MBA Guide for the Democratic Party – Part 1

Having lost the recent Presidential election, failed to get a majority in the Senate or the House, and lost 65% of the governorships not to mention multiples of local elections in the United States, the Democratic Party really needs to revive itself in order to get back some modicum of power in this country. If the Democratic Party is a business, how it is responding to these set-backs would likely receive a failing grade in most introductory MBA classes. The best way for the Democratic Party to get on to a winning way is to follow lessons from a business school.

Let’s start with what we teach about leadership. A leader is able to move people and markets in the direction that is profitable for the corporation. The CEO is responsible for the health of a company. If a company keeps losing market share on a continual basis, the CEO and probably senior management should step aside or get fired. The reason for the firing is not necessarily to blame the CEO but to bring new blood, a new sense of purpose and excitement, a new strategy and direction, a new management style, or all of the above to revive the company. In MBA programs we teach students on the expectation of leadership, governance in the corporate world, and board responsibility.

In recent months, several CEOs of well known companies have resigned or were fired by the board because of the decline in either market share, revenue, stock price or all of the above. The most infamous CEO resignation was that of Travis Kalanick of Uber although his resignation was precipitated by several lapses of ethics, sexual harassment in the workplace, management style in addition to having several years of negative profit. The person who could have stayed on but was asked to leave was Mark Fields, the CEO of Ford Motor Company in May 2017 when the board determined that he could not turn around the company after several years of decline in market share and stock prices. Other well known CEO departures in the past two years include Michael Brown of Symantec, a very well known IT compay, Frederica Marchionni of Land’s End, the famous apparel company, and Ron Boire of Barnes and Noble, the iconic bookstore.

Of course, trying to figure out who the CEO-equivalent of the Democratic Party is quite complex. Had Hillary Clinton won, she would have been “crowned” as the titular head of the Democratic Party just as Donald Trump is being referred to as the leader of the Republican Party these days. Being on the losing side of the Presidential election, the Democratic Party leadership seems to be a multi-headed monster: there are leaders in the House, the DNC (Democratic National Committee), the Democratic House Caucus, and of course, the Senate. Leaving aside the Senate for the moment, if the House Democratic Party was a company, my MBA students would say that the recipe for disaster is already enmeshed in this complex governance structure which really has to be reformed.

Nevertheless, in both the eyes of the public and the media, Nancy Pelosi, is the de facto head of the House Democratic Party. After four straight congressional elections in which the Democratic Party has failed to get the majority in the House, it is high time that either she resigns or is “fired”. Her erstwhile deputy Steny Hoyer should also be removed. The Democratic Party needs new excitement and a new strategy, and nothing that anyone has observed since the calamitous day in November suggests that the Pelosi-Hoyer leadership can deliver these. Furthermore, both Pelosi and Hoyer, who are both close to 80, come from very safe states, California and Maryland. Their removal will not jeopardize the electoral map and will certainly bring a more youthful presence for the Democratic Party. In the corporate world, the board would have removed the CEO of a failing corporation. The bankruptcy of the governance structure means that only the Democratic Caucus and the elected members can vote on the removal of Pelosi and Hoyer, both of whom have granted this “board” so many favors that it is unlikely that they would act as would a business. For the good of the Democratic Party and the country, Nancy Pelosi and Steny Hoyer should resign as is the norm in most European countries.

Parenthetically, the Chair of the House Democratic Caucus, Joe Crowley is from Queens, New York and the Vice Chair Linda Sanchez is from East LA, California. The DNC Chair Tom Perez is really from greater Washington DC although he grew up in Buffalo, New York. With the exception of Ralph Ellison who is a Black Muslim from Minnesota, the Democratic Party leadership is not at all geographically diverse. One of the most important lessons in leadership that we teach in a business school is the ability to bring diverse voices and points of view into the decision making process. Where is the voice of the mid-west and the “rust belt”? Where is the voice of the south and Dixie? It is not surprising that leadership that does not embrace and understand the diversity and complex landscape of the United States, has not been able to capture market share or the majority of elected seats in this land.

So the first lesson from an MBA program for the Democratic Party is that it needs to reevaluate the leadership of the party and not keep at the helm those who have presided over its decline in every elected position, at the local level, state level, county and district level, state level, and the presidential level. The second lesson is to infuse this leadership with diversity, not just gender and ethnic but also geographic. The third lesson is to reform the governance structure of the party so that there would be checks and balances on those in leadership positions, and a clear succession plan when leaders do not deliver the goods.

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