The story of how the presidential candidate, despite his decades-old expertise in business consulting and economic analysis, failed the election of 2012 against Barack Obama.
Hint: looking back at your past success was not always a guarantee you could win support among your voters.
Read the full article on Bloomberg Businessweek, originally published in November 2012.
By the time Romney left Harvard in 1975, a wave of entrepreneurialism was changing how businesses were run. Large but poorly performing companies, undervalued by a nervous market, saddled with expansive bureaucracies and expensive labor issues, struggled to compete, and became easy targets for mergers and consolidations. Panicked executives turned to firms like BCG for answers, and Wall Street opened up to new kinds of people.
“It was a time of great foment and thinking about strategy,” says William Sahlman, a classmate of Romney’s and now a Harvard Business School professor. “American business hadn’t really had to compete for a long period of time. That whole period was the origin of the shift in the economy toward knowledge workers and gave rise to a meritocracy where anybody who was really smart could get a job and do well.”
Romney had plenty of connections to the old pedigreed world. But his acumen, more than anything else, brought him success in the new one. Working with CEOs, strategic consultants guided businesses through corporate successions and transitions, focusing them on doing a few core things well. If a company was underperforming, a good consultant could figure out why and advise on which divisions to shed. If a new product was under consideration, he—and it was then almost entirely men—could study the market and the competition to determine how, when, and where to launch it.
To an almost unimaginable degree, given their age and experience, consultants still in their twenties and thirties reset the course of major American businesses (including Chrysler), helping many CEOs twice their age survive by forcing them to confront the realities of a new marketplace. A colleague of Romney’s from this period, seeking to convey the challenge consultants faced, says that Chrysler executives firmly believed people would continue to buy Chryslers because they had always bought Chryslers. Consultants found that this was a common tendency among executives: the belief that past success was a strategy for the future. Romney shone as someone possessed of both the analytical ability to find the right answer and a presence that inspired trust in more experienced executives.