October 7, 2016

Clinton Debate Strategy as a Business Parable

SMITH BRAIN TRUST    What does the first presidential debate have in common with the famed “Rumble in the Jungle” boxing match between Muhammad Ali and George Foreman? They both set a perfect template for a strategic management course, says management and entrepreneurship professor Brent Goldfarb at the University of Maryland’s Robert H. Smith School of Business.

Clinton’s debate tactics echo a lesson he teaches to his students, “that you can win with a good strategy, even if the opponent appears stronger,” says Goldfarb, who is also the academic director for the Smith’s Dingman Center for Entrepreneurship.

“[The lesson] is based on weighing your own capabilities and weaknesses against those of your competitors and developing from this a plan you can act on,” he says.

Before offering Uber and Cisco as examples, Goldfarb lands a boxing analogy: Ali’s winning “rope-a-dope” strategy in his 1974 showdown against Foreman in Kinshasa, in the country then known as Zaire.

​The older Ali needed a strategy to negate Foreman’s advantages of strength and quickness. ​The strategy entailed Ali leaning backward on the ropes, which absorbed the energy of Foreman’s heavy punches. “Ali was able to take a lot of body blows and effectively counter-punch a fast-tiring Foreman,” Goldfarb says. “Foreman entered the match stronger and quicker than Ali, but Ali negated and turned those advantages against him. The result was helped along by Foreman whose only strategy​​ was being younger and stronger.

A similar thing happened to Trump. “His success in the Republican primaries can be identified with his ability to bully opponents and project himself like an alpha male,” Goldfarb says. “But Clinton turned those qualities into a liability for him.”

“Clinton’s advisors knew better than to try to shout down Trump,” he says. So, like Ali baiting Foreman into “punching himself out,” Clinton provoked Trump – calling him “Donald” (instead of Mr. Trump) and baiting him into non-presidential defenses of his business legacy, tax history and feud with former Miss Universe Alicia Machado. She bounced off the ropes, and he had no idea how badly he was losing.

Uber’s Rope-a-Dope

In the business world, Uber’s has demonstrated a deceptively savvy launch and rise that have riled and frustrated the legacy taxi industry and allied politicians. “Instead of preemptively lobbying for regulatory clearance, [Uber] just launched,” Goldfarb says. “It was a well-thought-out bet that consumers would really like their service. And they do. Now, especially in more affluent communities, there are a lot of constituents who’d be very angry if their elected leaders outlawed Uber and like-services.”

Cisco’s own rumble

Networking equipment giant Cisco Systems’ hyper-strategic approach to assimilating the companies it acquires is a key factor to its sustained dominance of an industry proliferated by smaller, inherently nimble startups and “where it’s easy to steal both intellectual property and ideas, and much of the value is embedded in people,”​ Goldfarb says.

“Cisco built an entire system within its business that’s designed to seamlessly absorb the smaller companies they acquire within three months,” he says. “First, they compare its new company’s suppliers its own to determine which ones they can eliminate because they’re redundant and which ones to keep because they meet ‘the Cisco standard.’”

Cisco also employs “buddy system” which pairs existing personnel with counterparts from the acquired firm, Goldfarb says. It also works ensure the acquired companies are sufficiently represented on transitional leadership teams to mitigate an ‘outsiders moving in’ vibe during that process.

For displaced personnel, Cisco prioritizes finding them positions elsewhere in the company. “These collectively are nontrivial policies that have given Cisco a reputation for following through on its acquisition promises,” Goldfarb says.

Clinton vs. Trump II

Ali and Foreman never had a rematch. But Clinton and Trump square off again, 9 p.m. (Eastern) this Sunday in St. Louis.  Will Clinton’s strategy shift? Will Trump demonstrate one? A pitfall for Trump in repeating a nonstrategic debate performance is that it suggests as president “he’d get played by the many world leaders who are smart and very strategic,” Goldfarb says. “In business planning, as well as policy negotiation, winging it – as Trump appears to have done in the first debate – almost never works.”

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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