3-3 America's next CEO?

I will introduce articles I picked up from the Economist every week.

http://www.economist.com/printedition/2012-01-14

Schumpeter

Romney the revolutionary

Mitt Romney’s career says a lot about how American business has changed

Discussion points:

Who is Mitt Romney? Why does he become a candidate of Republicans?

Which do you want to vote Romney or Obama if you are a US citizen?

Mr Obama wants to curb capitalism’s excesses. Mr Romney offers, in his own words, “a clear and unapologetic defence” of “the American ideals of economic freedom”. He even tried to explain the virtues of profits to an Occupy Wall Street heckler. This year’s election will not just be about Mr Obama. Voters will have their say on capitalism, too.

Mitt Romney“How has this happened in the nation that leads the world in innovation and productivity? The answer is that President Obama’s policies have failed. He and virtually all the people around him have never worked in the real economy. They just don’t know how jobs are created in the private sector.”

Summary:

As a businessman, Mr Romney was at the heart of three revolutions.

1. The first was the rise of meritocracy in corporate America. He joined BCG in 1975 and Bain and Company later. These companies valued analytical skills above all else and brought a new type of brain-intensive management to American corporate culture.

2. The second revolution was the idea that a company’s purpose is to make money for shareholders. Post-war American capitalism was dominated by managers, not shareholders. But by the time Mr Romney came of age in the 1970s this comfortable world was crumbling. Corporate America had a principal-agent problem. The solution was to force managers to focus on shareholder value. The result was Bain Capital, a company that Mr Romney ran from 1984 to 1999.

3. The third revolution was the shift from manufacturing to services. Bain Capital “re-engineered” 150 companies during Mitt’s tenure. Mr Romney and his ilk have made corporate America more efficient. But for many people this has involved an upending of the natural order of things, with young men with flip-charts wandering into proud firms and telling veteran managers what to do.