Mitt Romney appreciates the value of both
Mitt Romney, according to Mitt Romney, is a “data guy.”
At Bain and Company, his standard MO was, first, get all the data. Gather together all of the relevant pieces of information about a company and its operations, sort it all out, draw a set of (mostly painful) conclusions, and deliver up a PowerPoint slide’s worth of recommendations to the client company’s management.
It didn’t take long for the enterprising consultant to realize that management, for the most part, was incapable of implementing those recommendations. Companies get into trouble for a lot of reasons, but they stay in trouble for only one: deficient and inflexible management.
So the talented and aggressive (and confident) consultant took the obvious next step: He raised enough money to buy companies in trouble and dispatch the derelict executives. He went from being a consultant who suggests to an owner who demands. And the difference, as every free-market conservative knows, between being a highly paid employee and a major-interest owner is the difference between being rich and being Mitt Romney rich.
But it all started — and still starts, according to the Republican nominee — with the data.
So it both was and wasn’t a surprise when the famously data-driven candidate selected a famously data-driven congressman from Wisconsin as his running mate. Not surprising because the gimlet-eyed Paul Ryan is probably exactly the kind of young associate the private-equity kingpin Mitt Romney would have hired, years ago, to gather and crunch data at Bain Capital — and make the company stinking rich.
But surprising because there’s another set of data — like Medicare-popularity figures, Florida electoral votes, and the number of failed attempts to tame entitlement spending — that would argue for a safer and less interesting selection. Nevertheless, Mitt Romney the former consultant ignored — according to all reports — the advice of his own campaign consultants to select a safer, less data-driven running mate and chose Paul Ryan.
But then, Mitt Romney may know something about consultants. Which is that they’re usually wrong.
For instance, in the late 1980s, a huge telephone company hired a top-of-the-line consultancy to make a forecast.
Cell-phone usage was growing quickly, and the phone company needed to know how to plan for this new business-model-transforming technology. So they paid this world-famous consultancy what is known professionally as a “boatload of cash” to answer this question: How many mobile phones will be in use in the United States by the year 2000?
Simple, clear question, right? So the consultants put on their serious faces and fired up the mainframe computers and crunched demographic data and economic data and technological data and rates of “build-out” and “carrier upgrades” and a lot of other terms I don’t understand, and they came up with an answer, which they printed out and attached to their bill.
There will be, they said confidently, in the report that they sent to the phone company along with their (I’m sure huge) invoice, by the year 2000 in America as many as 1 million mobile handsets in use.
So the telephone company began busily planning for a market that in ten years’ time would see 1 million mobile handsets scattered about the continent of North America.
For the record, by the year 2000, there were 109 million handsets in use.
So the enormously expensive, arrogant, pompous, and ridiculously well-dressed consultants were off, a bit. By a factor of more than one hundred.
But it’s easy to blame the consultants and to mock them for their mistake. Consultancies in general are irritating collections of know-it-alls and expense-account spenders. Walk through any airport in the world and you’re confronted with advertisements offering “expertise” and “strategic vision” and “competitive advantages” if you hire this or that consultancy, but the truth is, the only thing anyone — or any business — really wants to know is, what’s going to happen tomorrow?
And nobody knows what’s going to happen tomorrow. Most people don’t even know what’s happening today.
So the first mistake they made was to make a prediction in the first place. But given what they knew in the late 1980s, that prediction made sense. It seemed reasonable. But the future has a habit of coming all at once, and in unpredictable ways.
Nobody likes to hear that, though. We all prefer to believe in the myth of the expert — a high-priced suit who will tell you in soothing tones that his firm has a special way to figure things out, a clever algorithm, a set of proprietary methods designed to predict the future and mitigate the risk of uncertainty. In a large company, it’s nearly impossible to get sacked if you can pin the blame on the expensive consultants — the more expensive, in fact, the better — for a failed strategy based on a faulty prediction. Everyone, in other words, likes to hire an expert. Even if that expert doesn’t know a thing.
For years at Bain and Company, Mitt Romney was that expert. And then later, at Bain Capital, Mitt Romney was a consultant with real skin in the game. And I suspect — with zero evidence, but that’s me: I’m not a data guy and never have been — that one thing Mitt Romney realized during his spectacular rise at both versions of Bain, and while the cascades of money poured in, was: The experts are wrong most of the time, so when you make the big calls, go with your instinct.
In other words, Mitt Romney is a data-driven guy most of the time, but when it really counts, he’s a gambler.
It’s a gamble — and some think a foolish one — to litigate a budget-austerity plan like Paul Ryan’s during a national campaign. It’s a gamble to head into a tough and close race, as a Republican, and risk losing the old person’s vote. It’s a gamble — and an unnecessary one, when you think of safer choices like Rob Portman of Ohio or Bobby Jindal of Louisiana — to double down on a complicated and scary-sounding budget plan with a minefield of detailed specifics. It’s such a giant gamble that you’re sort of forced to ask yourself, Just what kind of Mormon is this Mitt Romney? I thought they were all supposed to be buttoned-up and boring?
Mitt Romney, in a long and successful career as advice-giver, business owner, governor, and candidate, is betting against the data. He’s betting that something will happen — something transformative and large and unexpected — to the American political landscape between now and November. He’s betting, essentially, that despite the data, there will be 100 times the number of mobile phones in use. Mitt Romney is a heretic consultant: He’s ignoring the data.
The most famous and basic logical argument of all time is: If A equals B and B equals C, then by every shred of logic and data analysis in the universe, A must equal C. But what if by the time you get to C, the value of A has changed? What if, despite the utter conviction of the Republican establishment, you can persuade the American voter?
The last politician with this kind of reckless confidence was Ronald Reagan. But then, he didn’t put much stock in “data.” He came from the world of movies and Hollywood, where amazing things happen in the last reel of the picture, where by the time you get to the end, everything has changed for the better.
Mitt Romney is a “data guy” no longer. Let’s hope that Florida isn’t, either.