Obama Tells BW He's Not Antibusiness

In a wide-ranging interview, the President says "to return to some semblance of balance is hardly radical"

In a July 27 interview in the Oval Office, President Barack Obama reflected on his first six months in office and discussed his evolving relationship with business leaders.

The President clearly had a lot he wanted to say to the business community, with which he has gotten off to a somewhat shaky start. He addressed the criticisms of some CEOs that his policies are antibusiness, defended his proposed tax increases on the wealthy, and drew management lessons from his executive experience thus far.

During the wide-ranging conversation with Editor-in-Chief Stephen J. Adler and Washington Bureau Chief Jane Sasseen, the President was cautious at times but always precise. He looked ahead to growth in a deleveraged economy driven by a more productive health-care system, energy innovation, educational improvements, and a more effective government. He added that many Americans are as cynical about business as business leaders are about government and that his goal is to channel this wave of populism in a constructive direction. (This is an extended transcript of the entire interview.)

BusinessWeek: We write a lot about management and leadership. Since you have the premier leadership position in the world, can you tell us what you've learned about management and leadership that you didn't know six months ago, and what you've gotten better at?

President Obama: Well, I think I came in understanding that the magnitude of the issues facing the country required that I put together a team that I could delegate a whole range of different tasks to and would be able to work well together. So I understood that coming in. I think over the last six months I have just relearned that lesson—that my most important job is to get the right people in the right place, give them the freedom to innovate and to think creatively about problems, hold them accountable for results, and make sure that they are cooperating with each other and communicating with each other on an ongoing basis. And on that front I think we've been pretty successful. You know, you haven't seen a lot of controversy, infighting, turnover.

I've always insisted on making sure we are equipping ourselves with the best evidence, the best data, the best information, that it's real-time, and that we don't ignore information just because it's not convenient or doesn't conform with what our working hypothesis might have been. We're constantly trying to make sure we're open to changing our minds about issues. The deliberative process that's taken place has allowed us to avoid big mistakes [and] make adjustments when what we were doing wasn't working.

You know, I think that the thing that I maybe understood theoretically but did not, I think, fully comprehend until I'd taken office is the degree to which so many of the issues you're dealing with involve legacy structures that are not easily changed. They're pathways that have already been set up, health care being the most classic example of a whole set of institutions and very complex relationships. So even if you could imagine in the abstract a much better way of doing things than we're doing right now, getting from here to there is extremely difficult.

The second thing I have learned since taking office is the degree to which you're working with probabilities. A lot of the decisions you're making, whether it has to do with Afghanistan or the banking system, involve seeing a set of options, the outcomes of which are never guaranteed, and then making the best possible decision—knowing that there's incomplete information but being willing to make those decisions, even if there's a risk involved.

Can you talk about what business leaders have said to you, how it influenced your decisions, and what you've learned from them that you might not have known when you came in?

For the transition and the first three months of the Administration, we were in crisis mode. A huge amount of the conversation revolved around how vulnerable the financial system is, what's required to stabilize it, and how we make sure that as we stabilize the banking system we're not creating new problems in terms of moral hazard or squelching innovation. There was a certain, very instrumental, solving-the-problem-right-in-front-of-you flavor to the conversations we had. If I called [Berkshire Hathaway (BRKA) CEO] Warren Buffett, it wasn't to stargaze; it was to ask him what he's seeing in the marketplace right now. If I talked to [General Electric (GE) CEO] Jeff Immelt, it was [about] what's needed to jump-start corporate borrowing.

Now that we've been able to step away from the brink of disaster and the challenge becomes how to spur long-term economic growth, I think the nature of the conversations is broader and involves some bigger strategic questions.

I'll try to be specific. The last lunch that I had, I guess we had the CEOs of Xerox (XRX), AT&T (T), Honeywell (HON), and Coke (KO). We talked about the fact that, in the 1980s, when everybody was afraid Japan was going to eat our lunch, a lot of companies did a 180 in terms of quality improvement, efficiency, increasing productivity. There was a change in corporate culture that significantly boosted corporate productivity for a long time and helped create the boom of the '90s. What they pointed out was, there were a couple of sectors that were resistant to that: health care, education, energy, and government.

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