By PHILIP KOTLER – Donald Trump drew many followers based on believing that the next President should be a business leader, not another run-of-the-mill politician. Business leaders understand the real world, work well with people, know how to manage payroll, are decisive, and get things done.
Now we have enough information about Trump’s past business background and how able he is to put together a team to run the nation’s business. I think that other business leaders who are asked to rate Trump as a great business leader would barely give him a C-.
We learned that Trump faces 3,500 legal actions in federal and state courts. Many have to do with his breaking agreements and not paying builders or suppliers of his hotels. We do hear that many business people are avoiding doing business with the Trump organization altogether.
It is important to understand that Trump doesn’t build hotels so much as put his name on them. Trump has a brand name and hotel investors approach him to pay for and use his brand name. Of course, he doesn’t lend his name unless their proposed hotels will meet good standards. But his essential work is not about building excellent hotels but about being paid for his name. He is in the rent business. His property is his brand name and he makes money by renting his name. This is the essence of unearned income, so-called “rentier” income. With little effort or contribution, he is paid a high income.
In being elected the U.S. President, Donald Trump had an opportunity to show how a business leader manages a new business. First we asked how successful he has been in recruiting the best talent for each job. The normal approach is to look for people who have the expertise and have high respect for running each job. In this case, he would get poor grades. He appointed an Education Secretary who had little idea and no background in our education system. He appointed an Energy Secretary who didn’t even understand what the energy department covered and did. He appointed a State Department head who knew Russia but had little background in how the State Department operated. Most of his cabinet appointments were made on whether the person was a millionaire/billionaire and supported his campaign. This is not the way to build an effective team.
Second, we have to consider how effective his executive orders were in having gone through a thorough discussion phase and a good implementation phase. The fact is that Trump doesn’t read much or listen to intelligence briefings. He relies on what hears on TV and stories of people he respects. There is little evidence that each executive order has been thoroughly analyzed for its possible consequences. Trump simply wants to sign as many executive orders as possible in the shortest time to show that he is a man of action who gets things done.
The results were disastrous. Suddenly many people in a travel situation found that they couldn’t come into the U.S. although they had the right clearance and that a ban was being put up against Muslims. And many Mexicans who had entered the U.S. illegally were suddenly being raided in “sanctuary” cities and deported back to their country of origin whether or not they were gainfully employed or behaved as good citizens. This is reminiscent of Jews in Germany being rounded up and put in cattle cars and sent to interment in so called work camps. Instead of establishing an orderly transition, Trump’s first month was marked by chaos and disorder and resulted in over 60 percent of citizens saying that they would vote for his resignation or impeachment.
Third, we have to consider how Trump treats people in his organization. He checks to make sure that no one has even said something negative about him. Several long time civil servants have been dismissed or “fired” by him. He does not tolerate any dissent. He demands total loyalty. Everyone must suppress their private thoughts and appear to agree with everything he says and does. Yet all business leadership theory says that great leaders are open to learning and hearing other opinions. On this, Donald Trump gets an F.
The voters, in wanting a business person for the first time as President, chose a person who would not follow the norm to reveal his income or follow the norm of setting up a blind trust to run his business. Instead he is running his business by flying every Friday to Palm Beach, Florida and hanging out for a weekend at the nearly 500 members-only Mar-a-Lago Club. Most of the members are real-estate developers, Wall Street financiers, energy executives and other whose business interests can be greatly effected by Trump’s policies. While there, Trump entertains health care executives, foreign heads of states, and others. This is not like former President Nixon’s staying at a private home in Florida or former President Truman’s Key West, Florida home to get away from Washington and breathe in fresh air. Trump is staying at a club surrounded by some of the nation’s wealthiest business executives. There is a danger that he is commercializing his role as President.
We didn’t elect a Jack Welch (General Electric) or a Paul Polman (Unilever) to be our business-type President. Instead, we elected a troubled, angry, lustful, suspicious, highly ignorant man to guide America’s destiny.