Chapt 11

“Politics, consensus and conflict management in the private sector”

This chapter is about Rubin’s decision to come back to business after being chief at NEC and Secretary of the Treasure. These are the lesson he learned from his experience.

1) lesson # 1: the importance of public speaking: to leave an important place in the government is quite as difficult as to obtain it. People ask why are you leaving the place and it can communicate attritions in the government with consequences in the financial market. You have to communicate confidence and credibility. 2) Lesson #2: once you have been in the government, people continue to look at you as if your political view has yet the power to influence political decision, everything you say acquires a new “political dimension” though you are back to the private sector and have not political power. 3) Lesson #3 Everyone wants you as a consultant and to express your opinion, but it is more difficult to come back to the practical management of the business. Rubin now wants to avoid a well paid position because of his résumé, a well paid position that actually has no role in effective management. “Creating a role in central management was more than a challenge”. P 304

He decided to reach Citigroup a huge public company with 180,000 employees, he is the third member of the office of the chairman, though not a CEO.

Moreover, after his experience in the Government, Rubin realizes that the traditional view according to which the public sector has more to learn from the private sector than the other way is not true, “the traffic seems to me to go in both directions”. In particular he thinks that during his experience as high level civil servant he learned some things that could work well in the private sector, for example:

a) P 311 “the area where I was most keenly aware that the private sector could gain from the experience of government was in managing the decision making processes around complex issues with multiple internal stake holders.” P 312, b) “Another area where corporations clearly have much to learn form Washington is in understanding political considerations, both in dealing directly with governments, domestic and foreign, and in handling business issues that are political by their nature.” P 312-313 c) political experience can also be valuable in the private sector, when companies find themselves involved in issues with a significant political dimension.

Another aspect is that often the results of organizational changes in big firms like Ford, General Electrics etc… take time … Welch had had two decades to gain people confidence. “To remake a corporate culture successfully means not only being willing to incur some opposition but also winning the support of the preponderance of a corporation’s people. You can’t impose change by fiat. So, when Bill Ford became CEO at Ford, Rubin gave him some suggestions about his behaviour. “My advice to Bill was to focus very carefully on crafting his message and on a strategy For getting it across the media. He had to present a constructive view of the future under new leadership and not to focus unduly on problems or on past conflict that might make Ford look like troubled company. I told Bill about my having asked Tom Donilon to help me plan this kind of communications strategy when I had left treasury, and I suggested that he do something similar. It wasnt’ Bill lacked sensitivity to these issues, just that people in corporate life don’t tend to develop that kind of political awareness, despite its relevance to their jobs. As I turned out, Bill handled the transition well both in the media and in the company.” P 319

There is so much politics in business !

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