Why so many business leaders fail to win at politics

Former Hewlett-Packard CEO Carly Fiorina speaks at the Iowa Faith & Freedom 15th Annual Spring Kick Off, in Waukee, Iowa, Saturday, April 25, 2015. (AP Photo/Nati Harnik) Former Hewlett-Packard CEO Carly Fiorina speaks at the Iowa Faith & Freedom 15th Annual Spring Kick Off, in Waukee, Iowa, Saturday, April 25, 2015. (AP Photo/Nati Harnik) Photo: Nati Harnik, Associated Press Photo: Nati Harnik, Associated Press Image 1 of / 3 Caption Close Why so many business leaders fail to win at politics 1 / 3 Back to Gallery

Former Hewlett-Packard CEO Carly Fiorina is expected to formally announce her run for the White House on Monday, touting her Silicon Valley experience as proof she would make a great president.

Though candidates with business backgrounds often campaign on their boardroom bona fides, chief executive officers have historically failed to convince voters they have what it takes to be commander in chief.

The worlds of business and politics are just too different, analysts say. And Silicon Valley’s fast-moving, innovative, disruptive mind-set is the exact opposite of how government is wired. Tech execs loath bureaucracy; government is filled with hard-to-fire employees.

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“Your typical valley worker looks at government like it’s AOL 2.0 with four floppy disks and 56K modem,” said Rob Molnar, a top aide to former Republican state insurance commissioner Steve Poizner — one of the few Silicon Valley entrepreneurs to be elected to statewide office. “Look at the federal health care (website) rollout.”

Techies vs. bureaucrat

Though candidates with tech backgrounds may see great inefficiencies in government, promising voters that you’re going to run “government like a business” can be tough, as Molnar found out when former eBay CEO Meg Whitman defeated Poizner in the 2010 race to be California’s Republican nominee before losing to Gov. Jerry Brown in the general election.

“Think about farmers in Iowa. Or New Hampshire,” Molnar said. “The rest of the country looks at Silicon Valley like they look at Hollywood. They think that Silicon Valley is its own world, populated with 1 percenters who think they know everything.”

Some business execs have made the transition from corner office to elected office, but it is rare.

Billionaire Michael Bloomberg was a media mogul before he was New York City’s three-term mayor. Mitt Romney co-founded Bain Capital before serving one term as Massachusetts’ GOP governor. Florida Gov. Rick Scott, a Republican, was the chief executive of health care company Columbia/HCA and Democrat Jon Corzine was the CEO of Goldman Sachs before serving in the U.S. Senate and one term as New Jersey’s governor.

A major challenge for executives-turned-candidates is explaining the cold calculus of their business decisions without sounding heartless on the campaign trail.

Democratic Sen. Barbara Boxer pointed to Fiorina’s record of laying off 30,000 people at HP as a way to paint her as an aloof CEO during their 2010 Senate race in California.

In a statistical dead heat four months before Election Day, Boxer, a three-term incumbent who at one time held a 9-1 fundraising edge, unleashed a barrage of TV commercials defining Fiorina as an out-of-touch CEO who cut jobs and sent them overseas. Other ads derided Fiorina for owning yachts and getting a salary increase while HP employees lost their jobs. They painted her as a 1 percenter who received a $21 million severance package after she was ousted by the HP board.

During the campaign, Fiorina was asked if she would change any of the actions she took — such as laying off workers — at HP. She said she would not because it made good business sense at the time. Boxer crushed her by 10 points on election day.

Similarly, Romney’s business decisions while at Bain Capital were the centerpiece of attacks from both his fellow Republicans and Democrats during his presidential runs in 2008 and 2012.

A 2012 primary ad supporting Texas Gov. Rick Perry slammed Romney as a corporate “vulture” who “made millions buying companies and laying off workers.” An independent group supporting former GOP House Speaker Newt Gingrich backed a 27-minute film called “When Mitt Romney Came to Town,” which examines what happened to four companies acquired by Bain. It focused on the workers who lost their jobs in the aftermath of the takeover.

Job-creation claims

Romney’s backers said he created “over 100,000 jobs” while at Bain, but those claims couldn't be verified by independent fact-checkers, in part because they involved privately held companies.

He was never able to shake how fellow Republican Mike Huckabee described him during their 2008 primary: Romney “looks like the guy who laid you off.”

A history of layoffs can dog candidates from the business world. Because Fiorina fired so many people during her tenure, Molnar said “she can’t say she’s a job creator. That takes that off the table, and that’s what every CEO talks about. She can only use part of her experience at HP — the part where she was a decision maker. She has to be very clever about taking the good things and inoculating herself against the bad.”

It’s also a challenge for Silicon Valley candidates to explain their libertarian sensibilities and general mistrust of government’s ability to solve problems. In many cases that is illustrated by a lack of voting.

A Business Week investigation of 100 top execs in 2000 found “precious few” voted in state and local elections going back to the 1980s. The magazine found that Oracle’s Larry Ellison was registered but didn’t vote during that period. Whitman did not vote in more than half of the federal, state and local elections after she registered in San Mateo County in 2002.

Fiorina voted in roughly 1 in 4 of the national, state and local elections in which she was eligible to cast a ballot since she registered as a Republican in Santa Clara County in 2000.

Candidates from the business world who seek the nation’s highest offices without first holding lower seats — think Whitman and former Godfather’s Pizza CEO Herman Cain — are often criticized for their lack of experience.

Former Gen. Dwight Eisenhower was the last president not to hold elective office before entering the Oval Office.

Fiorina, who has never held office, has tried to spin her lack of experience as an advantage last month while on the campaign trail in Iowa.

“When did we get used to this notion that only professional politicians could run for office?” Fiorina said during a campaign appearance. “When did we decide that a professional political class was all that we could have? The professional political class has let us down in too many ways.”

Kellie McElhaney, a professor of business at UC Berkeley’s Haas School of Business, said “it seems a stretch” to make one’s first job in politics the pinnacle of the profession.

Focus on life outside office

“You would not normally see that sort of leap-frogging in the corporate world,” said McElhaney, an expert at studying female leadership.

“We would never say inexperience is an indicator of success in science. Or in business,” said Sally Baack, a professor of business at San Francisco State University who has studied HP during Fiorina’s tenure. “So why would we include it in politics?”

Instead, analysts say Fiorina could connect with voters by doing something that might seem counterintuitive for a hard-charging business executive: talking about life outside the office.

Fiorina has compelling aspects to her backstory, McElhaney said. Even though she grew up as the daughter of an attorney/college law professor who traveled the world, Fiorina paid her own college tuition. She started corporate life in the secretarial pool and worked her way up.

She overcame breast cancer shortly before her California Senate run. She openly talks about the pain of her daughter, who died at the age of 35, after a long battle with addictions.

“She’s a survivor,” McElhaney said. “She is a survivor both of what she survived at HP and what she survived in her personal life.”