David Castagnetti March 10, 2017 Lessons for IROs from the 2016 Election and What to Expect in 2017
Election 2016 2
Results: Big Night for the GOP 306 306 Candidate Popular Vote Percent 46.1% TRUMP 62,979,636 48.2% CLINTON 65,844,610 3.3% JOHNSON 4,488,912 1.1% STEIN 1,457,038 http://uselectionatlas.org/RESULTS/index.html GOVERNORS: R+2 HOUSE: D+7 SENATE: D+2 2016 2017 114 th 115 th 114 th 115 th GOP 31 33 GOP 248 241 GOP 54 52 DEM 18 16 DEM 187 194 DEM / IND 46 48 IND 1 1 3
Americans Wanted Change Change Mattered Most 45% 39% 40% Which Candidate Quality Mattered Most? 35% 30% 25% 21% 20% 20% 15% 15% 10% 5% 0% Bring Change Right Experience Good Judgment Cares TRUMP Dominated Change Voters Can Bring Right Good Cares About Needed Change Experience Judgment People Like Me T+69 C+82 C+40 C+23 4 20 Source: CNN Exit Polls; Net difference shown on bottom.
Message Trumped Organization More Paid Staff More Field Offices More Voters Contacted More Money Raised More TV Ads Run Better Analytics More Debate Prep More Popular Surrogates 5
Trump Coalition Breached “Big Blue Wall” Will It Be the Same Old Battlefield?... WI MI PA IA OH +39 +23 -8 White White Union No College Catholic Households Voters voters (Romney -18) (Romney +25) (Romney +19) 6 Source: Exit Polls (CNN); Pew (Cathoilic)
Ran Against the Media Establishment Great Deal/Fair Amount of Trust in Mass Media by Party 70 70 66 66 65 64 61 59 60 60 59 59 59 58 58 60 56 55 55 53 54 53 53 53 52 52 51 52 49 53 50 49 47 44 46 44 41 41 39 39 41 38 38 40 37 39 38 36 33 31 33 33 30 32 30 32 31 31 27 27 26 20 14 10 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Republicans Independents Democrats 7
The Trump Administration 8
The Unconventional Candidate... ...Will Be an Unconventional President PLATFORMS PARTNERS PEOPLE POLICIES 9
The Disruptions Will Continue By Design: Historically Outside-the-Beltway Cabinet CABINET MEMBERS’ RESUME EXPERIENCE 81% 81% 81% 81% 91% 91% 91% 91% 57% 57% Government Experience 48% 48% 48% 48% 32% 32% 9% 9% 29% 29% Military Experience 5% 5% 14% 14% 18% 18% 0% 0% 24% 24% CEO 19% 19% 24% 24% 9% 9% 23% 23% 0% 0% PhD 10 Source: NPR analysis of Initial Cabinet officials, updated Feb. 16, 2017
White House Still Establishing Its Rhythm Competing Power Centers, Similar to 1993 Clinton WH 11
There is a Game Plan: Doing What He Said He’d Do NATO #lastnightinSweden Fake News Nordstrom’s Inaugural Crowd Size Wiretapping Trump Tower Mar-a-Lago OBAMACARE ABORTION TRADE ENERGY IMMIGRATION SCOTUS Bowling Green Massacre Alternative Facts Worst Deal Ever So-Called Judge Holocaust Remembrance 7
The New Congress 13
Congress Is Very New 72% Rs & 52% Ds Never Served Under a GOP President 70 60 50 House Members by Year of Arrival 40 30 20 10 0 Democrats Republicans 14 Source: Public dataset, Author’s calculations
The Road Ahead: Majority Were Not Here for Key Legislation Now in Play Percentage of Members of the 115 th Congress Who Were Serving When Congress Passed… House Senate 44% 44% 63% 63% (49 as Senators, 14 in the House) 22% 22% 39% 39% 11% 11% 14% 14% NAFT FTA 2.5% 2.5% 6% 6% ‘86 TAX REFORM 15 Source: Author’s calculations
Both Parties Face Challenges Dems… Leaders Too Old? Pelosi Hoyer Clyburn Ryan McCarthy Scalise 76 77 76 47 52 51 AGE as of 1/9/17 GOP… Sufficient Diversity? 100.0% 97.0% 97.8% 96.0% 94.8% 93.9% 97.9% 90.5% 88% 90.0% 93.9% 86.0% 90.2% 86.5% 80.0% 80.7% White Males as a Percentage of Party’s House Caucus, 1950-present 70.0% 60.0% 62.3% 50.0% 52.8% 42% 40.0% 1950 1950 1960 1960 1970 1970 1980 1980 1990 1990 2000 2000 2010 2010 2017 2017 Source: D. Wasserman, Cook Report
Issues Shaping Congress GOP Dem Civil War Averted But… Civil War Begun Over… Deficit Spend or Revenue Neutral? Fight Trump or Make Deals? Business: Ally or Enemy? Globalists vs Populists? US Role in the World? Focus on Poor & Minorities or White Working Class? Repeal and/or Replace Obamacare 17
Lessons for IROs from the 2016 Election 1. Offer a Clear Brand 7. Prepare 2. To Get Coverage, Make News 8. Remember Everything Is On The Record 3. Don’t Fight the Last War 9. It’s Time to Rebuild Trust 4. Secure Core Customers First 10. Build Bipartisan Alliances 5. Broaden Stakeholder Engagement 6. Reassess Political Risk & Strategy 18
The Road Ahead: #1. OFFER A CLEAR BRAND Great Brands Relentlessly Communicate Values Everything Trump Did Reinforced His What Was Clinton’s Brand? Clear Brand: Strong + Change 19
The Road Ahead: #2. TO GET COVERAGE, MAKE NEWS Also Look to Alternative Channels, Direct-to-Consumers Trump Earned Half of all TV Mentions "It may not be good (Sept 1, 2015-Jan 1, 2016) for America, but it's damn good for CBS… The money's rolling in and this is fun.” -- Les Moonves, President of CBS Trump’s Virtual Army APPEARANCES ON SUNDAY TALK SHOWS Twitter 19.2M Facebook 17.3M Instagram 4.6M 20 Sources:: Echelon Insights (TV mentions); Twitter, Facebook & Instagram 1/9/17. Sources: Hollywood Reporter (Moonves); USA Today (Sunday Shows)
The Road Ahead: #3. DON’T FIGHT THE LAST WAR Past Performance is No Guarantee of Future Returns Clinton Re- Ran Obama ‘12 Campaign Trump Innovated to Win 1. Policy: Reject orthodoxy on 1. Identity politics: Micro-target trade to win new voters. specific groups via analytics. 2. Brand: Run against DC elites 2. Attack Ads: Define opponent as including GOP leaders. “unfit” via TV barrage. 3. Medium: Take message 3. Safe States: Assume Big Blue direct-to-voters via huge Wall will hold & try to win red rallies & social media. states (e.g. AZ, GA, NC). 21
The Road Ahead: #4. SECURE “CORE CUSTOMERS” FIRST Don’t Assume Elites Speak for Their “Followers” Union Election Spending Union Household Voting (controlled by Leaders in Washington) (workers voting with their feet) 7% 14% 51% 42% 86% Support for Dem Support for GOP Other / Did Not Say 22 Sources: Center for Responsive Politics (Spending); Exit Poll (Voting)
The Road Ahead: #5. BROADEN STAKEHOLDER ENGAGEMENT You Need a Whole Foods Strategy AND a Cracker Barrel Strategy 80% Dem share of vote in 70% counties with 54 Whole Foods 48 60% 44 41 32 50% 25 20 40% Dem share of vote in counties with 30% Cracker Barrels 20% 1992 1996 2000 2004 2008 2012 2016 Counties with Whole Foods Counties with Cracker Barrel 23 Source: D. Wasserman, Cook Report
The Road Ahead: #6. REASSESS POLITICAL RISK & STRATEGY Challenges Are Accelerated, Viral & Reputational 24
The Road Ahead: #7. PREPARE: THE NEW BULLY PULPIT Accelerate scenario planning, risk assessment & crisis preparation to deal with new political risk. Challenges are accelerated, viral & reputational. Majority of targeted companies failed to respond to BEST PRACTICES negative tweet within the same news cycle 1. Weigh new political risk in business plans & Company Trump Response type Response external communications. Tweet time 2. Practice Q&A re: Trump, tweets & jobs. 11/17/16 Press release; 1 day 3. Take stock of media & Hill relationships – who Tweet will defend us? Have list ready. 11/29/16 Press release; 1 day Tweet 4. Monitor Twitter & news real-time . 5. Know & streamline approval path for replies in 12/2/16 Statement in WSJ 2 weeks article advance. 12/6/16 Press release; <3 hours 6. Let executives immediately know you’re Tweet aware of situation & are responding. 12/22/16 Met with Trump; 1 day 7. Have good facts pre-prepared for response. Tweet 8. Respond in the same news cycle … don’t need 1/3/17 Statement to < 2 hours to correct mistakes & don’t attack POTUS. media; Tweet 9. Share response with executives, employees, 1/5/17 Press release; <1.5 customers & the Hill. Tweet hours 10. Retweet / share positive stories widely. 25
The Road Ahead: #8. REMEMBER EVERYTHING IS ON THE RECORD Privacy Is Dead & Cyber Is a CEO (not CIO) Problem 26
#9. IT’S TIME TO REBUILD TRUST Look to Alternative Partners, “Good Works” & Community Solutions Confidence in Institutions (Percentage of Voters with a “Great Deal “or “A Lot” of Confidence in:) Hardly a Military coincidence Trump Small Business picks generals & Police entrepreneurs Church / Org. Religion Medical System Presidency US Supreme Ct Public Schools Banks Organized Labor Criminal Justice System TV News Newspapers Big Business Congress 0 10 20 30 40 50 60 70 80 27 Source: Gallup, June 2016
The Road Ahead: #10. BUILD BIPARTISAN ALLIANCES Unilateral Accomplishments Rarely Endure Walking Dead Built to Last Medicare Pt. D Senate: 60 Democrats + 0 Republicans 42 Republicans + 12 Democrats 0 lawmakers voted to ratify Passed Senate by Unanimous Consent 1996 Telecom Act FCC: 3 Democrats + 0 Republicans House: 236 Republicans + 178 Democrats 28
#11. PLAY THE LONG GAME 29
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