Three Business Lessons From The Success Of Barack Obama

Americans have seen just how much of a moneymaker the Obama name can be. Leading up to the inauguration, hundreds of merchants lined the streets of Washington DC hawking wares bearing the President’s face. J. Crew jumped all over the Obama name as a marketing tool after Michelle Obama wore one of their dresses on the Tonight Show.

But what if there were dollars to be made in not just the style of the Obama mystique, but also it substance? Can the strategies Obama applied to get himself to the White House be applied beyond politics—say, to business?

Barry Libert and Rick Faulk, chairman and CEO respectively of Mzinga, a Boston-based provider of social software solutions, watched Obama’s rise to the presidency with great interest. How could somebody so relatively inexperienced win so decisively over two heavily established rivals, Hillary Clinton and John McCain? In their new book, Barack, Inc.: Winning Business Lessons of the Obama Campaign, they write about some of the same attitudes and practices that gave Obama his competitive edge can give businesses a competitive advantage in the 21st century.

• Obama embraced social networks. Howard Dean may have run the first campaign to significantly capitalize on the power of the Internet to bring people together, but Barack Obama perfected the method. " As they call it in venture capital, Barack is one of the later-stage companies. He learned not just from Dean, but Myspace, the Facebooks, etc." says Libert.

How did he do it? Obama's campaign had a much more sophisticated understanding of online social networking than any of his competitors, Libert argues. The campaign created my.barackobama.com, its own social networking platform that had 1.5 million members with their own profiles. Also, the Obama campaign understood how to use existing technologies. For example, the campaign's strategy on Twitter actively sought to follow other people and not just send out tweets to a passive audience. Other campaigns focused only on building an audience, instead of interacting with that audience, says Libert. " That's like having a one-way conversation."

The lesson for business, Libert and Faulk argue, is that you give competitors an advantage if you ignore the ways that online social networking tools can connect you with customers and employees. But we're at a time when businesses across the country are cutting back on costs and laying people off. How do they have time to develop a social strategy online?

Libert says that there are simple things even small businesses can do. "If you're a local car dealer, you might build a customer support community so customers can talk to each other about how to solve the same problems they might have," he says, to give one example.  "They might start talking to their friends on Facebook or Myspace and referring them to you."

He also praises Obama for coordinating his many volunteers as "keepers of the faith," who did a great job of spreading his message. Libert says businesses today should try to do the same thing with their employees. An example would be an intraoffice online message board where employees can discuss what they do and don't like about the company. That kind of engagement could make employees feel more empowered about the company and more willing to promote its brand--but only if they feel like their voices are heard.

• Obama kept his cool.  Another difference between Obama and his competitors was his reputation for calm. Obama's relaxed demeanor differentiated himself from John McCain, known for occasional angry outbursts.

Libert says businesses should take the same cool approach when confronting the recession. "Especially in difficult times, people don't like to be riding a rollercoaster with a high-drama leader. They want consistent statements, thoughtfulness, and emotional control."

Part of being cool as a business leader is not making sudden decisions. Libert notices that Obama did not freak out and fire large numbers of staffers when controversies erupted during the campaign, such as the controversy with Reverend Wright. He suggests businesspeople could take the same approach when dealing with problems such as the need to cut costs. Suddenly laying people off may not be a wise approach. " There's survey evidence that employees they would prefer to take cuts for everybody then to have their friends fired," says Libert.