The Rise of the Political Manager

The late 1970s and early 1980s have been a political watershed for large firms. On the surface, many companies established political action committees, most upgraded their public affairs programs, and nearly all increased their contribution budgets. Still, a less visible, but equally significant, activity is taking place below the surface: companies are looking for ways to develop the political consciousness of their own managers. Here the goal is not to encourage managers to run for public office or to enter political life as individuals; rather, it is to make them better able to understand and communicate the company’s political position as part of their regular management functions.

Many firms therefore conclude that a politically sensitive management can be just as important to a company’s political welfare as the more explicit programs of the public affairs office and the corporate political action committee. Consequently, these firms are initiating a range of programs in management political development. The reasoning is if large numbers of the firm’s middle and senior managers can be trained to better communicate with public officials, opinion shapers, and the public at large, the company will have a far broader impact on the political arena than if the public affairs staff were left to do it alone.

Certainly not all companies view their managers as an untapped political resource. Some still subscribe to what Irving Shapiro, who was then chief executive of Du Pont, identified as the traditional rules of management conduct: “Stick to business, stay out of trouble, join the right clubs, and don’t talk to reporters.”1 But many companies have changed the rules, thereby stressing outreach over introversion.

What Is Management Political Development?

Management political development means developing and improving a two-way communication flow between government and business. The desired result is to produce politically aware managers who are: (1) better equipped to understand the legislative process and key players in the nation’s and states’ capitals; (2) more cognizant of how public opinion is shaped and how it can affect the firm; (3) more appreciative of the power of environmental, labor, consumer, and other interest groups; and (4) more proficient in getting their company’s views across to public officials, the media, and opposing interest groups.

Although public relations and corporate communications offices have always specialized in political skills, what makes this concept innovative is that these skills are now being transferred to managers outside the specialized staffs. But because the potential political role of the manager differs according to the managerial level he or she has obtained, programs fostering such skill transferals take distinct forms for new, middle, and senior management. For starting managers, a broad college education is emphasized; for middle managers, company training programs are stressed; and for senior managers, continuing informal learning through direct involvement is encouraged.

Rising Managers: A Broad College Education

By training and temperament, most new managers start with little interest in the company’s political environment — nor are they normally expected to help manage it. Instead, a typical manager climbs the early corporate ranks by mastering the internal organization of the firm. Yet, while technical competence facilitates a manager’s advancement in the early years, further career development increasingly comes to depend on a new kind of learning. For the rising manager to assume still broader responsibilities, the external world — the political world — must be mastered as well. This is where a broad college education comes in.

Although it is not necessary to be a liberal arts major, one should be encouraged to take liberal education courses. The writing skills taught in English classes, an understanding of human behavior acquired in psychology, and an appreciation for the electoral process acquired in political science all provide valuable background information for the rising manager as he or she begins to acquire broader responsibilities in the company.

The real value of a broad college education is not seen so much in the first years of a managerial career as it is during the transition into middle management. A long-term study of the careers of managers of American Telephone and Telegraph (AT&T) reveals, for instance, that liberal arts graduates begin no faster than those with career-oriented college degrees; however, they do move faster later on. After twenty years with AT&T, the humanities and social science majors are more than twice as likely than engineering graduates to rise in the company’s middle management ranks.2

A detailed research study of the careers of liberal arts graduates by three psychologists helps explain why. The study reveals that a nonvocational but intellectually demanding liberal arts curriculum makes graduates more able to think critically, better at mastering new situations, and quicker to seek leadership roles. A broad undergraduate education can thus instill just those abilities required to master, first, the internal organization of the firm, and then, later, the external political environment as well.3

General Motors (GM), for example, hires large numbers of scientists, technicians, engineers, and business graduates. But even though it is a technically oriented industrial company, the fact that nearly a quarter of the college graduates in its workforce hold bachelor’s degrees in the liberal arts reinforces GM’s position in stressing a broad educational background for all its employees. “We place a very high priority on a liberal arts background,” observed Roger B. Smith, GM’s chairman and chief executive, “of everyone we hire.” It is done to facilitate GM’s future management development: “For a person to rise to a position of leadership in our organization,” he stated, “he or she has to show us much more than a purely business or industrial orientation. . . . We try to recruit only those who have a wide range of knowledge and interests and who will be capable of handling other responsibilities as well — responsibilities completely unrelated to their specialty.”4

Middle Managers: Company Training Programs

Many large companies believe that in mastering the corporate environment, middle managers should not have to rely entirely on their college background or subsequent self-instruction. Even with the broadest educational experience, managers in the middle ranks can benefit from explicit training in public affairs and the company’s political position. A 1982 report conducted by a committee of The Business Roundtable reflects the thinking at the highest level of corporate management: the report encouraged all firms to consider management development programs for political action. “Assess the ability of your company,” The Round-table urged, “to develop executives who are as adept in dealing with the public policy dimension of business as they are in managing its traditional functions.”5

Corporations are therefore experimenting with a broad range of programs to enhance the political adeptness of their midcareer executives. Although the current diversity reflects a lack of certainty in what programs work best, companies are usually confident that theirs works well. The most common practice is to encourage managers to become active in community affairs. Though such activities are undertaken voluntarily on the manager’s own time, participation in a charity drive, service on the governing board of a hospital, or involvement in a local economic development effort is viewed as being inexpensive and a fast way to learn about public affairs. Nearly three-quarters (72 percent) of large companies report using this practice, according to a Conference Board survey of 176 major corporations in 1979-80. A majority (55 percent) circulate internal newsletters on public affairs, and nearly half (48 percent) run seminars to increase the political sensitivity of their managers. A large number of firms also operates a variety of other programs, ranging from part-time assignments outside the company to full-time rotations through positions inside the firm that involve public affairs responsibilities. Table 1 shows the range and frequency of these practices for management political development among large companies.6

Within the diversity of approaches, however, special public affairs courses — which are conducted both inside and outside the firm — to develop a political awareness among managers are emerging as the premier approach. Although only half of the large corporations used such a program in 1979-80, two-thirds planned to do so in the near future. Moreover, as noted in the figures in the second column of Table 1, more corporations rated this type of program as being especially effective.

Special Public Affairs Programs

Three corporations — the First Interstate Bank of California, Shell Oil Company, and Polaroid Corporation — illustrate the range and purpose of company efforts to develop middle management political awareness through special courses. The First Interstate Bank relies upon a seminar it organizes at the state’s capital, and it uses the course as the first step in building a network of contacts between its managers and local elected officials. Shell Oil runs a seminar near its home office, bringing rising middle managers together with university faculty members for intensive discussions on current affairs. Polaroid makes use of a three-day course on corporate-community relations offered by a university close to its headquarters to prepare newly appointed plant managers for more effective political contact with the local community.7

Banker Contact Program.

First Interstate Bank of California selects 135 of 335 branch managers to enter its “Banker Contact Program.” Participants attend a two-day seminar at the California State Capitol to learn from legislators, lobbyists, and journalists how state politics works. Each of the bank managers is then assigned to work with a member of the California legislature, thus constituting a kind of grass-roots network of lobbyists for the company. “It is necessary that business organizations develop effective contact programs,” observed the bank’s vice-president for governmental affairs, “so that they may properly and effectively influence major public policy decisions. To do so requires an informed group of people who are responsible for contact with legislators.” Thus the managers are kept up to date through regular briefings, and when legislation affecting the banking industry hangs in balance, they know how to act.

Faculty Forum.

Shell Oil Company introduces a select group of its middle managers to the political currents of the era through a “Faculty Forum.” A dozen Shell managers and an equal number of university faculty members are cloistered in a Houston conference center for three days of intense debate and discussion. Among the participants in a recent forum were a manager of Shell’s exploration and production operations (recipient of a bachelor’s degree in petroleum land management), the manager of Shell’s Saudi petroleum business (holder of a B.S. degree in chemical engineering), and professors of economics, political science, and law from the University of North Carolina, the University of Houston, and Yale University. The subjects ranged from how managers can improve the public image of business to the influence of corporations on local politics and whether the U.S. should begin industrial planning.

The manager of Shell’s Deer Park Manufacturing Complex, William Thompson, attended the Faculty Forum in 1974. Reflecting on the experience ten years later, he recalled the rancorous arguments over environmental protection that had dominated his own forum experience. It gave him a deeper appreciation, he said, for the intensity of public feeling about environmental issues, an appreciation he carried into, and certainly needed for, his current position. With some 4,000 employees, his facility is one of the largest petroleum refineries in the U.S., and there is a continuous flow of questions about its environmental policies and impact from the Environmental Protection Agency, employee union, and local community.

Mr. Thompson also reflected on why some of the new engineers hired by Shell eventually come to assume broader responsibilities for the company, while others do not: “A most important element in top management is the capacity to speak with a variety of groups, those who agree with our position and policies and those who would like to see changes — unions, environmental groups, and so on. To communicate effectively, you have to be open and nondefensive, and to listen.” But often, he concluded, “engineers who know the technical side can’t deal with the nonmeasurable elements required for top management. Those who can, make it; the others probably won’t.” Shell’s Faculty Forum is designed to help more engineers appreciate the nonmeasurable elements.

Corporate-Community Relations Course.

Polaroid Corporation uses a still different approach, preferring to send its managers back to college, if only for a few days, to make them more adept at community relations. Polaroid selects managers who have just been appointed to head a plant or office away from its Cambridge, Massachusetts, headquarters. Ten per year are brought to Boston College’s Institute on Corporate-Community Relations. In the 1984 course, Polaroid managers joined managers from such firms as Bank of America, IBM, Texaco, and other companies for an intense schooling in improving company relations with city hall, the local media, and the community at large. Among the faculty of the 1984 Institute were the mayors of several cities, an editor of the Boston Globe, and the director of public affairs for Raytheon Company.

Invitation to enter a company’s political development program is often both a sign of early recognition and a grooming for even greater responsibilities in the future. The Shell and Polaroid programs, for instance, are limited to a relatively select few of the firms’ most promising managers. Afterwards, the skills acquired and the halo of having been selected to attend can make the participants’ future even more promising.

On the final evening of the 1984 Shell Faculty Forum, virtually the entire senior Shell management honored the forum participants by joining them for a formal banquet: nearly half of the senior managers present had themselves been forum participants in their own midcareer years.

Senior Managers: Direct Involvement

As a middle manager moves into a senior management position, he or she is encouraged to move away from formal public affairs programs sponsored by the company toward informal direct political participation. At this level, the tangible experience becomes indispensable.

There are many ways that the public affairs office helps a company’s top managers become effectively involved in public affairs: For example, First Interstate Bank of California provides a short training course on public- and television-speaking techniques; the Gillette Company circulates a digest of contemporary articles among its thirty seniormost managers; and Polaroid’s Public Issue Policy Committee periodically prepares position papers on current affairs for the firm’s officers.

But far more significant is the company’s encouragement of direct management involvement. No such encouragement is ordinarily needed for the very top senior management, as the typical chief executive is already highly committed to and engaged in a range of public affairs activities. A Conference Board survey of nearly 400 chief executives of large companies in 1979-80 revealed, for instance, that more than nine in ten top executives affirmed that they “should personally and actively express [their] views on public policy issues at senior government levels,” and virtually all had done so. Nearly half had even taken time out for part-time service on a public commission or advisory committee.8

For other senior managers, however, there is often an informal company policy of encouraging political affairs involvement. Indeed, half of the large companies surveyed in another Conference Board study in 1981 reported that top management development for external affairs was among their most important priorities. The chief executives of the 432 surveyed companies were asked: “When it comes to the top management group, . . . what are the key challenges you believe your company will face during the next five years?” Developing a “strategic business-planning perspective” ranked first, with 85 percent of the CEOs identifying it as a top priority. But political affairs was close behind: 49 percent specified that “improving top management’s grasp of emerging political, economic, and social issues” was a key challenge, and 52 percent assigned high priority to “building top management effectiveness in dealing with governments and other external forces and groups.”9

For companies that are already developing such understanding and effectiveness of their senior managers, direct involvement is generally viewed as the fastest kind of schooling. Senior managers are thus encouraged to participate in outside political affairs — though not in pursuit of elected public office — such as: (1) service on the board of directors of another large corporation; (2) service in the affairs of major business associations and the governance of nonprofit organizations; and (3) informal and formal advisory work with the highest levels of government.

Outside Directorships.

Senior managers are encouraged to accept outside directorships with other corporations not as a matter of individual preference, but as a company preference for their own development. The main purpose is to increase their understanding of contemporary business practices. The chief executive of a large manufacturing firm offered a characteristic summary judgment: “If you want to bottomline it, it’s one hell of a tool for top management education.”

Directorships are not only an education in how other companies are solving internal management problems akin to their own, but are also a broadening course in the business-political environment. The outside director learns how other firms are responding to federal regulations, investment opportunities abroad, and unfavorable public opinion. “You’re damn right it’s helpful to be on several boards,” said one senior executive who has such experience. “It extends the range of your network and acquaintances, and your experience. You get a more cosmopolitan view — on economic matters, regional differences, and international questions.”

Although there is no formal fostering of outside directorships, some American companies might consider the practice of one British firm that provided its rising senior managers with an explicit training: “I have had the managers that I have wished to see get on some directorships,” said the company’s chairman in an interview, and “I put [them] into a director management development program.” It worked. The program’s visibility soon attracted the interest of several “headhunting” firms specializing in the recruitment of outside directors.10

A common informal practice of American firms is for the chief executive to recommend a promising senior officer to take his or her place when asked to serve on another board of directors. Such referrals are often possible since the top officer usually enjoys a surfeit of invitations. Chief executives typically serve on two to three outside boards — serving on more is generally considered excessive. Yet they often receive many more inquiries about their availability, especially in the period shortly after they take office. By redirecting rather than simply rejecting such invitations, a unique opportunity for senior management development is presented.

The career of a senior vice-president of a leading manufacturing firm illustrates the potential payoffs. The chief executive of the firm persuaded one of New York’s largest commercial banks to invite the vice-president to join its board of directors in place of himself. Most of the other bank board members were themselves CEOs of other firms, but by all accounts the vice-president performed admirably. By his own account, he learned immensely. When the chief executive of the manufacturing firm retired several years later, it was this vice-president who, still young but well seasoned by then, succeeded him.

Business Associations and Nonprofit Organizations.

Most companies also encourage senior executives to actively participate in major business associations and nonprofit organizations, for it is through such participation that senior managers acquire a more refined sense of the problems that industries may face in Washington. Moreover, by being on the governing boards of universities, hospitals, and civic groups, executives gain a greater appreciation for how companies can benefit from their contributions to the community and how the community views its companies.

Consequently, many companies expect senior managers to take leading roles in their industries’ major trade associations and perhaps in other, more issue-oriented associations such as the Council on Foreign Relations or the Committee for Economic Development. They also foster an interest in serving on governing boards of nonprofit organizations.

The underlying motivating force is to establish closer contact between companies and the community. As chairman of General Electric and a leading advocate of greater executive political involvement, Reginald Jones expressed a view shared by many company officers: “Management time spent in community affairs,” he observed, “or in learning what motivates the activists who have such powerful effect on public policy is not time wasted. Unless we understand these powerful social forces and learn to respond to changing public expectations, corporations are going to become an endangered species.”11

Government Advisory Service.

For learning the inner mechanics and general climate of government affairs, there is no better schooling than direct participation at the highest level of government policy making. Serving on a government advisory board or commission can therefore provide an exceptional source of “intelligence” on Washington politics.

Again, even though senior managers may be taken away from their offices for substantial periods to participate in public service activities, they are nonetheless encouraged to accept invitations to serve on such bodies as the Commerce Department’s National Industry Energy Council or the Defense Department’s Defense Industry Advisory Group. It is here and elsewhere in Washington that the senior manager learns what The Business Roundtable notes as the “untidy and often bruising public policy process.”12 Such learning cannot take place through everyday management activities or through executive education.

Promotions Tie In with Public Service Experience

The most politically sensitive corporations often take direct public service experience into account in considering top level appointments. The policies of one major utility company illustrate the significance of this position. When asked if it is important for a senior manager who is under consideration for promotion to have public service experience, a veteran of such service in the company’s top ranks offered this appraisal: “We would not not consider somebody [without such experience], but our belief is that to operate a modern business enterprise, you need some familiarity with the process of government. It is not so much the contacts that he might have made, but rather he can understand what the lobbyist is telling him, he can visualize in his mind’s eye the intricate processes that have to take place [in Washington]. The whole apparatus of government and how it works — it’s of great benefit for the senior manager to understand that.”

At the Eaton Company senior managers’ compensation is based in part on eight areas of individual performance. One of these is “corporate representation,” which is defined to include the quality of the manager’s professional and community involvement and the quality of the manager’s public-speaking appearances. Eaton is not unique: nearly three in ten large companies surveyed in 1979-80 by The Conference Board reported that public affairs responsibilities are included among those in which managerial performance is evaluated.13

Moreover, in its 1979-80 firm survey, The Conference Board asked responding senior executives about the emphasis that their companies expect to place on public affairs competence in making new senior appointments. Table 2 shows that more than half of the companies expect that a great deal of weight will be placed on this. ability. Although only a few companies anticipate a comparable stress on public affairs competence when next appointing their manager of research and development, it is significant that even here nearly half of the companies attach some importance to it. For other general management positions, the weight given to public affairs competence is even greater: for these positions half or more of the companies stress political abilities as a significant factor in selecting one candidate over another.14

Despite these specific company efforts, the public affairs experience of senior managers of many large firms remains uneven. Virtually all chief executives have acquired extensive experience. Some of their immediate subordinates, however, have had little outside involvement, while others have built extensive records. The frequency of involvement in external affairs among a set of 1,355 senior managers of 212 large American firms is displayed in Table 3. The 212 firms are drawn from the Fortune list of the 500 largest manufacturing firms in 1977, and from the accompanying lists of the 50 largest corporations in the fields of commercial banking, insurance, diversified financial ser vices, utilities, retail, and transportation. From each firm, the six to eight highest ranking executives were selected for intensive study, and profiles of their external involvement were built through the combined use of a range of trade, business associations, and government sources. These executives generally carry the titles of president, senior vice-president, executive vice-president, and vice-president for a major functional area.15

One in four of the senior managers is serving on the board of directors of at least two corporations, and about a third of these hold seats on boards of companies among the nation’s 1,300 largest firms. More than two-fifths (44 percent) take active part in at least one trade or business association, and one in ten plays an active role in at least one of four key business associations — The Business Roundtable, Business Council, Committee for Economic Development, and Council on Foreign Relations. A large fraction (45 percent) of the senior managers serves on the boards of trustees of a hospital, university, arts organization, or other nonprofit institution. Smaller fractions serve on advisory panels and committees for local and federal governments; 8 percent are currently serving on a federal advisory committee; and 15 percent have served on at least one major government advisory committee.

Aside from service on other corporate boards, three in five (60 percent) of the senior managers are active in at least one of these areas of public outreach. Among top management, then, direct involvement in the firm’s public affairs is not yet universal, but it has become an activity in which the majority of a company’s senior managers participates.

What Characterizes the Political Manager?

In a detailed study of the daily activity of top managers, Henry Mintzberg found that the typical executive continuously scans the company’s environment to acquire informal information. In addition, he or she receives a wide range of unsolicited information from a broad net of contacts within the firm. Such information is an indispensable complement to the more systematic data generated by management information systems and like sources.16 Much systematic information comes to the executive from the firm’s Washington office and specialized reporting services. Yet often the most meaningful information is acquired from personal circulation in Washington: extended association with a senate committee, a White House staff, or an agency commission yields otherwise unattainable insights into Washington politics, insights that may sometimes have decisive bearing on the executive’s company.

An unintended by-product of this personal involvement by senior managers has been the creation of a seasoned group of political managers. A typical profile of this kind of manager is one that includes service (1) on several corporate boards, (2) as a trustee of two or three nonprofit organizations, (3) in the leadership of a major business association, and (4) as an advisor to a federal agency. “They are willing to step out and accept public responsibility,” observed one long-time participant, “even while they carry out their private responsibility.” Furthermore, in rubbing shoulders with executives from a range of industrial and financial firms, executives acquire a general understanding of the diverse political problems confronting business. Through their associations with administrators of nonprofit organizations and officials of various government agencies, they also gain a better appreciation for the complexities of the political, legislative, community environments in which these businesses operate.

Political managers, as a result, are often more moderate in their political views and are more aware of the need for compromise on legislative issues. At times they may even promote policies deriving not so much from their own firm as from an aggregate corporate thinking developed within such bodies as The Business Roundtable and Business Council. Above all, political managers are activists — and promoters of activism. They believe that companies must become more involved in the political process if the business climate is to become and remain favorable. In general, political managers agree that there is no substitute for direct managerial participation, which will only be effective if company programs and policies are fostered. Thus they have become the driving force behind the concept of management development for political action.

The Changing Attitude of Business

The heightened political engagement of senior managers is the most visible sign of a more pervasive change in the attitude of business. Until the 1970s, many companies’ notion of political outreach took on an episodic tone — reactive strategies were invented as needed. But the 1970s was a period in which concern for the public affairs function moved to the fore. A 1981 survey of 400 major firms reveals that more than half formally established a public affairs office during the 1970s; virtually all had come to maintain a full-time staff by the early 1980s.17

Presently, a majority of large firms are even moving beyond giving only routinized attention to public affairs. Line managers are being stimulated to join in the company’s outreach. Their daily opportunities for contact with the public and political figures are so numerous, and their numbers so large, that firms have come to view their involvement as an indispensable resource for effective political action. Their political development and enlistment is one of the emerging functions of the public affairs office.

Conclusion

The mobilization of managers for corporate political outreach is symptomatic of a broader transformation of many large companies from social reclusion to political activism. Company initiatives in the areas of social responsibility, public affairs, and political action have evolved from ad hoc responses to systematic strategies. Today, these areas of concern are being incorporated into the organizational chart and are becoming a permanent part of corporate programming.

As senior managers become more comfortable in their political roles, they will begin to see the fruits of their labor. A survey of top executives of 600 major corporations in 1982 revealed, for instance, a widespread pride in business political achievements. More than two-thirds of the senior managers agree that “business is much better organized now than [it was] five years ago to deal with politics,” and 90 percent concur that “business is better able now to get its message across in Washington than it was five years ago.” Corporate executives “are purring,” concluded Louis Harris, the survey’s director. “Business is much more self-confident about its power.”18

Management development for political action is thus likely to be further intensified. At the senior level, executive involvement in a range of outside affairs is moving toward a near universal norm. At the middle level, managers are increasingly expected to understand the political culture just as well as the corporate culture. At the starting level, aspiring managers are beginning to feel the pressure to learn the political world in which their company operates. And at all levels, in the words of an early advocate, Frances Steckmest, upward mobility may increasingly depend on executives’ “ability to manage the public policy dimensions of corporate performance as successfully as they and their colleagues manage the traditional aspects of work.” Public affairs performance is already a significant criterion for advancement at the highest levels of the firm, and it is making its way into the reviews of the lower ranks as well. In time, companies will find that managers who display that special combination of talent for both internal and external management will increasingly come to the fore. Driven by political managers, this phenomenon will mark the full rise of managed politics.19