XOM Exxon Mobil Corp

By Michael C. Bender 

Former Secretary of State Rex Tillerson and national economic adviser Gary Cohn are just the latest corporate chieftains to stumble in the transition from the autonomous confines of the corner suite to the political pressure cooker in Washington.

It is easy to see why a cabinet post or White House position -- the frequent landing spot in Washington for senior executives -- appeals to those who have spent a career climbing to the top of the corporate ladder.

Top executives, like politicians, must consider a myriad of constituencies -- shareholders, workers, unions, board members, customers -- and the best ones accommodate them all.

But the comparisons can be misleading and the success stories are outstripped by those who have struggled, according to business lobbyists and political strategists.

In just the past week, both Mr. Cohn, the former president of Goldman Sachs Group Inc. , and Mr. Tillerson, who headed Exxon Mobil Corp., ended their service in the White House in part because they disagreed with actions taken by their new boss: President Donald Trump.

Mr. Cohn objected to the White House decision to impose tariffs; Mr. Tillerson differed with the president on the Iran nuclear deal and other matters.

"The truth is they are very different environments," Mike Feldman, a former adviser to then-Vice President Al Gore who now provides corporate consulting, said about the transition from business to politics.

Those who did make a broadly favorable impression, such as former Treasury Secretary Robert Rubin, said they arrived in Washington aware of what they don't know, not what they do know.

After President Bill Clinton invited the co-chairman of Goldman Sachs to join the administration in 1993, Mr. Rubin carried a yellow legal pad, which he still has, around the nation's capital seeking advice from veteran politicians.

"Some people who go from the corporate structure operate on the assumption that they've had success in business and can do the same in government," Mr. Rubin said. "But Washington is just a different world."

One common pitfall is an impulse to rely on what worked in the past.

Former Treasury Secretary Paul O'Neill, who was tapped by President George W. Bush, had focused heavily on workplace safety as chairman and chief executive at Alcoa Corp., the Pittsburgh-based industrial giant.

When he arrived in Washington in 2001, he met Larry Summers, the departing Treasury boss, for breakfast at the J.W. Marriott to discuss the new job, including the issue of workplace safety at Treasury. Mr. O'Neill recalled that Mr. Summers turned to his chief of staff, Sheryl Sandberg, the current chief operating officer of Facebook Inc., and asked if she knew what Mr. O'Neill was talking about.

"Larry Summers was sitting on top of a workforce population of 125,000, and he didn't have a clue about workplace safety -- not a clue," Mr. O'Neill said in an interview.

In the noisy, hot aluminum plants where workers wield vibrating hand tools and can be exposed to ultraviolet radiation, safety is paramount. But at Treasury, Mr. O'Neill's initiative became a running joke as workers teased that their biggest risk was paper cuts, said Charles Duhigg, an author who wrote about Mr. O'Neill in his book, "The Power of Habit."

"At Alcoa, he was lioned for his focus on safety," Mr. Duhigg said. "At Treasury, it didn't really matter."

Mr. O'Neill was forced out of the Bush administration in 2002 after repeated battles with the West Wing over increasing budget deficits. One takeaway from his government service that he still prides: The number of workplace injuries at the agency significantly dropped under his watch.

CEOs must be adept at navigating internal politics. But in Washington, victories are often claimed in the face of what would otherwise look like defeats.

Veterans Affairs Secretary Bob McDonald stepped away as chief executive of Procter & Gamble Co. in 2014 to take over an agency in crisis.

The longtime Republican joined President Barack Obama's administration, with a mission to improve access to the nation's largest health-care system. His progress has been hailed by health-care officials, military advocates and Harvard Business School.

But years later what is still gnawing at him is the legislation that failed because, in his view, Republicans wanted the bill to pass under a different president.

"The biggest frustration is the politics," Mr. McDonald said about his time in office. "It gets in the way of doing what's right for the people. The idea that there is an opposition party? You have people behaving counter to what you're trying to do, even though they know it's going to hurt veterans."

In an act of quiet rebellion, Mr. McDonald said he dropped his party affiliation when he left Washington. Now semiretired in Florida, he is a registered independent.

In the business world, executives have often been groomed for succession, and know their companies extremely well.

"One thing I can tell you, unequivocally, is that there were no surprises with Rex," said William Howell, whose two decades on the Exxon board included the 2006 election of Mr. Tillerson as the company's chairman and chief executive. "Exxon has one of the most intense internal management processes I have every viewed in corporate America," he said.

Being installed atop an established agency like the State Department -- with a budget of $55 billion (about one-fourth of Exxon's) and a range of staff that includes the foreign service, career staff in Washington and dozens of political appointees -- presents a sharp learning curve that must be mastered in a very short amount of time.

For Mr. Tillerson, time ran out on Tuesday when he learned he had been fired by way of a presidential tweet.

"If you want to get anything done, you have to have people around you who know how the levers work," said Mike Leavitt, chief executive of a regional insurance company before becoming governor of Utah in 1993. He later served as Environmental Protection Agency administrator and secretary of Health and Human Services under George W. Bush.

"It was a profound epiphany for me when I realized that if you come into government without understanding how it works -- its limitations and its strengths -- you can be confounded in many different ways," Mr. Leavitt said.

Write to Michael C. Bender at Mike.Bender@wsj.com

(END) Dow Jones Newswires

March 14, 2018 05:44 ET (09:44 GMT)

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