Donald Trump’s political strategy is to apply basic business methods – and it is working spectacularly. Some people are shocked by his success and this is due to their cognitive dissonance. They cannot accept that Mr Trump, whom they revile, can be so successful. This is exactly the same as the Microsoft detractors’ inability to accept more than 20 years of Microsoft’s market dominance.
The core of Mr Trump’s strategy is his brand. Mr Trump has had two phases of building his brand, which is recognisable by every voter in the United States.
The first phase of Mr Trump’s brand-building was around his business accomplishments, which not only resulted in financial success but also resulted in massive brand-enhancing triumphs such as prominent skyscrapers across the US named after him and several popular business books. Although Mr Trump stumbled in his business and personal life, his ability to recover from these setbacks only enhanced his brand as a resilient winner.
The second main phase of Mr Trump’s brand-building is his entertainment persona. The main vehicle was the hit reality TV show The Apprentice, which he hosted for 14 seasons. To understand how successful this was – at its peak it had more than 20 million viewers weekly – Mr Trump reportedly received US$3 million per episode and he received his own star on Hollywood Boulevard. This amounts to a lot of exposure.
Not as well-known internationally, but critically important in understanding Mr Trump’s current political strategy, is his involvement with World Wrestling Entertainment (WWE). The WWE are experts in understanding a large Republican demographic and Mr Trump made sure that he was well received by them before talking to them politically.
No other contender for the Republican nomination has any-where near the exposure that Mr Trump has on a national scale. How do you compete with 14 seasons of a hit TV show? Mr Trump is instantly recognisable in name as well as in person, and people will prefer that which they know. To truly understand the success of Mr Trump’s rebrand, in 1999 a New York Times/CBS News poll found that 70 per cent of Americans viewed Mr Trump unfavourably.
The next part of the business strategy that Mr Trump is applying to his presidential candidacy is the ruthless exploitation of his competitive advantages.
One example is the asymmetric professional standing and goals of Mr Trump relative to his competitors. By and large the rest of the candidates, Republican and Democrat, are lifetime politicians. For them, not being elected president is a big setback in their professional careers.
The competitive advantage here is that all of Mr Trump’s competitors become risk-averse and in particular they fear Maverick Risk, which is the risk of straying too far from the herd. This allows Mr Trump to take the lead in setting the policy agenda as his perceived risk of failure is far less. In business parlance, Mr Trump is willing to take the necessary risks to innovate. You might not like his innovation, but boy is he innovating.
The highly regarded business book The 7 Habits of Highly Effective People repeatedly reinforces the idea of focussing on your circle of influence, ie concentrating your resources on things that you can affect and ignoring things that you cannot change. Mr Trump does this relentlessly.
An instructive example is what happened when Mr Trump talked about immigration. The backlash that I read in some of the media and heard on television led me to believe that Mr Trump was vehemently against all immigrants. Intrigued, I investigated further and after reading what Mr Trump actually said it was clear that his stated position was far less aggressive than some reports. Whether you agree or reject Mr Trump’s position is not important for this analysis, what is important is his response.
Mr Trump’s response was genius. He ignored the reports. Mr Trump has clearly decided that there are certain segments of American society that he will not reach and is simply refusing to waste time or weaken his message to his core demographic. Business translation – Mr Trump is designing his product for his current and potential clients and is refusing to dilute the product in the hopes of attracting hard-core holdouts. Far too many businesses build products that their clients should want instead of what they do want. If the demand exists and is unfulfilled, take advantage of it.
The conventional view of the left and some of the right is that Mr Trump is a flash in the pan who is simply rabble-rousing. In business it is a dangerous decision to dismiss the success of a competitor as being temporary. Let me offer some alternative interpretations that might be more in line with the intelligence and skill that Mr Trump has shown over his lifetime.
Perhaps his real goal is not the presidency. Perhaps he wants to corner a demographic that is underserved and use that as a bargaining chip to negotiate the vice -presidency or a cabinet post. This happens in business all the time, for example Yahoo bought Maktoob predominantly to acquire the reportedly 16 million Middle East users.
On the other hand, perhaps Mr Trump does not believe in his policies and is only marketing them to become elected as president. Once he is in he might have different plans – not unheard of in the world of politics but also quite well known in the world of business. Microsoft propelled the word “vapourware” into the global consciousness by repeatedly promising products and features that never materialised. Off-plan real estate sales that never materialise are not unheard of either.
The overarching business lesson here is that Mr Trump has shown that conventional business strategy is so robust that it can be applied to politics with spectacular initial success. What is frightening is that the career politicians cannot recognise Mr Trump’s tactics as a cohesive business strategy.
Sabah Al Binali is an active investor and entrepreneurial leader, with a track record of financing, building and growing companies in the Mena region. You can read more of his thoughts at al-binali.com.
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