson restricted the chain of information to himself and his Chief of Staff, as if they two alone could capably manage our global order in an office over conference calls. Further, Tillerson was quoted as aiming to make the diplomatic portion of the State Department more “efficient” (a particularly classic businessperson doublespeak), with no explanation or coherent aim for how one makes the act of diplomacy more efficient (less plane rides? No international calls?)

The minimalist approach stood in stark contrast to Trump’s maximalist approach — throwing a ton of shit against the wall (little of which stuck), and holding meetings so chaotic that newly installed Chief of Staff John Kelly’s first action in his new role was to restrict access to the President and limit the size of meetings. In both cases, the publicly traded corporate leader and the private tycoon, these business leaders have proved themselves to be wholly inept in the management of their respective organizations and environments. And while a hindsight historian could argue that Tillerson was hamstrung by Trump’s chaotic and oftentimes usurping management of US international relations, it is inarguable that Tillerson managed the State Department for over a year without any discernible strategy or focus, and left the department a less efficient and functional place than he found it (though maybe overall expenses were cut by 5%, at the literal expense of our standing with much of the world.)

Tillerson, more so than Trump, reflects a true argument against the corporate leader as a worthy candidate for public service on the strength of his private sector experience alone. The notion of the business manager as a “generalist,” capable of managing any industry or organization capably, from petroleum to toys (petroleum byproducts), or even the diplomacy of our country, must be thoroughly debunked.

2 thoughts on “Tillerson and the businessman-as-politician fallacy”

  1. EPH: Outstanding article. Typical other pieces concetrate on Trump’s erratic, narcisistic temperment, & Trump’s exclusionary role as an interfering and acting chief of the State Dept. You do not overlook those explanations but instead concentrate on Tillerson’s weaknesses in performing his governmental role. Creative and mind opening. .

    H. Kissenger

    Like

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