Lots of Failure

I think that startup CEO’s can learn a lot from the four act drama that just played out in Washington DC.  Learning from failure is an important concept.  In the startup world we are told to embrace failure, or ignore failure.  That works as long as we learn from it and admit our mistakes.

In politics, the problem with admitting you are wrong is that you show vulnerability.  The other side attacks and in this highly polarized time, the attacks are vicious.  People that otherwise are sane are tweeting out statistics they know are skewed just because it fits their argument.  If you are the CEO of a startup, you will find strength from vulnerability.  They call that emotional intelligence.

The Republicans need to exhibit a little EQ if they are going to pick up the pieces.  Unlike the cognoscenti, I think they can resurrect a bill but it’s going to take some humility by the President, the Speaker and his backers, and the Freedom Caucus.  If I were the President, I would put Tom Price on the task immediately.  I’d take it out of the Speaker’s hands.  I’d put something together that will pass and then put it on the Speaker’s desk.  Then I’d go through the process.

If you are a CEO of a larger company, sometimes you have to break out of norms.  You need to empower, and designate a person that can bust through bureaucracy and get things done.

There were several levels of failure starting with Speaker Paul Ryan.  He needed to educate the Freedom Caucus, and the general public on the exact strategy they were going to use to implement repeal and replace.  He didn’t get everyone on board before moving.  They put too much pressure on this whole first 100 days thing.  Professor John Cochrane warned them about that.

Let that be a lesson to startup CEOs that try to do big things.  You can sum it up in 140 characters, but you have to take the time to educate all who are affected about the tactics and strategy to get you there.  People need to be able to talk through their fears, and really understand.  Back in December there were signs the Freedom Caucus was going to be a big problem for Ryan.

In this case because of the media and the Democrats, it was very difficult.  But, the Republicans needed to 100% ignore them.  Ryan needed to give cover to his people by using his brass knuckles to call the opposing side out when they were wrong.  He didn’t.  He was too professorial and focused on procedure.  The rallying cry of “repeal and replace” was hollow.  There wasn’t enough stuff inside it to carry through.  Hating on Obama is tinder for a fire.  It’s not enough to sustain a movement.

As a startup CEO, you can find dry tinder all the time to get things started.  But, you need to appeal to something deeper inside people to sustain a movement.  The people you work with need to feel it in their gut.

Trump failed too.  He sold himself as the grand bargainer.  In business, you can force certain things.  In government, you only have the power of the purse to force things.  Trump needed to be more active in bringing the Freedom Caucus along.  Instead of pivoting, Trump dug in.

As a CEO, you need to check in with people.  You need to ask the right questions to get to the root of what they are thinking about.  You need to uncover things your employees are uncomfortable with and work through them. Trump didn’t do that with the Freedom Caucus because he was pre-occupied with lots of other things.  Additionally, it doesn’t seem like it’s part of his personality.

The Freedom Caucus totally failed.  They wanted something pure.  However, government isn’t pure.  It’s full of compromise.  I thought Dr. Feld’s blogpost about repeal and replace was accurate. Sure, it’s a Democratic law and the Democrats are responsible for the spiraling health care costs that are crushing citizen budgets.  But, the Freedom Caucus gets to be part owner of the problem now.

As a CEO, you’d love to have a pure product to put in front of your customers.  But, sometimes you need to just satisfy them.  It just needs to be good enough to ship.  You will work out the bugs later.  Speed to market is often a lot more important than perfection.

Believe me, I am not a big fan of the GOP establishment.  I am for freedom of choice and a lot of competition.  Often, the GOPe is at odds with delegating freedom to citizens.  Vouchers from government are always better than a one size fits all program.  But, the strategy the Republicans were going to use was the fastest, cleanest strategy within the rules of the government.

The other failure was gerrymandering.  Gerrymandering of states by both political parties has created a lot of extremists in Congress.  My own home state of Illinois is highly gerrymandered.  That allows very extreme politicians to get elected that have minority views.  My Democratic friends are screaming about gerrymandering in places like Texas.  They need to focus on places like Illinois, California and New York where their own party has eliminated political competition.



3 thoughts on “Lots of Failure

  1. .
    Good read.

    In evaluating the Repeal & Replace debacle, let’s first put the blame where it belongs and then let’s look at the process.

    First, this belongs to Speaker Paul Ryan. The Speaker is the leader of the House and this legislation originated in the House. He failed to craft a piece of legislation which would gain the support of his House members.

    The actual legislation he crafted came right out off a shelf and had been written long before there was any discussion. The Freedom Caucus (the conservative element of the House) was not consulted BEFORE the legislation was finalized.

    There should have been an outline, innumerable discussions, bit of give and take, and co-sponsors out the ying yang. This is called “getting everybody’s fingerprints on the murder weapon.”

    On this score, Speaker Ryan failed miserably. Get co-sponsors.

    [Teaching point — look how the Democrat Leader of the Senate, Lyndon Johnson, put the civil rights legislation together getting almost no votes from his Dems and it being passed by Republicans. That was a great process and it worked.]

    Paul Ryan is a light weight and a diluted Republican. This is the guy who agreed to sequester, raised taxes, and then failed to deliver on the expense reductions required under sequester. He is a light weight on the days he eats four pizzas.

    Paul Ryan put forth this legislation with minimal contact with the White House as it was “his” House. When it became clear he didn’t have the votes, he went to the White House, tail between his legs, and asked permission to pull the plug.

    What happened is the power shifted from one end of the mall to the other.

    Now, President Trump can fashion a bill without having to share the power with the Speaker — a powerless fraud on his best day.

    Stay tuned.

    Pres Trump may, in fact, shift to tax reform. If he does, then Obamacare will implode, the streets will be (figuratively) filled with blood, and when he returns to Obamacare, the country will be in an even more desperate condition.

    What nobody has said is that Obamacare is working. Now, it’s going to be the difference between the ICU and the morgue. It will die in 2017.

    One of the most important things any dealmaker can do is to walk away from the wrong deal. Pres Trump gave Speaker Ryan his lead and let him try to fashion a bill. Ryan failed.

    This is a setback, not a failure. If you’re a builder of 100-story high rises, you have dealt with plenty of planning boards, zoning commissions, City Councils. You have to be patient and you have to work to overcome objections to get your plans approved.

    The GOPe failed to perform thereby making Pres Trump (not a conservative, barely a republic, and not establishment) stronger.

    Stay tuned. This is the first half of the first quarter.

    Quick note: Read up on what it means to pass legislation using “budget reconciliation” and understand why Speaker Ryan took this path. It has to do with the Senate. The 2018 election will cure this problem.


    1. There is a bill languishing in committee that Rand Paul wants to move on, but GOPe doesn’t. They ought to move on it and make health care a campaign issue for the Senate in 2018

      1. .
        Healthcare is already an issue in the 2018 elections which started yesterday.

        All but one Senator (2014) who voted for Obamacare was defeated. There are 23 Dem Senators up for re-election and about half of them are in states won by DJT.

        There are those who say that the Dems would be MORE vulnerable if there were no Trumpcare enacted as they would have to defend Obamacare which was a bridge too far in 2014 and 2016.

        It is hard to see how the Republicans don’t hold serve on their 9 seats while gaining at least 10 from the Dems. That gives them a cloture proof majority.

        Rand Paul can be a force for the discussion, but he cannot get the discussion started, which is a shame given that he and his father are both physicians.


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