Romney’s Bain Experience Shows He’s A Can-Do Leader

Original Article

Contrary to the advice of some campaign advisers, Mitt Romney should showcase his background and work at Bain Capital.

In telling the Bain story, he can connect with average people and explain how his private-equity experience is really the story of American renewal and helping Main Street businesses achieve success, expand and create jobs.

Voters need to understand the experience and leadership qualities that Romney gained from Bain’s private-equity work in contrast to what they already know about Barack Obama being shaped by his political- and community-organizing experience in Chicago.

Private-equity investment requires patience in contrast to stock-market speculation and high-frequency trading. Private-equity firms like Bain Capital typically hold the businesses they acquire for three to five years or longer.

Most significantly, a hands-on private-equity firm like Bain requires talented people who possess a wide variety of management and relational skills.

Often acting like coaches, private-equity managers can be turnaround specialists. But more often they are just plain good at improving the performance and the value of each business in which they invest.

Of course not every investment works out, and some companies in Bain’s private-equity portfolio failed. Such has always been the nature of a dynamic market economy — what economist Joseph Schumpeter called the natural process of “creative destruction.”

But the Obama attacks on Romney that have highlighted Bain’s failed companies while overlooking the 80% that were successful — such as Sports Authority, Steel Dynamics, Staples and Bright Horizons — miss the point.

What is important about Romney’s private-equity leadership experience is that he has a proven record of working with people of diverse viewpoints.

Working with more than 100 companies in different industries, he knows how to get along with a wide variety of people.

His leadership style has always been pragmatic, not ideological, with an ability to bring disparate people together to build a consensus on moving forward in a new direction.

In contrast, what we know now about Barack Obama’s leadership is that it’s not one of bipartisanship. Even after the Republican landslide in the 2010 election, he couldn’t pivot to find common ground with majority views expressed by Americans, but rather became more divisive and partisan.

But this was consistent with Obama’s past as a community organizer and politician of the Chicago school.

Unlike Romney, Obama has not had to bridge gaps with people of different beliefs. Even if he appears culturally cool, Obama’s temperament and style of leadership is that of community organizer with a megaphone.

At Bain, Romney’s teams generally started the consulting process by revamping companies’ management to optimize overhead, procurement and working capital.

Typically, the next stage would focus on improving the product mix and the supply chain. Bain’s last areas of attention for each portfolio company were to improve sales and marketing and optimize research and development.

Romney is unique among presidential candidates in his hands-on understanding of so many of the skills the country so desperately needs right now.

He has a background that can get the private sector back on a growth track, rationalize and reduce the costs of government operations, develop the country’s energy portfolio, revamp health care and bank reform, improve exports and redress the nation’s current account deficit.

The one phrase to describe Romney’s experience at Bain Capital that comes to mind is “turnaround.” We don’t need another four years of speeches from a community organizer.

The United States needs a committed and qualified turn-around leader whose actions speak louder than his words.

Scott S. Powell

Senior Fellow, Center on Wealth and Poverty
Scott Powell has enjoyed a career split between theory and practice with over 25 years of experience as an entrepreneur and rainmaker in several industries. He joins the Discovery Institute after having been a fellow at Stanford’s Hoover Institution for six years and serving as a managing partner at a consulting firm, RemingtonRand. His research and writing has resulted in over 250 published articles on economics, business and regulation. Scott Powell graduated from the University of Chicago with honors (B.A. and M.A.) and received his Ph.D. in political and economic theory from Boston University in 1987, writing his dissertation on the determinants of entrepreneurial activity and economic growth.