business

The political blogosphere is buzzing about Obama campaign manager David Plouffe’s interview. Soren Dayton argues the lessons of the Obama campaign were “budgeting, technology, field, and media,” while Patrick Ruffini finds that the important lesson is that “Obama ran a better kind of offline campaign.” Although it is quite true that these are some critical lessons, as a business nerd and student at Carnegie Mellon’s Tepper School of Business, I think there’s a massive lesson that pundits are missing: Obama for President wasn’t run like a traditional campaign, but instead like a huge corporation. I don’t believe that any campaign on this level was ever able to accomplish this with nearly the same success as Plouffe and company.

Plouffe makes this unmistakenably clear throughout his interview:

There are business analogies. One is, we’re a startup, we had to go from zero to 60 in a matter of weeks. Our company, if we were successful, would only last two years at the most. … We had over 5,000 employees… And we were an organization about accountability. Down to the entry-level staffer, we measured their job performance based on metrics.

What specific trends that the most successful modern corporations employ were echoed by the Obama campaign?

1. “Know your customer.” I’ve probably heard this from my entrepreneurship advisor a thousand times now, but only because it is perhaps the single most important phrase in business. Obama’s campaign really knew its customers – just look at the way it outreached to young voters.
2. A consistent message and high-impact branding. These two go hand in hand. Take Apple, a highly successful company even despite the recession, for example: they have a simple but highly memorable logo, effective messaging (i.e. “Get a Mac” ads), and a well-designed and innovative website. Barack Obama’s branding and messaging was as good as any corporation.
3. Job performance measurement and personal accountability. Think quarterly or annual reviews at your place of work. As quoted earlier, Plouffe confirms the importance of this in the Obama campaign: “Down to the entry-level staffer, we measured their job performance based on metrics.”
4. Fiscal accountability. Successful corporations have very specific budgets, and virtually all spending is highly scrutinized. Plouffe notes that, “People on the campaign could not make more than a certain amount—$12,000 a month… If you were a deputy you got paid X, if you were an assistant, you got paid Y… From a fiscal management standpoint, Obama was very clear that he did not want to end up with a debt in the primary or the general, so we just planned accordingly. We didn’t spend beyond our means.” (emphasis added)
5. A willingness to take significant financial risks and depart with the norm to be on the cutting-edge. This sentiment was echoed by the Obama campaign at many levels. Team Obama got the idea of peer production, which is quickly becoming the premiere business model of leading corporations like IBM, Boeing, BMW, and Goldcorp. In addition, as Patrick and Soren point out, Obama invested the campaign’s resources in a very unique way – remember the advertisements the campaign ran on an Xbox 360 racing game?
6. A corporate infrastructure. Since when does a political campaign have both a Chief Technology Officer (CTO) and a new media director – let alone a Chief [Anything] Officer?

In business, constant innovation is crucial. Fall behind and your competitors will likely crush you. Find a decisive edge and you stand to profit immensely. Plouffe’s comments and the results of the election demonstrate that business and politics are actually two very similar animals.

Crossposted at NextGenGOP.

This letter was written as a follow-up to some points I raised about idea creation for the GOP in an earlier blog post.

To the future chairman of the Republican National Committee,

We face a tough road over the coming days, months, and years as we work to transform the Republican Party into the party of the future so that we can recover from this year’s devastating losses in the House, Senate, and ultimately, White House. The path ahead will be a challenging one, but I am convinced that we are up to the challenge and that ultimately we will prevail.

In order to do this, however, we must recognize as a party that many of the ways of the past are no longer the way of the future. For example, Barack Obama has proven that new media and the Internet are essential to winning elections. Similarly, we now see that we must be able to raise a large percentage of money and build a powerful infrastructure online.

Following this logic, we also need to realize that peer production is the way of the future – not just in politics or business, but in all walks of life. At a macro level, this means that we must democratize the Republican Party by opening it to mass collaboration. If the Republican Party wants to be the party of the future, it must adopt this sort of collaboration driven, peer production based model.

Indeed, peer production has proven enormously and unequivocally successful as a business model. Corporations are scrambling to replicate the impeccable successes of companies like Goldcorp, Inc., who in 1999 was on the verge of bankruptcy because it was unable to locate sources of gold on its property. Out of desperation, CEO Rob McEwen issued the “Goldcorp Challenge,” inviting anyone and everyone to help the company locate gold on its campus. The success was astounding: due to peer production, Goldcorp went from being an underperforming $100 million company to a $9 billion juggernaut. Many other leading companies, including IBM, Boeing, and Procter & Gamble have adopted peer production as a central component of their business model to similarly resounding success. Although political trends tend to lag behind business trends, peer production is clearly one trend in which we cannot afford to fall behind.

In fact, Barack Obama’s electoral success was not really due to his use of the Internet. Rather, the Internet only served as the medium through which Obama’s volunteers and supporters could peer produce. In the end, it was the Obama campaign’s understanding of the necessity of utilizing peer production and its ability to do so that fueled his victory. MyBarackObama.com was immensely successful in doing this, resulting in his supporters peer producing 200,000 offline events, 400,000 blog posts, 3 million phone calls, and $500 million. Everything at MyBarackObama made it unambiguously clear: “This campaign is about you.”

Democrats, following in the footsteps of countless successful corporations, are going to continue to use this model in 2010 and beyond because it is a proven winner. Accordingly, this begs the question: are we going to do the same? Please, Mr. Chairman, let the answer be an unmistakable, “Yes!”