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Trump's epic health-care fail offers 5 iconic lessons for deal-makers
After only 64 days in office, President Donald J. Trump raised the white flag and surrendered on what he promised would be his most important legislative priority: fixing American health care . Trump declared Obamacare would remain the law of the land because he was unable to get his own party to agree on a sweeping reform bill. The political consequences of this stunning debacle may end up being historic — and crippling.
Personally, I was happy to see Trump's health-care reform die (because it would have resulted in 24 million Americans losing insurance), but I still can't believe Trump failed so badly, and so soon. After all, Trump is the quintessential deal maker, who promised he would get big, complex stuff done for a fraction of the cost. So where did our master negotiator go wrong? To find the answer, I consulted "The Art of the Deal," Trump's best-selling book I first read as a high school sophomore in 1987.
Below are some axioms from Trump's book the president needs to start following if he wants to start winning. This advice is relevant for entrepreneurs because it also works pretty well when it comes to business deal-making.
1. "The worst thing you can possibly do in a deal is to seem desperate to make it."
Throughout my 20-plus-year career in starting, building and selling businesses, I have negotiated and closed many deals. Trump is completely correct: You gain the most leverage when the other side knows you have the strength to walk away. As Trump looks ahead to tax reform, he must not ooze desperation like he did with health care. What's his best move? Trump needs to tack to the center. To be "Reaganesque," tax reform must pass with true bipartisan support and not on party lines. This would be real leadership and might finally change the tone in Washington. Trump's tax policies will help small business and the economy, but his strength will come from being able to work across the aisle. If he succeeds, he might even gain enough political capital to resurrect bipartisan health-care reform, which is needed due to skyrocketing costs.
2. "Sometimes it pays to be a little wild."
Going crazy in a smart way can be a great tactic. For instance, we all know that "the customer is always right," but I've been forced in the past to go a little wild and fire multimillion-dollar clients because they demanded pricing that was far below my cost. I suffered short-term pain, but in the long run my company GMM won respect from even larger enterprise clients who saw I was unwilling to lose money just to keep an account. I've also killed M&A deals because the buyer pushed too hard, only to have a new deal materialize that was superior.
What type of unpredictable behavior might help President Trump now? Here's an obvious one: Stop pandering to extremists in Congress. The ultraconservative Freedom Caucus singlehandedly sank needed health-care reform because of their slavish obsession with political ideology. Even though these stubborn neocons helped Trump get elected, he needs to show he's happy to ditch them and work with the left to pass a massive infrastructure bill. This success would put millions of people to work, improve our roads and bridges and not waste trillions of dollars overseas (i.e. on misbegotten wars.)
3. "I'm very good to people who are good to me."
Sometimes in order to be good to someone, you have to deliver a painful truth. In Trump's case, he needs to stop misleading millions of economically challenged supporters by saying globalization is completely to blame for their situation. Capitalism has proved that border taxes create no jobs, and overseas factories never magically relocate if it makes no economic sense. Every day 40 million Americans use GMM's products, and a trade war would be a nightmare for these people because prices would spike at retailers like Wal-Mart and Amazon.
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To be a 21st-century leader, Trump should tell the truth: The biggest killer of American factory jobs has been technological innovation, which can be neither demonized nor stopped. Trump should stun the world and propose a national education and retraining program for workers displaced by automation and productivity increases, because that will unleash the true power of the American economy: reinvention. Over the past 200 years we've gone from a farm economy to smokestacks, high-tech factories and services, and with the right leadership, these advancements will continue at an exponential pace.
4. "Getting press can be helpful in making deals."
Many entrepreneurs (including myself) use press to enhance our company's image because it greatly helps sales and marketing efforts. Trump is a true genius when it comes to using the press to get his way. The mistake Trump made is forgetting that he's president now. He's already won. Thus, even though journalists (most of whom are biased against Trump) will have a field day with his health-care failure, he must rise above it and not take it personally. Instead of attacking the press constantly and promoting conspiracy theories that ruin his credibility, Trump should grow thick skin and get off social media. It's not too late for our president to start acting presidential.
5. "If you don't deliver the goods, people will eventually catch on."
This is true for any leader, because all anyone cares about is results. With Trump's approval rating at historic lows, he better realize his honeymoon period is over with the American people. The guy who is terrified of losing has lost big, and he doesn't have much time to turn the optics around. But I'm not counting Trump out just yet. He just needs to take his own advice, and he might be able to get some big things done that help all Americans.
— By Ravin Gandhi, CEO and founder of GMM Nonstick Coatings. Gandhi is also a VC investor and has invested in technology companies KeyMe, Ampsy, Tred, Lettrs and Hester Biosciences.
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