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Archive for December 7th, 2008

President elect Barack Obama has clearly taken lessons from the CEO 101 handbook as evidenced by his recent interview with Tom Brokaw, which was broadcast this morning on  NBC’s program Meet The Press. As most managers and CEO’s come to learn, it is important to under promise and over deliver. The management of expectations becomes an essential tool in the CEO’s toolbox and is often the key to their perceived success or failure.  This can be difficult for  political leaders to balance as their desire to appease their constituency by promising more and better can be overwhelming.

Obama’s declaration that the economy will get worse before it gets better is an example of this management tenet in practice. With a constituency as varied as the American electorate, it is certainly prudent for the President elect to lower expectations following an election in which promises were made to an electorate eager for quick solutions to cure an economy, which  has been in a recession for the past year.

However, given the global platform that the President Elect commands, it is also essential that he not spoil the economic well further with statements that are politically motivated, to provide a softer landing should the policies he enacts fail to stem the recession and stimulate growth over the year ahead.

Consumers and investors are in a fragile state and as the markets have proven, they are quick to react to statements of the day, from both business and government leaders. An experienced leader recognizes the balance between lowered expectations and lessening motivation. Rather than pontificating about the ills of the economy, we need to hear more from our leaders about the programs that are already enacted and those that are planned to provide further economic stimulus, which will increase consumer confidence and motivate investors to put capital back to work. The President Elects’ comments that the economy will woresen before things get better will provide additional material from the prognosticators of doom and gloom that are abundant across the media.

President Elect Obama had a messianic hold on many of his supporters during his campaign evoking  a soaring rhetoric that inspired and motivated his supporters, while capturing the attention and support of a global media. He has proven to be a prolific fund raiser and a masterful politician. He is capable of moving markets with a few select statements.

A market that is very much in need of a Santa Clause rally would welcome some encouraging remarks from the newly elected Barack Obama.   By continuing to lower expectations for Main Street between now and his ascendancy to the presidency the President Elect may be building a cushion for a softer landing however, he risks prolonging a recession in a nation yearning for a return to economic optimism.

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