Bloomberg News

Romney as Client for Turnaround Applies Lessons Learned in Race

November 02, 2011

(For more on the 2012 presidential campaign, see ELECT.)

Oct. 27 (Bloomberg) -- After losing his 2008 bid for the Republican presidential nomination, Mitt Romney jumped into his next project, conducting the kind of analysis he became famous for as a management consultant at Bain & Co. Only this time the company was Romney Inc.

He sat down with aides at his Massachusetts mansion to deconstruct what went wrong and invited potential donors for a series of consultations at his New Hampshire lake house. And he took away three lessons: Sharpen the message, bank more of other people’s money, and act more like an average guy.

Now, Romney, leading in some polls for the nomination to challenge President Barack Obama in 2012, focuses so much on the economy that he often almost skips over questions about abortion and gay marriage and tries to project an Everyman image.

“He learned to be consistent and disciplined,” said Doug Gross, the Iowa chairman of Romney’s 2008 campaign who is unaffiliated in this election. “Last time, I think he attempted to be all things to all people, and that created an authenticity issue and really hurt him.”

Still, while Romney led all Republican contenders by raising $32.6 million through Sept. 30 and has gained key endorsements, including by New Jersey Governor Chris Christie, he’s been stuck at well below 30 percent support in polls, a signal that he hasn’t won over a large swath of party voters.

Trading in Jeans

Romney, 64, who has become more forceful in candidate debates, has sought to address voter perceptions of him as both inconsistent in his positions and too wooden.

He’s traded in his suits for jeans, touts on Twitter his commercial flights on Southwest Airlines and meals at Carl’s Jr. and Subway, and pared down his staff to a close circle of aides.

The former Massachusetts governor also has run a leaner campaign, spending $2.2 million on staff salaries and benefits - - compared with the $9 million he’d laid out at this time in 2007, data compiled by the Center for Responsive Politics show.

Aides point to Iowa as the clearest evidence of those changes. Romney poured money, staff and resources into the state in the last campaign, spending about $10 million and using dozens of aides. Now, he has five people there and has yet to air a television advertisement.

He’s leading the Republican field among party supporters in the first four contests -- Iowa, New Hampshire, South Carolina and Florida -- with former pizza executive Herman Cain running second, a Time/CNN poll released yesterday showed.

“We’re much smaller, we’re very adroit and agile, which maybe we weren’t the last time around,” said Tom Rath, a senior adviser in both campaigns.

Wooing Donors

Though he’s spending less on staff, Romney is paying more attention to fund-raising. After sinking $35.4 million of his own money into his 2008 campaign, he started wooing supporters long before he announced plans to enter this race.

In 2009, he began inviting groups of donors -- including those leaning toward other candidates -- to his lake house in Wolfeboro, New Hampshire, to spend time with him and his family.

Over brunch, they chatted about Romney’s strategy and policy positions, donors who attended the events say. In the afternoons, Romney took them on his speedboat for tours of Lake Winnipesaukee, often pointing out the more lavish home of the Marriotts, longtime family friends of the Romneys.

Enlisting contributors brings benefits beyond allowing Romney to avoid tapping into his own resources, said Anthony Corrado, a campaign-finance expert at Colby College in Maine.

“By relying on donors rather than his own funds, he gives more supporters a stake in the campaign,” Corrado said.

Struggling to Connect

Romney told donors that he recognized he had come across as arrogant -- he once said if Ronald Reagan were alive, he’d “absolutely” endorse Romney -- during his last run, according to one participant at a meeting.

Donors said Romney also realized voters viewed him as a flip-flopper. This time, he said, he wouldn’t run from his record, including a health-care bill he passed in Massachusetts.

Yet even with all the retooling, there are times Romney struggles to connect with voters.

“I love this country,” he said at the end of one town- hall meeting in Iowa. “I hope I made that clear. I didn’t say that as directly as I would like to. I love America.”

That barely drew a reaction from the audience.

And not everyone is convinced he has changed. The need to overcome skepticism from Tea Party supporters who advocate limited government is Romney’s biggest hurdle to the nomination.

No Mandates

“The one thing that he hasn’t learned since 2008 is that government mandates at any level of government are a problem,” said Max Pappas, a vice president of FreedomWorks, a Tea Party group that objects to Romney’s positions on health care and the 2008 bailout of the financial industry.

The debate about the flat tax has fueled criticism about his consistency. In 1996, Romney took out newspaper ads to oppose a flat tax proposed by Republican presidential contender Steve Forbes. At an Iowa town hall last week, Romney said, “The flat tax has positive features” as long as it doesn’t raise taxes on middle-income Americans.

Romney’s efforts to appear more of a common man suffered a setback in August, when his plans to almost quadruple the size of his $12 million oceanfront mansion in La Jolla, California, leaked to the press.

“I consider him to be a fat cat,” Texas Governor Rick Perry, who’s also seeking the Republican nomination and frequently highlights his rival’s fortune, told CNBC in an interview this week.

Gaffe-Prone Candidate

Romney was called names during the last election, too: His campaign was marked by so many misstatements that the Democratic National Committee derided him as the most gaffe-prone candidate in the Republican field.

At an April 2007 stop in Keene, New Hampshire, he said he’d “been a hunter pretty much all my life.” When reporters questioned that, he later explained he was a “rodent and rabbit hunter” and had been out “more than two times.” Later that month, he spoke of liquefied coal as an energy source -- noting that Hitler had used the technology and it “is still there.”

After losing the nomination, he traveled the country on behalf of candidates during the 2008 race, producing a binder packed with thank you notes during a meeting that November with aides at his Belmont, Massachusetts, mansion.

At that meeting, a consensus emerged on the lessons learned in defeat: Romney, who made his fortune digging into the financial minutiae of companies, had offered too many details on the campaign. He needed a more focused message.

‘No Apology’

While Romney worked to develop his policy positions by writing his book, “No Apology,” in his La Jolla house, aides in Iowa and New Hampshire sought to keep supporters in the fold. His campaign leadership took over his political action committee to manage campaign contributions and allow Romney to donate to candidates across the country.

Matt Rhoades, Romney’s 2008 communications director, took over the PAC, then became campaign manager. Eric Fehrnstrom, the communications director from his time as governor; Beth Myers, his 2008 campaign manager; and Spencer Zwick, who Romney met while working on the 2002 Winter Olympics in Salt Lake City and calls his “sixth son,” have major roles.

Today, friends say the new Romney, a self-assured business leader selling himself as a turnaround expert, is more like the man they’re familiar with.

“This is the Mitt I’ve known for 30 years,” said Bob White, a confidant dubbed by Romney his “career-long wingman” from their days at Boston-based Bain. “I don’t think that all came out last time.”

‘He Wants Numbers’

During those years as a consultant, Romney conducted detailed audits of company clients, collecting financial, management and industry information and then examining it from every angle.

“He wants numbers, he wants analysis, he wants options, and then he makes decisions,” said Howard Anderson, a former venture capitalist who worked with him.

A big part of what Romney learned was that business and politics are different, say current and former aides.

“In 2008, he tried to adopt the model that he had in the private sector where you get all the best minds in a room,” said Gross. “Politics ain’t like that. We had a cacophony of voices and no strategic direction.”

Now, said Greg Mueller, a Republican strategist with ties to Tea Party groups, “There’s a sense that he feels like it’s his time and he’s on his game,” Still, says Mueller, given Romney’s record, he has to be “careful not to depress the energy” of Tea Party activists whose support he needs.

‘Handful of Nails’

In town-hall meetings and economic roundtables, Romney tries to erase the doubts by arguing that he can apply his experience revamping businesses to help the economy.

“I have, in my view, the kinds of skills that America needs right now to get our economy going again,” he told voters in Sioux City, Iowa.

Although he’s released a 59-page economic plan, Romney opened a town hall in Treynor, Iowa, as he does most, with a simpler outline of initiatives he’d take to jump-start growth.

And rather than highlight his Wall Street background, he speaks of his father, George Romney, who started his career as a carpenter and went on to become the head of the former American Motors Corp., governor of Michigan, and a contender for the Republican presidential nomination in 1968.

“My father never graduated from college,” Romney told a Hispanic group recently. “He learned how to put a handful of nails in his mouth and spit them out, point forward.”

‘A Good Shot’

He tends to stick to forums where he’s comfortable, like economic roundtables, and rarely takes questions from reporters. During a trip to Iowa and South Dakota last week, social issues came up only once, in an exchange with a woman over birth control. Romney quickly changed the subject.

The gaffes of 2008 were replaced with a sense of confidence.

“There’s a good shot I might become the next president of the United States, he told business leaders in Treynor. “It’s not a sure thing, but it’s a good shot.”

--Editors: Mark McQuillan, Robin Meszoly

To contact the reporter on this story: Lisa Lerer in Washington at llerer@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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