Are we ready for a CEO President?

by Wayne Ferbert on August 31st, 2012

With the back drop of the Republican National Convention, there has been alot of discussion about whether Mitt Romney is ready to be President. I won't debate that point. Instead, let's dialogue on whether CEO is a good preparation to be President.

Yesterday, CNBC had a discussion about this issue. I couldn't believe how clueless the Journalists were on this topic. Most journalists never work in a job in Corporate America - not in the trenches anyway. And these journalists yesterday proved that point. Admittedly, towards the end of the segment, the journalists admit to never even running a "lemonade stand" in their life times!

I usually find Herb Greenberg very entertaining - but yesterday on CNBC he proved how little he knows about what a CEO does. His other journalist counter parts proved this point also. You can watch it here.

The biggest mistake the journalists made (paraphrasing): "CEOs are used to just saying that something should happen and then it happens."

I don't know any company that works that way. If every CEO could snap his fingers to make something happen, then every company would have equal market share and none would stand out. None of them would be differentiating.

Instead, to generate results, CEOs need to rally the troops around a vision and get buy in from rank and file on strategy. And it needs to be the right vision! In addition, CEOs need to be good at executing and planning. CEOs have ideas all the time - but executing them takes experience and hard work. The best CEOs know how to manage the process of seeing the plan thru to execution - and adjusting when it isn't working.

But the pundits yesterday missed the most important CEO trait: judgment. The best CEOs exercise the right judgment when prioritizing the company's work. CEOs have lots of ideas presented to them and they need to decide which ones are the best ones. This is where the best CEOs can really stand out. 

So, lets go the extra mile. Is Mitt Romney ready? As a CEO, did he show good judgment? Well, he certainly grew the Private Equity Fund to astronomical returns while he led Bain Capital. Bain invested $1.91 Billion during the 15 years that Romney was at Bain. These proceeds grew to over $6.75 Billion. Those were some fantastic returns.

This means that Bain invested in the right companies at the right times. That is certainly an example of pretty good judgment.




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2 Comments

Aristotle - August 31st, 2012 at 1:06 PM
Fantastic returns, what is the CAGR on that?
- August 31st, 2012 at 1:22 PM
The CAGR is just over 10%. The $6.75 Billion is actual profit. If you want to see more about the fund returns while he was at Bain, check out this article.
http://www.pehub.com/162896/bain-capital-flourished-under-mitt-romneys-leadership/

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